ACEEE'S GRAPEVINE ONLINE

January 8, 2007

STATE REGULATORY INCENTIVES FOR UTILITY ENERGY EFFICIENCY PROGRAMS ARE GATHERING MOMENTUM

The ACEEE Utilities Program released a new report, Aligning Utility Interests with Energy Efficiency Objectives: A Review of Recent Efforts at Decoupling and Performance Incentives, in early November. The report presents the results of a national review of state regulatory approaches for encouraging utilities to support customer energy efficiency programs.

The project findings show that interest in these strategies is spreading rapidly. High fuel costs, concerns over system reliability, and increasing awareness of the need to address environmental concerns such as climate change, have all converged to create circumstances where there is widespread interest in expanding utility sector energy efficiency efforts. As a result, an increasing number of states are adopting regulatory mechanisms such as "decoupling" and shareholder incentives for achieving energy efficiency targets.