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ACEEE: Carrots for Utilities: Providing Financial Returns for Utility Investments in Energy Efficiency

ACEEE investigates programs instituted by investor-owned utilities (IOUs) to help customers reduce their energy usage.

In a recent report, ACEEE looks into states that utilize shareholder financial incentives that aim to encourage investor-owned utilities (IOUs) to provide energy efficiency solutions that lower customer energy usage. In the past, traditional regulation has not provided financial incentives to utilities for reducing use.

While many businesses and other entities are increasingly concerned with limiting energy consumption, there are two major hurdles to improving energy efficiency among IOUs: the ultimate lessening of utility revenues and a disinterest in spending money to improve efficiency versus investing in new facilities and equipment.

The report's key findings can serve as a resource for policymakers, regulators, utilities, and other entities. In a key finding, ACEEE says states favor incentives based on cost-effective achievement of energy targets. Utilities have tended to consistently meet or exceed established targets.

To view the report, go to ACEEE's website.

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