Martin Kushler and Patti Witte  

May 2000

Abstract

This document represents Volume 1 of a two-part study comprising the first comprehensive national review and assessment of public benefit policies and approaches being taken in states that have restructured their electric industry. This report presents a detailed state-by-state "catalog" of public benefit policies, administrative approaches, and funding levels. The material in this report is based on information obtained from each state's restructuring legislation and/or regulatory orders, supplemented where necessary by interviews with appropriate state officials.

Introduction

Since the mid-1990s, the electric utility industry in the United States has been undergoing a dramatic transformation, often referred to as "electric industry restructuring." One important aspect of this restructuring has been the issue of what to do regarding various public interest features of the traditional regulated utility system, including such services as energy efficiency, renewable energy, and programs for low-income customers.

As various states have moved forward with their restructuring legislation and/or regulatory orders, a strategy that has frequently been employed is the inclusion of some sort of "public benefits" policy requirements to address those types of societal interests. Those public benefits policies are the focus of a major research project being conducted by ACEEE, which is dedicated to providing the first comprehensive national review and early assessment of state public benefit policies under electric restructuring.

This document constitutes the first of a two-volume set of reports to be produced under that project. This report (Volume 1: A State-by-State Catalog of Policies and Actions) is intended to provide a somewhat detailed (2-4 pages per state) objective description of any policies that have been established regarding restructuring-related public benefit programs in the various states. Subsequently, Volume 2 will provide the results of a qualitative assessment of both the policy development process and the early implementation experience in those states that have enacted public benefits policies.

Purpose

The restructuring of the electric industry is an enormously complex task, and presents policymakers and regulators with a great number of difficult political and technical challenges. The premise of this research project is that those involved in developing and/or implementing restructuring policy can benefit from learning what policies and approaches have been adopted in other states. This project applies that premise to the area of "public benefits" (a.k.a., "system benefits") with the intent of providing policymakers, regulators, and other interested parties with information that will assist them in designing and implementing effective public benefits policies.

Within that context, the purpose of this report is two-fold. First, this document seeks to provide a relatively brief, yet reasonably detailed, "catalog" of state policies and actions regarding restructuring-related public benefits. Second, by informing people regarding what has happened elsewhere and what information is available, the project intends to encourage communication and information-sharing among the states. It is hoped that states can learn and benefit from each other's experiences.

Scope

This report updates two earlier studies¹ that presented the status of electric restructuring in the fifty states and the District of Columbia. This report, however, focuses specifically on the 23 states that have formally adopted electric restructuring, either through legislation or regulatory order, plus two additional states that have passed legislation to implement statewide public benefit programs without actually restructuring their electric industry. These states are:

Arizona, Arkansas, California, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Virginia, and Wisconsin.²

The table in the report presents a handy summary of the public benefits policies and funding levels for 21 of these states (i.e., those states that have enacted specific public benefits policies to date).

In reading that table, the following definitions should be applied.

SBC = System Benefits Charge

R&D = Public purpose-related research and development

EE = Energy Efficiency

LI = Low-Income

RE = Renewable Energy

Million $ = Average annual spending in millions of dollars

Mills/kWh = Amount of the SBC expressed in mills per kilowatt-hour equivalent

% Rev = Amount of the SBC funding expressed as percentage of utility annual revenues

Admin. = Entity responsible for administering the SBC funded programs

Please note that the data in Table 1 reflects available information as of the end of March 2000.

¹M. Kushler, 1998, An Updated Status Report of Public Benefit Programs in an Evolving Electric Utility Industry, American Council for an Energy-Efficient Economy; T. Ruberti, 1997, A Status Report of Public Benefit Programs in an Evolving Electric Utility Industry, New York State Energy Research and Development Authority.

²All of these states have formally adopted electric restructuring with the exception of Vermont and Wisconsin.

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87 pp., 2000, $17.00, U002