Dive Brief:
- Duke Energy Carolinas will be able to earn an 11.5% profit on the savings produced by its energy efficiency programs under a new cost recovery scheme for the utility.
- Duke can earn a $400,000 bonus if its efficiency programs save 1% more than they did in the previous year.
- State regulators approved the new cost recovery methods late last year with an eye toward simplifying the cost recovery process.
Dive Insight:
State regulators have been finding various ways to reward utilities for their investments in energy efficiency. Traditionally, utilities earn their profits based on the amount of power they sell, so there is little incentive to spend money on ways to lower sales. More money could be earned by building power plants and power lines. With the support of state regulators, this business model is fading.
