One of the cornerstone presumptions in New York’s energy future plan is that increasing future energy efficiency efforts will play a key role in the transition to a cleaner, greener electric grid. In the summer of 2019 the Governor Cuomo and the New York State Legislature passed the Climate Leadership and Community Protection Act (CLCPA) which was described as the most ambitious and comprehensive climate and clean energy legislation in the country when Cuomo signed the legislation. Among the targets of that legislation is: conserve 185 trillion British thermal units (TBTUs) of annual end-use energy use by 2025, of which at least 20 percent should be from energy efficiency improvements in disadvantaged communities.
Energy efficiency is a major component of New York’s energy planning because if less energy is used then less energy will need to be generated. That concept is not debatable and I support energy efficiency efforts, in no small part, because they can be directed at those least able to pay for the inevitable higher prices resulting from government intervention into energy supply. The question addressed in this post is whether New York’s energy efficiency programs have done well enough that we can expect this to be a substantive component for future energy reduction goals. This post will look at two New York energy efficiency goals: one made in the past and one a key component for future energy needs.
Energy Data Used to Evaluate the Goals
The New York State Energy Research and Development Authority (NYSERDA) publishes an annual a comprehensive summary of energy statistics and data on energy consumption, supply sources, and price and expenditure information for New York State called Patterns and Trends. For anyone interested in New York energy information this is a great resource. One thing that I particularly like is that when you click on a table there is a link to a spreadsheet with all the data. For space reasons the report does not list all the numbers but the downloadable spreadsheet includes everything.
Unfortunately, during the Cuomo Administration, the annual updates are lagging further and further behind. In January 2011, the report updated with data through the end of 2009 was published 13 months after the end of that year. The latest report available, Patterns and Trends – New York State Energy Profiles: 2002-2016, publication date is January 2019 but it did not get released for another month so it came out 26 months after the end of the year. Clearly, the 2017 data update will be even later.
2002 Energy Plan Energy Efficiency
The 2002 Energy Plan includes energy resource assessments including Energy Efficiency that serves as an excellent overview of energy efficiency (EE) assessment for anyone wanting more background information. This assessment summarizes how New York’s EE programs evolved between 1990 and 2001 during the transition from traditional utility regulation to today’s de-regulated system. In those 11 years collective energy efficiency expenditures invested “more than $2.9 billion”. For example, according to Table 4, NYSERDA-Administered System Benefit Charge Energy Efficiency Spending with Projected and Actual Achievements (1998-2006), in this assessment, reductions to annual electric energy production totaled 11,655 (GWh) for an investment $758.7 million. Statewide achievements between 1990 and 2001 included
- Cumulative savings of 57,256 GWh of electricity and 1,688 MW of summer peak demand.
- Cumulative annual savings in 2001 were 7,095 GWh, or about 5.2% of the approximately 137,000 GWh of electricity sales to ultimate consumers during that year.
- Cumulative summer peak demand reductions in 2001 were 1,688 MW, or about 5.4% of the 30,982 MW peak that occurred during that summer.
The 2002 State Energy Plan provided “policies, strategies, and recommendations to provide New York with fairly priced, clean, and efficient energy resources”. The Executive Summary includes the following energy efficiency goal: “The State adopts the goal of reducing primary energy use per unit of Gross State Product (GSP) 25% below the 1990 level of energy use, by 2010.” I will determine whether the State made that historic goal below.
National Grid Natural Gas Supply Energy Efficiency Goals
In response to the New York Department of Public proceeding related to denial of service requests National Grid prepared a summary report to help “enable an agreed long-term solution(s) with New York State by June 2020” so that the solution(s) can be in place and in operation by the winter of 2021/2022. EE projections and programs play a key part in this plan to ensure adequate natural gas supplies. In the report, National Grid discussed historical demand growth and made two projections, a high-demand and a low-demand scenario, to bound their analysis. In the high demand scenario, they assume that 80% of the State energy efficiency targets are achieved and in the low demand scenario they assume that 100% of the targets are achieved. In order to meet future energy requirements, they also included a no-infrastructure energy efficiency project to “reduce Design Day demand through intensive weatherization measures, such as air-sealing and maximized insulation”.
The State’s 2002 EE goal was normalized relative to the state gross domestic product. As a result, the result of that test is irrelevant to determining whether we can have confidence in the energy use projections in the National Grid demand growth projections and their no-infrastructure energy efficiency proposal. What we need to look at is the actual energy use and energy use per customer.
