Energy efficiency savings lowered New England’s wholesale electricity prices by 24% in the winter of 2014, according to a report released Thursday by the Acadia Center, an energy advocacy group.

Efficiency programs suppressed electric demand by 13.7% from January through March 2014, lowering payments to generators by $1.49 billion, the report said.

With New England looking for ways to cut its power prices, the group said the region’s states should prioritize energy efficiency investments, which cost about 4 cents/kWh.

But efficiency is not a one-size “cure-all” for the region’s electricity needs, said Jamie Howland, Acadia Center director for energy efficiency and demand-side initiative.

Wholesale electric prices soared in New England in the year-ago winter on bitterly cold weather and natural gas pipeline constraints. New England’s power plant fleet has become increasingly reliant on natural gas.

In preparation for the winter that just ended, ISO New England made changes to its winter reliability program by providing incentives for power plants that use several types of fuel, paying generators for unused fuel and paying for demand-response resources.

Despite colder temperatures last winter than the year before, the average cost of wholesale electric energy in New England from December through February was $76.64/MWh, down from $137.60/MWh a year ago, ISO-NE said.

Various factors, including energy efficiency, led to the lower wholesale prices, the ISO said last week. Energy efficiency measures reduced peak demand by an additional 265 MW compared with a year ago, the grid operator said.

Partly reflecting the region’s high wholesale power prices, New England states generally have aggressive energy efficiency programs, with Massachusetts and Rhode Island efficiency budgets at levels that aim to capture all cost-effective savings over 10 years, Howland said.

Led by Massachusetts, New England’s efficiency investments climbed to $900 million last year, up from $475 million in 2010. ISO NE expects energy efficiency programs will keep load growth essentially flat over the coming years.

Massachusetts saved about 1.3 million MWh last year, reducing electric use by 2.7%, according to preliminary analysis of statewide data. The state reduced sales by about 1.1 million MWh in 2013.

Since 2002, electric efficiency programs have reduced electricity demand in New England by almost 2.2 GW, according to the Acadia Center.

Source: Platts.com