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Utility Regulation and Energy Efficiency Programs

Policies and programs that address customer end uses of energy, both electric and natural gas, are critical for achieving greater energy efficiency. The policies that underpin these programs includ…

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Policies and programs that address customer end uses of energy, both electric and natural gas, are critical for achieving greater energy efficiency. The policies that underpin these programs include utility regulation and legislation that guides state efforts to advance energy efficiency. Regulation can provide utility incentives to pursue energy efficiency and compensate a utility’s lost revenue from energy efficiency measures. State legislatures can prod utility commissions to adopt these regulations with explicit legislation. Another major policy states can adopt is the Energy Efficiency Resource Standard (EERS), which requires utilities to annually save a certain percentage of energy over a multi-year period.

The Toolkit pieces we include in this section were developed to inform stakeholders in states that are at various stages of developing their energy efficiency policies and program portfolios. Here stakeholders will find resources that run the gamut of regulatory policy as it relates to utility investment in energy efficiency, from developing foundational regulatory policy to advancing cost-effective utility-financed energy efficiency programs that aim to generate deep energy savings.

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    Note: This report was updated on July 31, 2026, to reflect data from Commonwealth Edison received after publication that showed additional spending on low-income efficiency programs. Resultant updates to the analysis yielded an increase in the overall average spending (of all utilities in the sample) on low-income programs in 2024. This increased the average share of budgets dedicated to programming for low-income populations to 14.1% and reduced the average “equity gap” to 13.8%; each change was less than 1 percentage point. ComEd-specific results were updated throughout. Additionally, the per-household savings data for Baltimore Gas and Electric was corrected, and that resulted in BGE no longer being listed in the top quartile of utilities in that category.

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