Washington, D.C. – The American Gas Association (AGA) and the Natural Resources Defense Council (NRDC) joined forces today to highlight the importance of energy efficiency in combating global warming. AGA and NRDC issued a joint statement calling for coordinated incentives, government standards and regulatory reforms that would increase energy efficiency and reduce greenhouse gas emissions nationwide.
“By using a clean fuel, and using it efficiently, America’s natural gas utilities and their customers are leading the way in the fight against global warming,” said Laurence Downes, Chairman and Chief Executive Officer of New Jersey Resources. “Today, the AGA and the NRDC are renewing their call to public utility commissions to consider the merits of decoupling and to adopt decoupling proposals that will create incentives for natural gas utilities to aggressively promote efficiency and conservation.”
“Energy efficiency provides a clear path forward as consumers pay higher and higher energy bills and are facing difficult choices between food, gas for their car, or heating and cooling their homes,” said Ralph Cavanagh, Co-Director of NRDC's Energy Program. “ We and the nation's hometown natural gas utilities are united in a determination to get more work out of less energy, and to create performance-based incentives that not only encourage utilities to reward customers to be more efficient but also have the added benefit of reducing global warming pollution. Making energy efficiency financially attractive for utilities and customers alike is the best way to cut energy bills and curb global warming, at a time when definitive action is needed for both.”
AGA and NRDC have been working together to highlight the importance of energy efficiency since 2004. That summer, the organizations issued a joint statement encouraging state public utility commissions to consider innovative proposals promoting energy efficiency and conservation in a manner that would benefit both customers and shareholders.
The original AGA/NRDC proposal was called “revenue decoupling” and was designed to break the link between utilities' earnings and their customers' energy consumption. In 2004, few states had adopted revenue decoupling. Today, 26 natural gas distribution utilities in 13 states have implemented revenue decoupling programs that serve 20 million residential customers. From Oregon to New Jersey, consumers are benefitting from expanded energy efficiency investments made by their utilities.
The new statement maintains support for revenue decoupling, but goes one step further with advocacy for performance-based mechanisms which provide economic incentives for utilities to promote energy efficiency. Additionally, the statement puts new emphasis on joint support for efficiency standards and tax incentives at the state and national level. The goal is to accelerate improvements in every sector of the economy, including contributions to the enactment of cost-effective efficiency standards and tax incentives, along with consumer education and marketing programs designed to increase home energy efficiency and reduce consumption. The concept of earnings opportunities linked to energy efficiency is at an early stage; however the end result should be a win-win solution for natural gas utilities and their customers.
Among fossil fuels, natural gas has the fewest greenhouse gas emissions. Natural gas homes and appliances are increasingly efficient and produce fewer emissions. The average household today uses 32 percent less natural gas than it did in 1980.