[Scott] Next up on "Energy Switch," how to save money on your energy bill.

- Energy prices are going up across the country.

Saving energy gives us a tool right now to immediately help consumers lower their bills.

And of course, saving energy, lowers emissions.

And to meet climate goals, we are going to need to do a lot more to save energy, to use efficient electric technologies.

- Interesting, yeah, good.

- We're an innovative country that loves to solve problems, whether it's increased demand from AI and cryptocurrency, renewable deployment and intermittent resources.

There's so much happening in our industry.

And on the efficiency side, it's the one place where every consumer can participate.

[Scott] Coming up, reduced energy use and emissions through efficiency and conservation.

[Announcer] Major funding for this program was provided by Arizona State University.

Shaping global leaders, driving innovation, and transforming the future.

Arizona State, The New American University.

[upbeat music] - I'm Scott Tinker, and I'm an energy scientist.

I work in the field, lead research, speak around the world, write articles, and make films about energy.

This show brings together leading experts on vital topics in energy and climate.

They may have different perspectives, but my goal is to learn, and illuminate, and bring diverging views together towards solutions.

Welcome to the "Energy Switch."

Reducing energy use saves money, plain and simple.

Reducing energy demand can even reduce prices overall.

It also reduces emissions.

And importantly, it frees up energy on the system for other uses without building more power plants and power lines.

We'll talk about ways that efficiency and conservation can benefit consumers, business, and utilities with two experts who have spent their careers in this space.

Maggie Molina is the executive director of Northeast Energy Efficiency Partnerships, a nonprofit that brings together policymakers and industry to improve energy efficiency in the region.

Laurie Wiegand-Jackson is president and CEO of Utility Advantage, a consulting firm that advises utilities, governments, and businesses on energy efficiency and electricity demand management.

On this episode of "Energy Switch," straightforward talk on energy efficiency and conservation.

Well, let's just pretend for a second like, I really don't care.

I don't care about saving energy, we got it.

Why should I even care about this?

- First and foremost being kind of show me the money, right?

There's savings that you can get from using less energy or being more efficient in the way you use energy and with utility costs rising right now, this is really important.

- Well, do you pay an energy bill?

That's right, affordability is really key.

Energy prices are going up across the country, and saving energy gives us a tool right now to immediately help consumers lower their bills.

And of course, saving energy lowers emissions, and that both greenhouse gas emissions, other pollutants.

And this will be really important to meet those sustainability goals.

- Awesome.

[Laurie] I'd love add one more thing.

- Yeah, you bet.

- I've recently really discovered how much energy AI and crypto mining will require.

And these are two sectors that are growing dramatically, so fast we haven't really understood the impact that it's gonna have on the demand for electricity, especially.

That will mean higher energy bills as demand increases, and lower grid reliability, more blackouts and outages, unless we do something.

And part of that something should be to be more efficient in the way we use energy and to waste less energy.

- And that AI answer takes about 10 times more electricity than the Google search.

- That's exactly right.

- And how much energy do we waste just in general terms?

- Across the economy, about two-thirds of the energy that we consume is wasted, waste heat, byproducts.

And a lot of that is on the supply side, but a lot is on the demand side too, which is what we're talking about here, in our buildings, in our vehicles, our leaky homes, old inefficient equipment.

And that is ample opportunity to set up programs, set up policies to save energy.

- Awesome.

- You know, 20 to 30% of waste for residential consumers is coming from heating and cooling.

I think it's surprising.

People don't realize that we're wasting so much energy.

- Yeah, so you mentioned money.

How much could we save?

- Average residents is spending about $2,000 a year on their energy bills.

- Electricity.

- And natural gas.

- And natural gas.

- If they have it.

And so, if we're looking at that, you know, 40, 30, 40% savings, we're talking about hundreds of dollars a year.

- Right.

- And then broadly, EPRI had conducted a study that said that there was the potential for 365 billion kilowatt hours of savings through 2040 in energy efficiency alone.

- Wow.

- And at 10 cents a kilowatt hour, you're talking about over $35 billion in savings, broadly.

- That's real money.

- That's right.

- Money matters and that is a huge motivator for consumers, businesses to invest in energy savings.

And again, this has worked.

If you look at the success of past energy efficiency policies and programs, today, consumers are saving $2,000 per person per year thanks to past policies, past progress across the economy.

- Yeah, so that's how it would be kind of per capita allocated.

- Right, so per capita.

That's a per capita figure-- - Okay, gotcha.

- Looking across transportation industry, buildings, all of the energy that we saved over the past several decades, that leads to real dollars, real savings right now.

- Interesting.

