Regulatory formulas for rewarding efficiency investments.
Richard G. Stevie is vice president of forecasting at Integral Analytics, and Raiford L. Smith is director, smart grid emerging technology at Duke Energy.
How do energy efficiency regulatory mechanisms work? What do they have in common? How do they differ?
While shared savings, percent of program costs, and percent of avoided costs have been adopted by utility commissions in one form or another across the country, differences in structure affect their desirability for encouraging utilities to invest in energy efficiency.
What’s the desired level of energy efficiency investment? Can an economically preferred level of energy efficiency be achieved? Or will it always be out of reach?