Return to Blog

Energy efficiency cut New England prices by 24% in winter 2014

Energy efficiency savings lowered New England’s wholesale electricity prices by 24% in the winter of 2014, according to a report released Thursday by the Acadia Center, an energy advocacy group.

Efficiency programs suppressed electric demand by 13.7% from January through March 2014, lowering payments to generators by $1.49 billion, the report said.

With New England looking for ways to cut its power prices, the group said the region’s states should prioritize energy efficiency investments, which cost about 4 cents/kWh.

But efficiency is not a one-size “cure-all” for the region’s electricity needs, said Jamie Howland, Acadia Center director for energy efficiency and demand-side initiative.

Wholesale electric prices soared in New England in the year-ago winter on bitterly cold weather and natural gas pipeline constraints. New England’s power plant fleet has become increasingly reliant on natural gas.

In preparation for the winter that just ended, ISO New England made changes to its winter reliability program by providing incentives for power plants that use several types of fuel, paying generators for unused fuel and paying for demand-response resources.

Despite colder temperatures last winter than the year before, the average cost of wholesale electric energy in New England from December through February was $76.64/MWh, down from $137.60/MWh a year ago, ISO-NE said.

Various factors, including energy efficiency, led to the lower wholesale prices, the ISO said last week. Energy efficiency measures reduced peak demand by an additional 265 MW compared with a year ago, the grid operator said.

Partly reflecting the region’s high wholesale power prices, New England states generally have aggressive energy efficiency programs, with Massachusetts and Rhode Island efficiency budgets at levels that aim to capture all cost-effective savings over 10 years, Howland said.

Led by Massachusetts, New England’s efficiency investments climbed to $900 million last year, up from $475 million in 2010. ISO NE expects energy efficiency programs will keep load growth essentially flat over the coming years.

Massachusetts saved about 1.3 million MWh last year, reducing electric use by 2.7%, according to preliminary analysis of statewide data. The state reduced sales by about 1.1 million MWh in 2013.

Since 2002, electric efficiency programs have reduced electricity demand in New England by almost 2.2 GW, according to the Acadia Center.


Disclaimer: Although the information contained herein is from sources believed to be reliable, TFS Energy Solutions, LLC and/or any of its members, affiliates, and subsidiaries (collectively “TFS”) makes no warranty or representation that such information is correct and is not responsible for errors, omissions or misstatements of any kind. All information is provided “AS IS” and on an “AS AVAILABLE” basis and TFS disclaims all express and implied warranties related to such information and does not guarantee the accuracy, timeliness, completeness, performance or fitness for a particular purpose of any of the information. The information contained herein, including any pricing, is for informational purposes only, can be changed at any time, should be independently evaluated, and is not a binding offer to provide electricity, natural gas and related services. The parties agree that TFS’s sole function with respect to any transaction is the introduction of the parties and that each party is responsible for evaluating the merits of the transaction and credit worthiness of the other. TFS assumes no responsibility for the performance of any transaction or the financial condition of any party. TFS accepts no liability for any direct, indirect or other consequential loss arising out of any use of the information contained herein or any inaccuracy, error or omission in any of its content. This document is the property of, and is proprietary to, TFS Energy Solutions, LLC and/or any of its members, affiliates, and subsidiaries (collectively “TFS”) and is identified as “Confidential.” Those parties to whom it is distributed shall exercise the same degree of custody and care afforded their own such information. TFS makes no claims concerning the validity of the information provided herein and will not be held liable for any use of this information. The information provided herein may be displayed and printed for your internal use only and may not reproduced, retransmitted, distributed, disseminated, sold, published, broadcast or circulated to anyone without the express written consent of TFS.