2002 Energy Plan EE Goal Evaluation
The 2002 Energy Plan EE goal is to reduce primary energy use per unit of Gross State Product (GSP) 25% below the 1990 level of energy use, by 2010. Table 2-5b, New York State Factors Influencing Energy Demand and Expenditures, lists the Gross State Product and Table 3-1b, New York Consumption of Energy by Fuel Type, lists energy use for the State. The Evaluation of the 2002 State Energy Plan Goal table lists the annual values from the downloaded spreadsheets for each table, calculates energy use per GSP and then lists the % reduction from 1990 for each year since 1990. In 2010, the reduction in this parameter was 30.1% easily exceeding the 2002 Energy Plan goal of a 25% reduction.
On the face of it this is good news but we also have to ask why did the State meet the goal. Total energy use actually went up 3.2% since 1990. However, the State Gross Product went up 47.5% and that increase more than made up for the energy use increase such that the energy use per GSP parameter went down.
A couple of points for context. Energy use is a function of multiple effects including the weather (extreme heat or cold increases energy use), the economy (when more businesses are making things they use more energy), as well as how efficiently the energy is being used. As a result, a single year to a single year comparison could be mis-leading. Clearly, however, the fact that the energy use per GSP exceeds the goal means that the State effectively met that goal. I think it is also a laudable achievement to increase the GSP that much and keep the energy use since 1990 pretty close to a small increase. On the other hand, the aggressive New York state-wide goals for the future will need to rely on reductions in energy use not just energy use per GSP.
Confidence in the Future Projected EE Goal
While I am impressed that the State met its 2002 energy efficiency goal, in the context of actual energy reduction I believe that it is more important to reduce total energy use and energy use per customer served. If those data suggest that EE is working as well as suggested by the State then we can have confidence that meeting future energy use goals will be achieved. This section describes the data I used and how it was processed to look at that energy use itself.
For this analysis I used data from the following Patterns and Trends appendices that provide electric and gas number of customers and electric and gas sales.
Appendix F-2, New York State Electricity Customers by Sector by Utility
- Table F-2a. Residential Sector Electricity Customers by Utility
- Table F-2b. Commercial Sector Electricity Customers by Utility
- Table F-2c. Industrial Sector Electricity Customers by Utility
Appendix F-3, New York State Electricity Sales by Sector by Utility
- Table F-3a. Residential Sector Electricity Sales by Utility (GWh)
- Table F-3b. Commercial Sector Electricity Sales by Utility (GWh)
- Table F-3c. Industrial Sector Electricity Sales by Utility (GWh)
Appendix F-5, New York State Natural Gas Customers by Sector by Utility
- Table F-5a. Residential Sector Natural Gas Customers by Utility
- Table F-5b. Commercial Sector Natural Gas Customers by Utility
- Table F-5c. Industrial Sector Natural Gas Customers by Utility
Appendix F-6, New York State Natural Gas Sales by Sector by Utility
- Table F-6a. Residential Sector Natural Gas Sales by Utility (Millions of Cubic Feet)
- Table F-6b. Commercial Sector Natural Gas Sales by Utility (Millions of Cubic Feet)
- Table F-6c. Industrial Sector Natural Gas Sales by Utility (Millions of Cubic Feet)
Both sets of data include values for the residential, commercial and industrial sectors. Note that these data are only available back to 2001. Although the primary emphasis is on the goal for natural gas usage, I will include both electric and gas information.
The New York State Natural Gas System Customers, Natural Gas Sales, and Natural Gas Use per Customer Data and Trendstable lists the parameters that I think are more appropriate to evaluate the likelihood that energy efficiency can reduce the amount of natural gas that will be needed for the worst case heating requirements. In 2016 the amount of natural gas used in the residential sector has increased 9.7% since 2002, in the commercial sector the amount used went down 12.8% and in the industrial sector the amount used went down 9.0%. The amount of natural gas used per customer went up 3.9%, commercial sector was down 21.1% and industrial sector was down 56.6%
I have issues with these data that should be kept in mind. In the industrial sector note that the number of industrial customers just about doubled from the 2001 to 2006 years. Looking at the utility data in Table F-5c this was because of an increase at Brooklyn Union Gas. I suspect this is more a reporting artifact than an actual change in the number of industrial customers. Fortunately, that seems to be an exception in the data.
