One Climate Solution for Utilities

The more efficient use of energy remains one of the central strategies for reducing greenhouse gas emissions. Until recent, the subject has not been exciting enough to get the kind of media attention that alternative energy generation technologies, like solar, receive. But because of the urgent need to reduce greenhouse gas emissions, we all will ultimately have to become expert on both cleaner energy supply and energy efficiency.

A recent report highlights state regulatory mechanisms that encourage utilities to pursue customer energy efficiency programs by providing the types of financial incentives that make “cents” for the utilities. An American Council for an Energy-Efficient Economy (ACEEE) report provides a lay person’s guide to regulatory reform for energy efficiency in the utility industry. It explains industry jargon such as “lost revenues”, “demand side management programs”, “decoupling” and “shareholder incentives,” as well as detailed information on which states are offering incentives for energy efficiency programs.

The report is worth a look because more than a third of this country’s dioxide emissions (the primary human-generated greenhouse gas) come from the generation of electricity. Therefore, getting the electric utility industry to accelerate energy efficiency programs into their markets is critical to reducing greenhouse gas emissions. Providing financial incentives that place energy efficiency programs on an equal revenue stream with traditional generation revenue allowances is a signal that gives senior level utility managers a reason to cut greenhouse gas emissions without harming the overall financial health and viability of the company.