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Electric Utility Regulatory Frameworks and Financial Incentives

Technical Support: Abt Associates

Report

October 4, 2022

Electric utility regulatory frameworks and financial incentive policies can engage utility investment in clean and distributed energy resources. The State Energy and Environment Guide to Action:  Electric Utility Regulatory Frameworks and Financial Incentives report is an EPA resource to help states pursue their climate, clean energy, and equity goals. Abt provided research and technical support to EPA on this and other chapters in the Guide to Action series.

The Electric Utility Regulatory Frameworks and Financial Incentives chapter of the Guide offers insight on the regulatory landscape for multi-year rate plans, decoupling utility revenue from sales volume, and engaging stakeholders in the development of performance-based regulation. All of these approaches can help states improve grid management and cost effectiveness, reduce peak demand, reduce air pollution, improve affordability for customers, and support economic development in the areas of renewable energy and energy efficiency.

The guide also includes state policy examples, considerations for policy design and implementation, and a summary of action steps that states have used to successfully make these regulatory changes.  Examples of actions that states use to achieve these benefits include determining what policy objectives current regulations prioritize and assessing what new objectives should be prioritized based on statutory and executive goals pertaining to air emissions, health, and equity.

Abt Associates supported these additional chapters of the EPA Guide to Action:

  • Electricity Resource Planning and Procurement 
  • Interconnection and Net Metering
  • Energy Efficiency Programs and Resource Standards
  • Customer Rates and Data Access 
  • Maximizing Grid Investments