Electric and gas utilities in the U.S. have grown increasingly supportive of energy efficiency during the last decade. However, to date almost all utility groups have stopped short of actively supporting the implementation of energy codes. Fortunately, emerging frameworks and financial incentives are creating opportunities for utilities to advance energy codes and help their bottom line.

A multitude of barriers currently restrict the utility industry’s support for energy codes:

• A complex code development process
• No history of involvement in code development and a lack of information about how to participate
• A regulatory framework that is outside the scope of the utility
• Lack of education on the benefits that accrue to utilities from strong energy codes
• Energy savings are difficult to quantify
• Insufficient business models
• No federal legislation that supports utilities in return for their support for energy code improvements

Utility Opportunities: State Utility Boards and Peak Power Reduction

Energy codes offer utilities an opportunity to meet their obligations to State Utility Boards and reap financial incentives offered by these bodies. At present, these state boards evaluate utilities on an assumed baseline of 100 percent code compliance. Not only are actual code compliance levels below this level, but this standard fails to give credit to utilities whose efforts improve code compliance. If given due credit for their work, utilities could provide a valuable contribution – potentially working codes into a comprehensive cycle of building activity beginning with research, incentives for construction improvements, and assistance moving innovative measures into codes. Additionally, because they have detailed data on household energy use, utilities can play a major role within states assessing compliance.

By supporting energy codes, utilities can also lower peak power demand, which often occurs on summer afternoons when consumers use air conditioning to cope with high temperatures. To avoid black outs, utilities are forced to invest in building additional power generating capacity to meet peak demand. By making homes more energy efficient, utilities can reduce the need to build additional power generating capacity and therefore save money by averting high capital costs on seldom-used equipment. Widespread utility involvement in energy efficiency efforts could play a major role in the Clean Power Plan, which aims to reduce carbon pollution from power plants.