State Public Utility Commissions' Powers to Advance Energy Efficiency

Improving energy efficiency is widely acknowledged as the most economical way to reduce greenhouse gas emissions and the other adverse environmental impacts of fossil use. The United States lacks a comprehensive regulatory program for energy efficiency, although often overlooked are the roles of the state public utility commissions (PUCs). PUCs have long been in charge of setting retail electricity rates and service standards. In recent years, many of them have launched programs and set policies to encourage or require the electric and gas utilities that they regulate to use energy more efficiently or to help their customers do so. This column summarizes the variety of powers and techniques of PUCs to advance energy efficiency, such as the use of energy efficiency targets, utility incentives, shared benefits, on-bill financing, and low-income programs.