Energy Efficiency

Natural gas homes are among the most energy efficient, which can mean savings for customers and the environment.

Energy efficiency and conservation programs are a key component in reducing greenhouse gas emissions and helping consumers manage their energy bills.  AGA members have demonstrated a commitment to investing in energy efficiency and to delivering savings to consumers through programs that actively promote cost-effective and prudent approach to energy efficiency.

Natural Gas Utilities Deliver Energy Efficiency - AGA member utilities, serving 32 million residential customers (50 percent of the U.S. total) administer 53 natural gas energy efficiency and conservation (EE) programs in 27 states and plan to implement several others.  During the 2006 EE program year, AGA natural gas utilities allocated between 0.32 and 10 percent of their net annual natural gas distribution revenues for EE programs, and earmarked more than $280 million for EE program budgets.  Residential customers saved 9.5 TBtu of gas, averaging 8 percent of usage, and avoided 0.5 Million metric tons of carbon dioxide emissions. 

Help for Low-Income Customers - As energy and other commodity prices rise, low-income customers will continue to be the hardest hit.  AGA members have taken the lead in advocating increased funding for Low Income Energy Assistance Program (LIHEAP) as the most direct means to assist those in need meet their basic energy needs.  LIHEAP is a federal block grant program that provides financial assistance to low- and fixed-income individuals for fuel and utility bills and for low-cost weatherization and energy-related home repairs.  More than half of LIHEAP beneficiaries use natural gas heat, and more than eighty percent of AGA members administer energy efficiency and weatherization programs directed at low-income residential customers.  In addition, natural gas utilities deliver programs that assist low-income customers with bill payments, utilizing LIHEAP funds as well as ratepayer and/or shareholder funds. 

Energy-Saving Resources for Natural Gas Consumers - The average American home uses one third less natural gas than three decades ago.  Utility energy efficiency programs have been an important driver in this reduction in per-capita natural gas use.  A number of natural gas utilities implement programs that allow consumers to reduce energy consumption with more efficient appliances and tighter building envelopes.  In replacing equipment with efficient natural gas appliances, consumers can save energy, lower utility payments, and contribute toward cleaner air and a sustainable environment by reducing emissions of air-polluting compounds and greenhouse gases.

Tax Incentives for Energy Efficiency - The Energy Policy Act of 2005 put in place federal tax credits for home and commercial building owners that install energy efficient appliances and other energy saving measures, such as solar equipment, microturbines and fuel cells.  The majority of the tax incentives expired December 31, 2007.  Congress is currently deliberating on whether to extend those tax credits. 

Regulatory Incentives for Utilities to Promote Energy Efficiency - AGA continues to support movement toward regulation that allows innovative rate designs to help natural gas utilities in their conservation energy efficiency (EE) efforts.  Traditional rate structures serve as disincentives for utilities to provide energy-saving products and services, since the allowed rate of return is calculated based on the amount of gas delivered to consumers.  Thus any effort to reduce natural gas consumption would hinder utilities ability to recoup invested fixed costs.  "Decoupling" of utility revenues from natural gas sales is one method of removing such EE market impediments.  Other regulatory incentives that would empower utilities to provide energy efficiency (EE) programs include non-volumetric and other innovate rate designs; recovery of EE program-related costs; recovery of revenue and margin losses associated with implementing EE programs; and performance-based incentives for utility shareholders and/or ratepayers that attain specific success metrics (such as predefined energy savings and/or cost efficiency targets). 

Measuring Energy Efficiency:  Full Fuel Cycle Analysis & Building and Appliance Codes and Standards - Current trends indicate that natural gas utilities will soon operate in a carbon-constrained economy that will make it necessary to measure the carbon footprint of energy consumers to demonstrate improvements in energy efficiency.

Natural Gas, Energy Efficiency and Climate Change - The natural gas industry has responded to consumers' and regulators' concerns regarding CO₂  emissions and greenhouse gases with a variety of initiatives.  Climate change legislation is currently under consideration in the U.S. Congress.  

Natural Gas Demand, Price and Energy Efficiency - Residential customers have progressively reduced their consumption of natural gas over the past thirty years.  This trend is particularly evident in recent years, where declining natural gas usage per customer more than doubled compared to earlier decades.  Natural gas demand for electricity generation, on the other hand, has steadily increased, contributing to upward pressure on natural gas prices.  Studies have shown that a shift in natural gas demand from gas-fired electricity generation to residential and commercial direct applications would contribute significantly toward improved energy productivity, reduced overall energy costs, avoided carbon dioxide emissions, and a more secure U.S. energy resource base.