Making Efficiency Work for Utilities
At Penn Future’s Annual Clean Energy Conference, RAP was invited to make a presentation on September 14, 2012, on the topic of “Making Efficiency Work for Utilities.” Experts across the nation are hotly debating the issue of cost recovery and incentives for utilities, with various parties advocating different points of view and State Commissions each taking their own unique direction on how to balance utility incentives to engage in energy efficiency with consideration of the cost of incentives to consumers. What is the right amount of reward to motivate utility behavior in support of energy efficiency that is also fair to consumers? This presentation addresses the three-legged stool of cost recovery necessary for successful implementation of utility provider energy efficiency. The three legs of the stool are program and administrative cost recovery, recovery of lost revenues and incentive payments. This presentation also explains and explores the various regulatory options for recovering the costs of each of the three components of the stool that are the subject of discussion in hearings and collaboratives where energy efficiency is being addressed.