Recall that energy use is a function of weather, the economy and how the energy is used among other things that make the year to year variation and the choice of starting and ending points a concern when trying to determine what is actually going on. In order to try to address this problem I calculated the percentage change of the energy use per customer for different periods. The Alternate Natural Gas Use Trends Comparison table lists the change between the first eight year averages and the second eight year averages of the sixteen years of data available, the first five year averages and the last five year averages in the period of record, and the last five year averages relative to the proceeding five year averages.
Alternate Natural Gas Use Trends Comparison
|Gas Use (Sales per Customer)|
Both the commercial and industrial sectors show impressive reductions in use per customer in the first two alternatives. However, the industrial sector values are skewed by the questionable number of customers data. It is very concerning that during the period 2007 to 2016, when there was extensive energy efficiency investment, that the energy use per customer in all three sectors went up.
The New York State Electric System Customers, Electricity Sales, and Electricity Use per Customer Data and Trends table lists the same electric system parameters for completeness. In 2016 the amount of electricity used in the residential sector has increased 15% since 2002, in the commercial sector the amount used went up 27% and in the industrial sector the amount used went down 14.8%. The amount of electricity used per customer went up 20.9%, commercial sector use per customer went up 22.2% and industrial sector use per customer went up 63.16%.
As was the case with the natural gas numbers there are issues with the number of customers per sector. For example, the number of NYSE&G industrial customers went from ~2,700 in 2002 to 16,292 in 2003 and then back down to ~2,700 in 2004. Something is wrong there. Niagara Mohawk customers in 2001 and 2002 are also suspiciously different than the rest of the years. Otherwise there are no suspect year to year variations.
I addressed the suspicious data issue and the variations due to other effects the same way as the natural gas data. I calculated the percentage change of the energy use per customer for different periods. The Alternate Electric Use Trends Comparison table lists the change between the first eight year averages and the second eight year averages of the sixteen years of data available, the first five year averages and the last five year averages in the period of record, and the last five year averages relative to the proceeding five year averages.
Alternate Electric Use Trends Comparison
|Electric Use (Sales per Customer)|
The sales per customer for all three sectors show increases in the first two alternatives. However, the industrial sector values are skewed by the questionable number of customers data. The good news is that contrary to the natural gas energy use, both residential and customer electric use per customer decrease which is what we would expect if energy efficiency programs were working well. The industrial sector numbers show an increase but that is much more likely due to the changing character of industrial use, e.g., fewer customers but larger users.
I do not dispute that the energy efficiency concept that if less energy is used then less energy will need to be generated is a great thing. In this post I looked at two New York energy efficiency goals: one made in the past and one a key component for future energy needs to see if results to date support this emphasis.
The 2002 Energy Plan included an energy efficiency goal to reduce primary energy use per unit of gross state product 25% below the 1990 level of energy use, by 2010. I found data for gross state product and energy use, calculated the parameter used in the goal and determined the percentage reductions since 1990. In 2010, the reduction in this parameter was 30.1% easily exceeding the 2002 Energy Plan goal of a 25% reduction.
However, upon closer examination, I found that the reason the goal was met was because the gross state product increased more than energy use increased. The gross state product was included in the goal to try to reduce the economy’ effect on energy use. This underscores the importance of evaluating energy efficiency programs based on actually reducing the amount of energy used.
At this time New York’s energy policy is counting on substantive reductions in energy use as part of the plan to reduce greenhouse gas emissions. For example, National Grid’s proposed options to address natural gas supply deficiencies in New York City and on Long Island assume that the New York energy efficiency will meet or exceed 80% of the CLCPA targets and that they could get substantive additional reductions from an intense weatherization project.
I calculated the natural gas and electric energy use per customer rates since 2001 to determine if the energy efficiency investments to date have been successful. The problem is that energy use is not just a factor of energy efficiency but also weather and the economy. To get around that I conclude the best I can do is compare the averages of the last five years to the proceeding five year. For electricity the residential and commercial sector energy use declined as we would expect given the energy efficiency investments. However, natural gas use increased in the residential, commercial and industrial sectors.
This result raises concerns for me vis-à-vis National Grid’s proposed alternative options for supplying natural gas to New York City and Long Island. I suspect that the State will force National Grid to choose options that rely on energy efficiency rather than ones that require new fossil-fuel infrastructure despite the fact that they will guarantee adequate supplies of natural gas. The fact that energy use per customer has gone up suggests that existing energy efficiency programs are not working as well as assumed and will not guarantee that additional natural gas is available on the coldest days.