Public Citizen Testimony in Support of SB 2994 — Energy Efficiency Goals
Public Citizen Testimony in Support of SB 2994 -- Energy Efficiency Goals
To: Chairman Charles Schwertner and the Members of the Senate Committee on Business & Commerce.
CC: Sen. Phil King, Sen. César Blanco, Sen. Donna Campbell, Sen. Brandon Creighton, Sen. Nathan Johnson, Sen. Lois W. Kolkhorst, Sen. José Menéndez, Sen. Mayes Middleton, Sen. Robert Nichols, Sen. Judith Zaffirini
Via hand delivery and by email.
From: Kamil Cook (kcook@citizen.org) and Adrian Shelley (ashelley@citizen.org), Public Citizen, 512-477-1155
Re: SB 2994 – Public Citizen testimony in support
Dear Chairman Schwertner and Members of the Committee:
On behalf of 30,000 members and supporters in Texas, Public Citizen appreciates the opportunity to testify in support of SB 2994, relating to energy efficiency goals and programs. We support this bill because it would result in modest improvements to the state’s energy efficiency goals. We join with the Sierra Club in recommending certain improvements.
Energy efficiency is still the cheapest opportunity for grid stability.
Energy efficiency is the cheapest form of energy, as this levelized cost comparison illustrates:1
In contrast, most demand-side solutions are expected to cost many billions of dollars without the offsetting benefit of reducing energy use and lowering bills. A direct cost comparison of strategies shows that energy efficiency is the best opportunity in Texas. According to an analysis by the American Council for an Energy-Efficient Economy, Texas could spend $4.9 billion over five years on demand side strategies to achieve:2
- 11,400 MW of winter peak load reduction,
- 7,650 MW of summer peak load reduction, and
- 9 million households worth of energy efficiency and demand response upgrades.
This strategy compares favorably to the cost of the Texas Energy Fund, for which a $5 billion investment in new gas plants was expected to bring 9,781 MW of additional capacity. (None of which has been built yet.)
ACEEE projects these demand-side proposals to be cheaper than any supply-side alternative, costing an average of just 5.6 cents/kWh over their lifetimes. Once this investment is made, it will save customers money and provide benefits to our grid for 10-20 years.
Another ACEEE study found that $1.6 billion of investment in high-efficiency heat pumps total over 15 years could achieve a 12 gigawatt winter peak demand reduction and savings of over $15 billion. This is the equivalent of 40 new 300 MW gas plants.3 This would offer massive savings and put more dollars into the pockets of Texans. Replacing resistance heating with energy-efficient heat pumps can also save the average Texan $300 a year on their utility bill.4
Investments in energy efficiency can also begin almost immediately. The TEF has not generated a single megawatt of electricity despite being created by the legislature and approved by Texas voters in 2023. Cost concerns and supply chain constraints have delayed new gas generation.5
Finally, energy efficiency is an employment opportunity for Texas. In 2023 there were 164,470 jobs in energy efficiency.6 That number should grow as the state sets stronger energy efficiency targets.
This bill will save Texans money.
Energy efficiency upgrades help regular Texans save money. Whether it is replacing inefficient lightbulbs with LED’s, replacing an old refrigerator with a newer one, or using a more efficient dishwasher, Texans can save hundreds to thousands of dollars in electricity bills through simple upgrades to their home. Another estimate puts the heat-pump opportunity at $481 per year of savings for the average family.7
The bill savings provided by energy efficient appliances will benefit vulnerable Texans the most. Right now 45% of Texans are already making difficult choices between food, medicine, and energy.8 But the low-income communities and communities of color who will benefit the most from energy efficiency have also had the most difficult time investing in energy efficiency and weatherization upgrades. For this reason we recommend the bill include a 5% set aside for renters in multi-family residences.
Energy efficient homes are safer and can save lives during power outages.
One energy efficiency strategy, weatherization, provides public safety benefits as well. Weatherization in homes includes insulation, double-pane windows, weather stripping around doors, windows, and plumbing, and optimizing HVAC equipment. These energy efficient investments make a home more comfortable and safer.
Some power outages in Texas are caused by extreme weather events such as winter storms. Extreme weather, including winter storms and heat waves, and power outages cost some Texans their.9 When the electricity goes out at home, energy efficiency upgrades to the building envelope help make a home feel comfortable and remain at a livable temperature for longer.10 This is a benefit that the Texas Energy Fund and other generation-only strategies cannot deliver.
Texas needs stronger energy efficiency goals.
Of the states with energy efficiency goals, Texas now ranks near the bottom.11 Years of weak goals means Texas has a significant opportunity with comparably little investment. Demand reduction strategies are cheaper than the gas investment attempted by the Texas Energy Fund. The cheapest megawatt of electricity is the one that you don’t buy.
Some projections have demand in ERCOT tripling by 2039.12 This massive projected demand increase means we should pursue every available strategy to make supply and demand meet. Energy efficiency and other demand-side strategies are cheap, effective, and absolutely necessary.
We support these proposed improvements to SB 2994.
We join with the Sierra Club in supporting these specific improvements to the bill.
- Set a stronger energy savings goal. Public Citizen has long supported a stronger energy savings goal such as the 1% goal that has passed the Senate before.
- Increase the demand reduction and energy savings goal from 3% to 5%.
- Earmark 5% of the program budget for renters in multi-family residences.
- Place a cost cap of 20-35% on the amount that utilities can recover from these programs.
We ask you to support SB 2994, including these improvements, and set strong goals for energy efficiency in Texas.