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Utility and customer incentive alignment

Leveling the playing field and allowing and rewarding innovation can expand options, promote fair competition, and make the industry’s transition efficient and profitable. System operation and planning need wider regional cooperation and larger, faster markets.

Creating the new electricity system also needs more R&D, more dialogue between sectors, and more pilot projects demonstrating fast-moving techniques for distributed resource integration, distributed intelligence, and grid architectures.

Map of utilities with decoupling for electric utilities

To help encourage utilities to pursue efficiency while staying financial healthy, many regulators have changed how utilities get paid for saving energy. More than half of states have some type of cost recovery in place. Perhaps the most effective mechanism has been decoupling, which breaks the link between earnings and total energy sold, and is often combined with shared savings that fully align utility with customer incentives.