Snapshot of Energy Efficiency Performance Incentives for Electric Utilities

Performance incentive mechanisms (PIMs) can help make energy efficiency competitive with traditional utility infrastructure investments. This brief surveys current state approaches to PIMs and highlights two emerging trends in incentive design: multifactor incentives, and the growing use of return on equity and innovative cost recovery mechanisms. For the former we profile programs in Massachusetts, Rhode Island, Hawaii, Michigan, and New York; for the latter, Maryland, New Jersey, Utah, and Illinois.