Each December generally brings with it some events or observances that many of us share: holidays, family gatherings, year-end retrospectives, NEEP Notes.
For us in the Northeast, it also marks the beginning in earnest of the home heating season.
This year, the issue of home heating takes on some new relevance. With natural gas reserves having reached historic lows earlier this year, rising natural gas prices have been on everyone's mind. And, lest anyone think that natural gas prices should only be the concern of those who heat their homes that way, consider that the majority of new electricity generating plants built in this country in the last decade are fired by natural gas. And with natural gas prices having jump nearly 50 percent since Thanksgiving, it's become a problem for all of us.
Fortunately, a lot of thinking is being done about how energy efficiency can play a significant role in mitigating rising natural gas prices. Late this summer, the National Petroleum Council, in its report to the Secretary of Energy entitled Balancing Natural Gas Policy: Fueling The Demands of a Growing Economy, cited as one of its key findings the following: "Greater energy efficiency and conservation are vital near-term and long-term mechanisms for moderating price levels and reducing volatility."
Earlier this month, two new reports from our partner organization, the American Council for an Energy-Efficient Economy (ACEEE) highlighted exemplary natural gas efficiency programs and the impacts energy efficiency can have on natural gas markets. Among the key findings from ACEEE was that a 5 percent reduction in electricity demand would lead to a 20 percent reduction in natural gas prices.
Put another way, energy efficiency investments made now could reduce next year's gas bills by 9 percent, reduce residential gas expenditures by almost $4.4 billion nationally, and save the average residential natural gas consumer almost $73. These savings will continue for the next five years, averaging $96 per year per residential natural gas customer.
How can these opportunities be best realized? For starters, committing to public policies that recognize the benefits of energy efficiency and put it on equal footing with supply-side energy options.
Additional opportunities may also exist in programs that specifically target the natural gas markets. In the Northeast, we're fortunate to have some very effective natural gas efficiency programs in place. Earlier this fall, Doug Foy, Chief of Commonwealth Development in Massachusetts, told attendees at the annual meeting of one of our partner organizations, the Northeast Energy Efficiency Council, that he wants to expand on such efforts and will push for gas efficiency programs for the Bay State that are structured similarly to the systems benefit charge programs in place for the electric utilities. While many questions remain as to how such programs might be structured, a policy framework that recognizes the important role efficiency can play needs to be put in place.
As always, we look forward to working with sponsors, partners, government agencies and anyone else interested in pooling our collective resources to meet this challenge.
In the meantime, all of us at NEEP wish you a most blessed and peaceful holiday season, and a very healthy and happy New Year.
Susan Coakley
Executive Director