Dive Brief:

• The popularity of energy efficiency programs is at an all-time high, but the financial disincentives for utilities investing in them remain. Unless these disincentives are addressed, utility investments in customer energy efficiency programs work against their shareholders’ interests, according to a new report from the American Council for an Energy-Efficient Economy (ACEEE).
• The report that says policy solutions in several states have shown that decoupling revenues from energy sales addresses one of the biggest barriers to wider acceptance of efficiency programs.
• The study says that well-designed programs combined with a comprehensive set of policies do not negatively affect shareholder value.

Dive Insight:

The shareholders are only one piece of the puzzle. When the business model is predicated on volume sales, then what incentives exist for lowering output of the product? That’s the dilemma utilities face in states where decoupling is held in low esteem. Ultimately, decoupling doesn't incentivize efficiency programs -- it simply doesn't disincentivize them. Rate loss recovery mechanisms seem like a better option here as they do, in fact, incentivize utilities to participate in energy efficiency.