Provisions in Senate Bill 7, enacted in the 1999 Texas Legislature, mandated that at least 10% of an investor-owned utility's (IOU) annual growth in electricity demand be met through energy efficiency programs each year. Due to the success of the programs, goals for energy efficiency were increased through House Bill 3693 during the 2007 legislative session. The latest energy efficiency legislation, Senate Bill 1125, was passed in 2011. This bill will stabilize energy efficiency goals in future years by changing the goal metric from a percentage of load growth to a percentage of total peak load.
Currently, the IOUs are required to meet 30% of their growth in demand through energy efficiency programs.
PUCT Subst. Rule 25.181
The Public Utility Commission of Texas (PUC) Substantive Rule 25.181 (Energy Efficiency Rule) establishes procedures for meeting this legislative mandate. Effective January 1, 2013, the latest Energy Efficiency Rule switches the goal metric from a percentage of load growth to a percentage of peak demand.
Utilities are required to administer incentive programs to meet the mandated energy efficiency goals. Programs are implemented through retail electric providers and energy efficiency service providers and are designed to reduce system peak demand, energy consumption, or energy costs. Utilities must achieve their energy efficiency goals through either standard offer programs (SOPs) or market transformation programs (MTPs). Programs are made available to all customers, in all customer classes. This gives each customer a choice of a variety of energy efficiency alternatives.
For more information on how the energy efficiency programs work, please see our Program Basics page.
Energy Efficiency Rule, Effective January 1, 2013:
Previous Energy Efficiency Rules: