On June 25, 2103, SPEER released “Toward a More Efficient Electric Market: New Frameworks for Advancing Energy Efficiency in Texas,” a first of its kind report providing considerations and suggestions for the inclusion of energy efficiency as a resource in the Electricity Reliability Council of Texas (ERCOT) market.

“Toward a More Efficient Electric Market” discusses possible options for the rapid adoption of energy efficiency as a competitive resource in a market such as ERCOT. It delves into the possibilities for energy efficiency as a resource if Texas were to establish a capacity market or change and enhance the state’s current energy-only market structure. In addition, the paper examines the potential for a uniquely Texan “organized efficiency market” that would be integrated into the energy-only market.

The paper is being circulated among a variety of parties to obtain feedback on the concept and suggestions on how to improve it. We hope to hold a forum among market experts in the near future to focus more on potential energy efficiency market mechanisms. Please let us know of your interest in participating in or attending such a forum.  Please submit comments and indications of interest here.

You can view the paper here:  Toward a More Efficient Electric Market June 2013

The report highlights the potential for energy efficiency in Texas’ unique, energy-only market and how its leadership position for efficiency in the US (ranked 11th in 2007 by the American Council for an Energy-Efficient Economy) has eroded in just five short years so that the state currently ranks in the nation’s bottom third. It argues that lack of support for the state’s once promising efficiency programs threatens their effectiveness by constraining their impact, causing Texas to not just leave billions in savings on the table but also ignore a resource that could possibly help solve one of its biggest problems: resource adequacy.

“This is a critical juncture for Texas’ electric markets as the Public Utility Commission of Texas, ERCOT and the stakeholders of the ERCOT market are seriously considering changes or additions to the current structure,” said Doug Lewin, SPEER executive director. “With this report we argue that energy efficiency must be included in future discussions as doing so will benefit all Texans. We strongly believe that energy efficiency can yield a more economically efficient market here, but like any competitor, it can only prove itself if it’s allowed in the game.”