Energy Efficiency Standards and Targets

An Energy Efficiency Resource Standard (EERS), Energy Efficiency Portfolio Standard (EEPS), or energy efficiency target is a mechanism to encourage more efficient generation, transmission, and use of electricity and natural gas. An EERS is similar in concept to a Renewable Portfolio Standard (RPS), in that an EERS requires utilities to reduce energy use by a specified and increasing percentage or amount each year. There are a variety of ways an EERS policy can be implemented. Some states have a separate EERS and RPS, while other states combine the mechanisms by allowing energy efficiency to meet part or all of an RPS. Efficiency reduction requirements or targets may also be established by state public utility commissions. In some states, public utility commissions determine savings requirements through a collaborative process with utilities. Electricity and/or gas savings requirements for utilities may include flexibility to achieve the standard through a market-based trading system of energy savings certificates. All EERS’ include end-use energy savings. In some cases, distribution system efficiency improvements, combined heat and power (CHP) systems and other high-efficiency distributed generation systems are also included. Penalties for non-compliance vary by state.