Energy efficiency, Clean Power Plan would cut consumer costs, reduce use of dirty fuel
By Guest Columnist MARILYN A. BROWN, a professor at Georgia Tech’s School of Public Policy whose research focuses on energy, climate and environmental policy
In a year marked by ever deepening political divides, an unlikely consensus has formed between Georgia regulators and environmental advocates: energy bills must remain affordable as we transition to a low-carbon economy. My research on sustainable energy policies and the electric utility industry demonstrates that we can best achieve this result by using innovative tools already available to us.
One year ago, the U.S. Environmental Protection Agency set the nation’s first-ever limits on carbon pollution from power plants. The Clean Power Plan addresses the largest source of the pollution driving climate change and is the centerpiece of President Obama’s climate action plan, as well as the linchpin of the U.S. commitment to the Paris climate agreement.
The Clean Power Plan will keep Georgia cleaner and safer. Once the Clean Power Plan is in place in 2030, carbon pollution from Georgia’s power sector will be 34 percent below 2005 levels and 32 percent lower nationwide. States have the flexibility to develop and implement the plan using a number of strategies, accounting for unique circumstances and priorities. For Georgia, a smartly crafted plan that embraces energy efficiency will save the state’s residential and commercial energy customers money while preventing thousands of heart attacks and cases of respiratory illness associated with coal pollution.
However, the plan is currently on hold in federal court pending a lawsuit from utilities and states across the country, and the state Environmental Protection Division has chosen to halt its compliance planning and stakeholder outreach.
Both critics and supporters of the Clean Power Plan agree that energy costs should not burden Georgia’s electricity customers, especially those who earn low incomes. Georgia residents face the fifth-highest total energy costs in the nation, averaging more than $180 per month, which is precisely why we should avoid business as usual. Without any changes in the way we produce and use electricity, Georgia households can expect an 8.4 percent increase in electricity bills over the next 15 years.
The Clean Power Plan, when implemented in the most cost-effective way, could actually cut the average Georgia household’s electricity bill by 8.9 percent, eliminating any increase and saving that household a total of $2,070 over the next 15 years. This would represent a cumulative electricity bill savings of $8.5 billion – money that can be used for other household goods and services rather than paying for out-of-state coal and natural gas to run Georgia’s power plants.
The good news is that Georgia is in a unique position to benefit under the Clean Power Plan because of our significant transition from coal to cleaner energy sources. Since 2013, Georgia Power has retired aging coal plants and converted others to natural gas. At the same time, the falling price of solar panels and solar-friendly policies adopted by the Public Service Commission have launched Georgia as one of the fastest-growing solar markets in the nation. That trend was further cemented this summer when the PSC voted to add up to 1,600 megawatts of cost effective solar and wind power to our energy mix by 2021. That’s roughly enough energy to power 264,000 homes!
Interestingly, the PSC also voted to allocate Georgia Power Co. customer money to study a new nuclear plant in Stewart County, noting the increasing importance of carbon-free power. While Georgia’s goal under the Clean Power Plan will be met in large part by the under-construction nuclear units at Plant Vogtle, nuclear energy has not been selected in my modeling, which optimizes future utility system investments based on least-cost power options.
Energy efficiency, on the other hand, is the lowest-cost and most underutilized resource available to utilities, businesses, and residents. Notably, the City of Atlanta has emerged a nationwide leader in the Better Buildings Challenge, a voluntary commitment from building owners to reduce energy usage by 20 percent by 2020 (over 2010 levels). To date, offices totaling more than 100 million square feet have participated in the program, saving businesses money on energy bills and reducing Atlanta’s carbon footprint at the same time.
By emphasizing efficiency, Georgia residents and companies could experience similar benefits with a smartly crafted Clean Power Plan. Stephanie Benfield agrees, based on her experience as director of Atlanta’s Sustainability Office, that, “energy efficiency is the key to low cost integration of cleaner energy that significantly benefits the bottom line of businesses – large and small, while reducing dirty energy sources that cause climate change.”
Energy efficiency is especially important in Atlanta. A recent study by the American Council for an Energy Efficient Economy concludes that Atlanta has the fourth highest energy burdens of any city across the country. On average, utility bills consume 5 percent of the income of an average Atlanta household and more than 10 percent of a low-income household’s income. A quarter of Atlanta’s low-income population experiences an energy burden 18.2 percent or higher.
Looking beyond the Clean Power Plan, energy efficiency avoids locking Georgians in to paying for unnecessary and expensive infrastructure or over-committing to any one fuel source. It is a regret-free investment should utilities face even stricter carbon regulations in the future.
Building on the progress of Georgia’s move beyond coal, energy efficiency will make the transformation to a low-carbon economy more affordable for customers. Accordingly, the state should prepare to comply with the Clean Power Plan as soon as possible by considering the lowest-cost option, prioritizing the needs of households with limited means, and conducting meaningful stakeholder outreach statewide.