Last year, the stimulus package funneled $2.8 billion through the Energy Department for cities and counties to reduce their carbon footprint through Energy Efficiency and Conservation Block Grants. While the federal budget for 2011 includes nothing for the program, at least 10 states are making the most of their allocations.

The Center for American Progress and Energy Resource Management Corp. analyzed energy-efficiency regulations and incentives in California, Connecticut, Maryland, Massachusetts, New Jersey, New York, North Carolina, Ohio, Pennsylvania, and Texas to see how they maximize resources:

  • In addition to requiring utilities to meet a certain percentage of demand with renewable sources, make efficiency a qualifying form of clean energy as a tradable credit in energy markets.
  • Require utilities to meet a percentage of future growth in demand through efficiency instead of increasing supply.
  • Separate transmission and distribution utilities from power generation.
  • Encourage utilities to promote conservation by allowing them to decouple rate structures.
  • Align efficiency with shareholder benefits (i.e., bonus rates of return and reimbursing program costs) that make efficiency a core business practice.
  • Penalize utilities that don't meet efficiency standards.
  • Determine the value of efficiency investments through cost-benefit tests.
  • Link the benefits of efficiency measures to the building, not the owner.
  • Finance upfront capital costs for efficiency measures through municipal or other service assessment mechanisms.