- And now we need to look ahead and invest to do even more for consumers.

- Yeah, so you're also a [indistinct] then.

- Yes, and in fact, I think the emission reductions were around 143 million metric tons of CO2 equivalent equal to over a million cars taken off the road.

- Yeah, so even if you don't care about the money, if you care about the emissions, it's a good thing to do.

Stuff to add to that?

- I'll just build on that point.

There have been a lot of studies that looked at decarbonization pathway.

So how do we get to a net zero economy, a net zero emissions?

And all of those studies show that one-third of those savings will come from energy efficiency, from efficient electric equipment, maybe even upward to half of those emissions reductions from saving energy.

So there is a lot to do, and huge potential.

- Yeah, yeah.

What's the difference between conservation and efficiency?

- Right, so conservation is taking a behavioral approach, changing habits, whereas energy efficiency is looking at technology solutions.

- So the idea of conservation that I think people could grasp is this idea that we have so much, like, they call it vampire energy.

But how many things do we have plugged in right now?

- Oh, yeah.

- That are consuming energy that we're not using.

It's the coffee maker, it's the air fryer, it's, I mean it's, you know, all kinds of things that we have plugged in.

They're all plugged in and they're using energy whether we're using them or not.

And one of the strategies to resolve that is a smart power strip that lets you just turn off and all those devices turn off.

As opposed to physically having to go and like unplug everything, which frankly people generally aren't going to do.

And energy efficiency is really using equipments and strategies that allow you to get the same or better result but with less energy.

- Okay, you both said technology.

What are some of the new ones that help with efficiency?

- Frankly, whether it's heating and cooling equipment, refrigeration, if you are looking at equipment that's 20 years or older, which oftentimes we have, you know, that equipment is past its useful life.

And it's also many iterations behind on efficiency.

So if you were to just upgrade to current standards, like an energy star certified piece of equipment, right away you're getting efficiency gains.

- Right.

- And what in part drives that are things like appliance standards.

So we do have standards that our Department of Energy has consistently asked manufacturers to do better.

And that's why we see this progress.

It's not, like, amazing technology like, oh, this new thing.

It's the same things we use, just way more efficient.

- We have these technologies available today, and a lot of them are tried and true measures.

Insulation in our homes, air sealing for leaks, high efficiency heat pumps, this is a technology that's been around for a long time, but it's improved dramatically.

These provide both heating and cooling.

So we can think of them like two-way air conditioners, incredibly efficient technology, and building on that, there's also ground source heat pumps.

These are technologies that take advantage of the relatively stable temperatures of the earth below the surface.

- Right.

- Another technology too that is something that is very affordable.

And in fact, oftentimes utilities now are giving them out to customers, are smart thermostats.

By putting in the smart thermostat and putting a schedule on so that, basically increase in temperature or decrease in temperature for heating and cooling is on a schedule.

When you go to sleep, you're not, you know, cooling or heating as much at that time.

But they also have features where if they don't see activity in the house, you can enable it so that it then changes the temperature set points, again to waste less energy.

So that happens automatically.

So these smart thermostats can really do a lot to drive savings, and it's a set-and-forget technology.

- And that's a great example too, going back to efficiency and conservation because that's a very people-centered approach to helping people feel comfortable in their homes and not require a lot of additional work and thinking about it.

- Right.

Have there been federal and state, or even private sector investments in programs around efficiency?

- Appliance standards has been one of these bedrock policies.

And we can extend that to other examples of standards for vehicles.

Tailpipe standard, tailpipe emission standards, so vehicle standards.

Building energy codes are another one.

Again, standards and codes, these ensure that consumers are guaranteed a certain level of energy savings when they purchase a product, purchase a new building or rented a home.

I'm glad you brought up energy star.

I was gonna point that out as well.

This has been another flagship program in the U.S., public, private partnership, and has been really key to sending that signal to consumers, so very market-friendly.

- Right.

- You choose what you wanna purchase, but we're gonna let you know with that little blue star, what is the more energy efficient product and a building as well.

- Cool.

- Another key example is in the utility sector.

So a policy that requires utilities to invest in energy efficiency because it's good for their customers.

And energy efficiency can be treated as a resource to the systems.

- How do we motivate this efficiency?

Not conservation at this point, but just how do you motivate consumers to not just think about efficiency, but to actually start to implement it?

- A lot of studies have looked at this, what motivates consumers?

It's about saving money, and it's about comfort and health, healthy homes for ourselves and for our families.

So these motivators matter because then policies and programs can be designed around getting this information to consumers, But it also point out that motivators only go so far.

We also need to help make it easy to adopt these technologies, participate in these programs or policies.

