Energy efficiency programs provide a means of addressing electric demand growth while minimizing the need for new generation resources. Investor-owned utilities, municipal electric utilities, and electric cooperatives have offered these programs to commercial and residential customers for decades. In the Texas deregulated electric market, however, there was a question as to how these programs would proceed for investor-owned utilities.
The unbundling of utility functions diminished the imperative for offsetting new generation. Therefore, the Texas legislature mandated that investor-owned Transmission and Distribution Utilities (TDUs) continue to provide energy efficiency programs to offset a percentage of annual demand growth. TDUs recover their program costs through an Energy Efficiency Cost Recovery Factor that is part of their PUC-approved tariff. This allows for the socialization of each TDU’s program costs among its customers.
New Construction and Retrofit are primary classifications of residential energy efficiency offerings. New construction offerings include energy efficient home design and construction. Energy Star guidelines often serve as the basis for these savings-by-design offerings. Retrofit efficiency programs are remodels of existing homes and include measures such as HVAC, water heater, window, and insulation upgrades. Other residential program classifications include PV Solar, Education, Load Management, and Appliance Recycling.
Residential customers typically work through a TDU-approved project sponsor. These third-party contractors oversee the design and implementation of the energy efficiency project. TDU incentives are paid to the third-party who, in turn, shares the incentive based on its agreement with the customer. This arrangement is essential to maintaining the integrity of the energy efficiency programs. Measurement and verification of electric demand and usage savings are often modeled or formulaic. Therefore, the TDUs rely on approved project firms to ensure that all projects meet program standards.
Source: Annual TDU filings with the Public Utility Commission of Texas
Details on specific energy efficiency program offerings can be found at the Texas Energy Efficiency website maintained by the Electric Utility Marketing Managers of Texas. Many programs have subscription limits so it is important to act early in the program year and verify with the TDU that incentives are still available. Also, ask your energy efficiency contractor about municipal, state, and federal incentives that might also be available for a given project.