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The essentials

  • Energy efficiency may bring benefits such as less cost to consumers, fewer future rate increases, and less environment impact for energy consumption.
  • However utilities have a disincentive to invest in energy efficiency measures that reduce sales and therefore profitability.
  • A critical step for successful energy efficiency policy is a mechanism that severs the link between utility revenue and total energy sales.
  • The Arizona Corporation Commission has pursued such “decoupling” measures in several recent rate cases.