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The energy efficiency portion of the CP will net lower electricity prices

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The energy efficiency portion of the CP will net lower electricity prices

NRDC, 12 – Natural Resources Defense Council Issue Brief (“Using the Clean Air Act to Sharply Reduce Carbon Pollution from Existing Power Plants, Creating Clean Energy Jobs, Improving Americans’ Health, and Curbing Climate Change” December, http://www.nrdc.org/air/pollution-standards/files/pollution-standards-IB.pdf)
The results from the model show that the proposed approach would begin to modernize and clean up America’s electricity sector while modestly reducing the nation’s electricity bill. This is because energy efficiency programs adopted in response to the incentives created by the approach would cause overall demand to decline by 4 percent, rather than increase by 7 percent. Meanwhile, coal-fired generation would drop 21 percent from 2012 to 2020 instead of increasing by 5 percent without the proposed carbon standard. Natural gas generation would rise by 14 percent, while renewables rise by about 30 percent (assuming no new state or federal policies to expedite an increase in market share for renewables).

Investments in energy efficiency and demand response are the lowest cost compliance pathway—much cheaper than building new power plants or installing pollution control equipment—so including this flexibility significantly reduces overall costs. Energy efficiency consistently delivers over three dollars in savings for every dollar invested, which is one of the many reasons utilities have scaled up annual investment from $2.7 billion in 2007 to nearly $7 billion in 2011, with a corresponding increase in energy savings. See Figure 3: U.S. Electric Efficiency Program Investments, 2007-2011. Efficiency investments reduce the need to build additional power plants and infrastructure, reduce wholesale power prices, and deliver significant bill savings to individuals and businesses. Because substantial reductions in CO2 can be achieved through energy efficiency without building many new power plants or installing lots of expensive pollution control equipment, the total costs of compliance would be low—netting out at $4 billion in 2020.

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