Efficiency Standards

Statewide Energy Efficiency Resource Standards (EERS) require or encourage utilities or third-party administrators to achieve specific savings or spending targets in order to reduce energy consumption. An EERS provides stable rate-payer funding for energy efficiency programs and can fuel long-term energy savings in some states. The EERS applies to all utilities within the state, while in others the standards are limited to those regulated by the state utility commission or those larger than a particular size.

Successful electric and natural gas energy efficiency programs require stable, multi-year funding. In addition, there are significant benefits to offering both electric and natural gas efficiency programs and providing consistent statewide programs. This is particularly true if utilities are encouraged or required to work collaboratively and offer similar or complementary portfolios of energy efficiency programs as their neighboring utility, or if there is a third-party administrator operating core programs across the state.

Midwest states have recognized the importance of energy efficiency and adopted statewide policies to encourage or require utility-focused energy efficiency savings. Several Midwest states have enacted mandated energy efficiency resource standards through legislation or regulation. In other states, policies encourage (rather than mandate) efficiency to be incorporated through the utilities' respective planning processes or on a utility-by-utility, case-by-case basis.

More recently, a few Midwest states have begun reevaluating statewide energy efficiency policy, including transitioning from an EERS to goal-oriented Integrated Resource Planning (IRP) processes.

Midwest States with Efficiency Standards

State Electric Standard Gas Standard
Illinois
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Mandatory

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Mandatory

Indiana Overturned  
Iowa
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Mandatory

 
Kansas
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Voluntary

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Voluntary

Kentucky    
Michigan
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Mandatory

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Mandatory

Minnesota
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Mandatory

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Mandatory

Missouri
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Voluntary

 
Nebraska    
North Dakota    
Ohio
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Mandatory

 
South Dakota

 

 
Wisconsin
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WI has a spending-based public benefits fund rather than a savings-based EEPS.

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WI has a spending-based public benefits fund rather than a savings-based EEPS.