Dive Brief:

• Utilities and regulators in the Southeast United States “continue to underinvest and deprioritize” energy efficiency, leaving many households with some of the nation’s highest power bills, the Southern Alliance for Clean Energy said in a Monday report.
• The analysis focuses on efficiency savings as a percentage of a utility’s annual electric retail sales and concludes the region has “consistently lagged far behind other regions.” SACE said a “massive infusion” of federal funding could change that, however.
• In particular, the report points to Tennessee Valley Authority, Florida Power & Light and Alabama Power, as the region’s weakest performers on energy efficiency. TVA and FPL say the report doesn’t tell the whole story, while Alabama Power did not respond to a request for comment.

Dive Insight:

The Southeast U.S. has a history of underinvesting in energy efficiency, but SACE officials say policy moves at the federal level could turn that around.

The Inflation Reduction Act last year and the Infrastructure Investment and Jobs Act of 2021 represent a “once in a lifetime infusion of federal funds in energy efficiency,” SACE Executive Director Stephen Smith said in a Tuesday webinar discussing the report.

The two measures could include up to $62 billion for energy efficiency, according to SACE, including rebate dollars, tax credits, loan programs and competitive grant opportunities. For the Southeast, there are $1.8 billion in direct funding allocations, said Forest Bradley-Wright, SACE energy efficiency director.

Electric utilities in the Southeast achieved energy savings of 0.19% in 2021, according to SACE’s report, versus a national average of 0.68%. Alabama and Tennessee utilities achieved 0.01% savings, while Florida achieved 0.08%. Most successful in the region was North Carolina, according to SACE, which had 2021 energy savings of 0.57%.

The “opportunity” of efficiency can be compounded, Smith said, because energy efficiency benefits more than individual consumers. It is “a form of economic development because it is a labor-intensive way to go in and really work, in a very direct way, in communities with good paying jobs,” he said. But utilities in the region “have a very narrow definition of what is economic development.”

In particular, Smith pointed to TVA which he said is “constantly crowing about economic development.”

TVA is the largest public power utility in the United States and has said it plans to focus on efficiency in its next integrated resource plan. TVA officials say they plan to start work on the next IRP this year.

“Moving forward, TVA is looking at a significant expansion of its energy efficiency programs to help low-income areas through its Home Energy Uplift and similar programs,” spokesman Scott Allen Fiedler said in an email. This year the utility will invest an additional $5 million in the program to pair with matching funds and enable an $11 million investment in the program.

“Unlike bill assistance, Home Uplift focuses on making repairs that enable low-income households to meet their energy needs in the years to come,” Fiedler said.  He also noted the utility has been recognized by the federal government’s Energy Star program for its efficiency programs.

SACE’s report puts special focus on manufactured housing, which is prevalent in the Southeast. Florida has the most manufactured homes in the country, while North Carolina ranks third.

"The amount of energy that [type of] household will use is higher than in single-family and multifamily homes, by about 50%,” Bradley-Wright said. “So there ought to be considerable opportunities to capture energy savings.”

The first energy efficiency standards for manufactured homes went into effect in 1994, he added. “There still are a majority of manufactured homes out there that predate those energy standards ...  that means that they're durable, long lasting homes, but have high energy intensity, making them a priority for providing programs.”

There are more than 830,000 manufactured homes in Florida — about 10% of the national total, SACE said. 

Florida Power & Light is the largest utility in the state but “unfortunately, FPL has consistently resisted expanding energy saving programs — both as a matter of policy and as a matter of company practice,” SACE’s report said.

Gulf Power, which merged with FPL in 2022, also ranked near the bottom of SACE’s analysis.

FPL spokesperson Chris McGrath said the utility continues to support “cost-effective energy efficiency programs that benefit all customers regardless of whether they participate.”

“We have long believed that empowering our customers to make energy-efficient choices that are right for them is a better approach than charging higher electric rates to pay for inefficient programs that only some customers can use,” McGrath said in an email.

Alabama Power had the lowest efficiency savings among major utilities in the region in 2021, according to SACE.

“Alabama does not require utilities to conduct formal integrated resource planning,” the report said. “What Alabama Power files with the commission as its resource plan lacks even the most basic elements of other utilities’ IRPs, namely disclosure of its modeling assumptions and consideration of energy efficiency as an alternative to supply-side resources.”

“Failure to conduct transparent integrated resource planning is a big part of why Alabama consistently has the worst efficiency performance in the Southeast, and its customers have among the nation’s highest electricity consumption and monthly bills,” SACE said.

Alabama Power did not immediately respond to a request for comment.