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US, Canadian gas utilities' energy efficiency investments grow to $1.47B

U.S. and Canadian utilities invested $1.47 billion through natural gas efficiency programs in 2018, continuing the upward trend of spending on energy savings over the past decade, according to a new report from the American Gas Association, or AGA.

Programs targeted to residential customers continued to drive overall spending volume, while customer incentives like rebates and loans accounted for more than half of expenditures by activity. The programs helped utilities save 42.5 trillion Btu in natural gas, or the equivalent of 2.25 million metric tons of carbon dioxide emissions in 2018, according to the AGA's latest Natural Gas Efficiency Programs Report.

U.S. utilities accounted for $1.41 billion of the overall spending in 2018, representing a more than 3% increase from the previous year and 2.5 times the amount invested through energy efficiency programs a decade ago. The figure pencils out to $3.8 million per day in spending on energy efficiency, according to AGA.

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"The programs and investments made every year by America's natural gas utilities provide another example of how local natural gas companies work with their customers to help them save money and protect the environment," AGA President and CEO Karen Harbert said in a statement.

The AGA counted at least 132 ratepayer-funded natural gas efficiency programs in North America, with 125 U.S. programs spanning 42 states. The median age of efficiency programs was nine years, and 59% of the programs have been in place for a decade or longer.

U.S. and Canadian utilities allocated 42% of gas efficiency program budgets to residential customers. Low-income and commercial building customer classes followed behind, drawing 25% and 21% of budgets, respectively.

The U.S. Northeast accounted for the largest share, or 36%, of U.S. and Canadian gas efficiency savings, followed by western states at 28% and the Midwest at 26%.

Respondents to the AGA survey reported they had budgeted a total of roughly $1.4 billion for 2019 gas efficiency programs. The impacts of the COVID-19 pandemic raise questions about expenditures in 2020, as ratepayers decide whether to take advantage of rebates to make discretionary energy efficiency expenditures.

"Certainly these factors are going to come into play this year in places and with programs that have seen or are anticipating to see reduced expenditures as result of the COVID pandemic," AGA Managing Director for Energy Analysis Richard Meyer said during a July 14 conference call.

Meyer noted that he knows of at least one utility that aims to roll any unspent energy efficiency expenditures into 2021, which could expand its future budget even as expenditures in 2020 drop.

"So the overall amount of energy efficiency integrated over time might end up being roughly the same," Meyer said. "But that will depend a lot on what happens with the pandemic and the severity and duration of what the country is going through and how different regions respond to this challenge."