to system adequacy the ability of the electric system to supply the aggregate energy demand at all
times because it reduces the base load as well as the peak power demand. This reduction in peak power
requirements can also contribute to system security the ability of the system to withstand sudden
disturbances by reducing the load and stress at various points in the power distribution system, thereby
decreasing the likelihood of failures.
The incentive programs operated by electric and gas utility companies have offered rebates, low
interest loans, and direct installation programs that have led to the accelerated market penetration of
many energy efficient building products such as high efficiency fluorescent lighting and air conditioning,
as well as low flow showerheads and attic insulation. However, these programs have been designed by
individual utility companies, each with their own unique goals and resources, thereby further contributing
to geographic variability in the supply of and demand for energy efficient building products and services.
More recently, a number of public benefits programs have taken on the functions that have been tradi
tionally part of the incentive programs, and have produced strong returns on investment.
review of the performance of utility based financial incentive programs concluded that in 2002, the
programs saved 0.626 quads of energy and averted 10.2 MMTC (representing almost 2 percent of the
599 MMTC emitted from the building sector in 2002).
Despite the strong evidence of the cost effec
tiveness of these programs, more work is needed to fully account for costs and benefits.
Low Income Weatherization Assistance. Residences occupied by low income citizens tend to be
among the least energy efficient in the housing stock. Partly as a result, low income households spend,
on average, 14 percent of their income for energy needs, compared with the 3.5 percent of income spent
by other households. The DOE's Weatherization Assistance Program has served as the nation's core pro
gram for delivering energy conservation services to low income Americans since it was created under the
1976 Energy Conservation and Production Act. More than five million homes have been weatherized since
the inception of the program.
The program reduces average annual energy costs by an estimated $218 per household (at current
prices). Energy savings for each home weatherized is estimated to average 29.1 MBtu/year. For the 104,683
homes weatherized in 2002, this amounts to energy savings of 3.05 TBtu.
Assuming a comparable number
of homes have been weatherized by the DOE program annually over the past 20 years, the energy savings of
the program in 2002 is estimated to be 0.061 quads. Based on an average of 0.25 metric tons of carbon
Towards a Climate Friendly