- Yeah, good.

- I would add education.

Oftentimes people are in a position, especially with that older equipment where they're not thinking about it until it fails.

And when it fails they're then making a very quick decision, and they're not thinking about efficiency or utility rebate programs.

So the more we can educate people, help them understand that, hey, before it fails, replace it.

- Yeah.

- We didn't talk about maintenance, but as far as efficiency gains go, that is another important area.

Improperly maintained equipment can cause a lot of energy waste.

- We're talking about a lot of home use, how about on the utilities side?

- This is an area where policies really matter.

Traditionally, utilities are motivated to sell more energy and not to help their customers save energy.

And a lot of states across the country have changed their policies so that utilities are required to offer energy efficiency service.

Again, goes back to that point of treating efficiency as a resource to the system, help with costs and reliability.

- Right.

- So those policies, efficiency resource standards aligning the utility business model so they are motivated to save energy.

So we're decoupling profits from sales through something called revenue decoupling, or performance incentive mechanisms.

And these are policies to realign a utility's business interest with saving energy.

- Who's paying the difference?

Is that just spread across all the taxpayers then?

- Yeah, through rate payers.

- Yeah, rate payers.

- So rate payers are paying in to fund energy efficiency programs.

- Okay.

- Just like they pay in to have utilities invest in infrastructure for power plants, poles and wires.

- I see.

- And these programs have to meet very rigorous cost effectiveness requirements.

- Okay, and through a rate base of some kind, if the utility is more efficient, that gets spread and that's a benefit to everyone.

So we all pay a little bit for that.

Is that what you're saying?

- That's right.

So it's a benefit to everyone because it's cheaper to invest in saving energy than it is to invest in new supply, new poles and wires, which is why it's good for everyone in the system to pay in.

- Okay, thoughts to add to that?

- As far as incent utilities to do this, you know, they are profit making entities, unless you're like a municipal utility, these are investor-owned utility companies.

And so the idea of the decoupling of revenue from consumption is really important so that, thereby, if consumption is lowered, their revenues are not lowering.

- Sure.

- But other things too are things like bonuses on return on investment.

If they achieve certain high targets for energy efficiency program implementation, and in the end still they're mandated, utilities generally aren't volunteering for the most part to do this.

- I'm trying to think who would resist this.

Who would fight this?

- Large manufacturers primarily are the groups that I've seen kind of fight any surcharges on their utility bills.

- Okay.

- And they generally say that they're going to invest in efficiency 'cause it's good for their business.

They're doing it on their own.

They shouldn't be subsidizing programs that are primarily used by residential and commercial customers.

So it's generally the larger energy consumers, manufacturers who try to make that argument, albeit not very successfully.

- Yeah.

- Can I just add to that?

- Sure.

- Energy efficiency does cause lower prices.

That is the reality 'cause it's basic supply and demand principles at work.

So if we lower demand, we're gonna lower prices.

- Yeah, interesting.

Conservation, a little different concept.

How do we motivate that?

- You know, the idea of saving money, the idea of being a good steward.

One of the things too that can really help to motivate people to conserve is to give them access to information about their energy use.

So for most people, the information we get comes in a utility bill, way after we've consumed that energy.

So we get one piece of information and it's too late for us to really do anything about it, but if we had real time access to information, like on our cell phones and we could see that, oh, when I run the washing machine, my energy consumption goes up by this.

If I run my dishwasher, right, you start seeing how your different appliances, different things you do use energy, then it could motivate you to potentially use less.

- Yeah.

- Also, pricing.

So if we have better data about electricity use at certain times of day, we can send better price signals so that consumers can save energy at key times when the grid is constrained, at peak times of the grid.

And linking pricing structure, pricing design with smart meters, now we're talking about much, you know, more effective tools.

- So if I'm willing to run my dryer on a timer at three in the morning when not much demand, electricity could be cheaper, so I save some money.

- Exactly.

- And help with the, I mean if we think about the demand, it's, you know, kind goes up in the daytime, we're heating and cooling.

Everybody comes home, it cranks for a while, then we all go to bed.

The demand curve.

- Exactly, yeah.

- And so, if we could pull out the amplitude of that some by moving energy use across a day, and get paid to do it, or charge less to do it.

- Exactly.

- Gotcha, yeah.

- The activity that you described is actually something called demand response.

- Okay.

- Responding your demand to some kind of external signal or event.

And that is happening all across the country.

Either through organized wholesale power markets having demand response programs that people could participate in, or the utility itself having programs, they've run air conditioner cycling programs for decades that basically incent you to let them turn your air conditioner on and off at times when the grid is really being challenged.

