U.S. utilities face significant financial disincentives under traditional regulation in aggressively pursuing cost-effective energy efficiency. Regulators are considering some combination of mandated goals and alternative utility business model components to align the utility’s business and financial interests with state and federal energy efficiency public policy goals. We analyze the financial impacts of an Energy Efficiency Resource Standard on an Arizona electric utility using a pro-forma utility financial model, including impacts on utility earnings, ROE, customer bills and rates. We demonstrate how a viable business model can be designed to improve the business case while retaining sizable benefits for utility customers.
BT - Utilities Policy DA - 12/2011 DO - https://doi.org/10.1016/j.jup.2011.07.004 IS - 4 LA - eng N2 -U.S. utilities face significant financial disincentives under traditional regulation in aggressively pursuing cost-effective energy efficiency. Regulators are considering some combination of mandated goals and alternative utility business model components to align the utility’s business and financial interests with state and federal energy efficiency public policy goals. We analyze the financial impacts of an Energy Efficiency Resource Standard on an Arizona electric utility using a pro-forma utility financial model, including impacts on utility earnings, ROE, customer bills and rates. We demonstrate how a viable business model can be designed to improve the business case while retaining sizable benefits for utility customers.
PY - 2011 SP - 218 EP - 225 T2 - Utilities Policy TI - Carrots and sticks: A comprehensive business model for the successful achievement of energy efficiency resource standards UR - https://www.sciencedirect.com/science/article/abs/pii/S0957178711000531 VL - 19 ER -