States Find New Ways to Encourage Energy Efficiency
In Minnesota, early evidence suggests the state’s recently revamped incentives are working. Xcel Energy helped its customers conserve about 416 gigawatt hours of electricity last year — more than any other year in the company’s history. Under the new incentive structure, the utility will be rewarded about 14 percent of the net benefit of those energy savings, which totaled approximately $291 million. That’s about $40 million in new revenue for the company’s shareholders.
When I talk about the Next Generation Energy Act in Minnesota, which requires utilities to reduce their energy sales by 1.5% a year, people often ask me if their own energy saving actions would be made moot by utilities raising prices to match this reduction in sales. Luckily, utilities get incentives for offering us incentives to save energy!