- I can hear the resistance.

I'm not giving anybody control over what I do.

- Right.

- Is that the-- - So wouldn't it be better if you had control over what you do and you made those decisions?

That you had the information through a price signal that says, hey, the grid is constrained, which means prices are higher.

Okay, with that kind of high price, I'm not gonna use this energy right now to run my dishwasher, I'll do it later, or I'll do my laundry on the weekend.

- Is my electricity cheaper in the middle of the night than during the day?

- So the answer to that could be yes.

- Yeah.

- And it really depends on how you're buying electricity.

If you are having a time of use rate, you're paying the market price for your electricity.

- But-- - I could opt into that.

- You might decide to get a fixed rate and say, you know what, I just wanna lock in my price for 12 months.

Then that opportunity really goes away because you've locked in a fixed price.

- Okay.

- You wanted price certainty, you wanted to eliminate risk, but then you eliminated that opportunity to have those shifting prices.

There's all kinds of creative structures that different third party suppliers have come up with, like weekend pricing versus weekday pricing, and that's much lower.

Or you know, five days of really low cost energy a month.

And then, you know, you do as much as you can on those days.

So it's interesting that they've given a lot of choice to consumers to be able to manage their demand to the pricing structure that they're choosing.

- Interesting.

- It is.

- Also, demand response programs are typically opt in programs for consumers.

And even if they have opted in, there are opportunities to say, no, I'm not going to participate today.

So even when you're in that demand response program, it doesn't mean that it's locked in.

It depends on the design of the program.

Some argue for more opt out offerings 'cause you're gonna get higher participation.

- Right, when we save something, we often tend to use more.

The rebound effect, if you will.

Talk about that.

Is everything we're talking about just get offset by getting more stuff?

- Well, look, there've been a lot of studies that have examined the rebound effect, and they have shown that there is a small but actual rebound effect.

studies have shown it's generally less than 10%.

- Okay.

- But there are ways to design programs to help offset that.

- Yeah, given all this, what gives you hope?

- I mean I have great hope for our future in energy because we're an innovative country that loves to solve problems.

And so, whether it's that we're dealing with this increased demand from AI and cryptocurrency, we're working through renewable deployment and how to take intermittent resources and use things like battery storage to help create a long-term resource that we can depend upon.

We're looking at other technologies around fossil fuel and carbon capture, hydrogen.

There's so much happening in our industry.

And on the efficiency side, it's the one place where every consumer can participate.

- Yeah, how about you?

- We've done this before.

Back in early 2000's, electricity demand was projected to skyrocket.

Two percent per year growth was projected.

[Scott] Right.

- That had regulators concern.

Prices were going up very similar to today, and regulators across the country invested in efficiency policies or adopted efficiency policies.

And it worked.

We kept electricity consumption flat over the last two decades.

And what gives me hope is knowing that we can do this again.

We can double down again on energy efficiency.

It's a resource that can deliver, and one that lowers bills, brings more reliable resource to the grid, and creates jobs and lowers emissions.

- Another generation we gotta bring along here.

- I would encourage people to go on their utility website, see what programs are available to them, contact the representatives that are helping implement those programs and learn more.

I think that by doing that we'll see even greater participation in this, and, you know, we all win with when we do that, so.

- Absolutely, yeah, a lot of things.

Options I have that I didn't really know I have and I'm an energy guy.

It's been great having you both here and learning from you, sharing your experiences.

- Thank you.

- I really appreciate that very much.

I know our viewers will too.

Scott Tinker, "Energy Switch."

Laurie, thanks so much.

- Thank you, my pleasure.

- Thank you, Maggie.

- Thank you.

[Scott] Efficiency and conservation can lower energy consumption, reduce emissions and save money.

Maggie said, efficient energy technologies and policies already save Americans $2,000 per person per year.

Laurie said they could save billions of kilowatt hours of power, or $35 billion in the future.

Mostly this will be through improved versions of existing technology and policy, like heat pumps, power strips, timers, and smart thermostats, appliance standards and building codes that require efficiency.

And simple advancements, like time of use electricity rates, combined with a smart meter, perhaps on your phone, to tell you when to use less to save more.

Our experts explain that we need to treat efficiency and conservation as a resource.

The energy we don't use is cheaper than building new power infrastructure.

Efficiency and conservation makes energy more available and affordable across the system.

Seems pretty sensible.

[upbeat music] ♪ ♪ ♪ ♪ [Narrator] Major funding provided by Arizona State University.

Home to the Thunderbird School of Global Management, redefining management education to empower transdisciplinary leaders.

Arizona State, The New American University.