States adopt decoupling plans to encourage energy efficiency
It’s a scheme that turns the traditional business model on its head: power companies can make more money by selling less power. Under “decoupling” plans, state regulators give incentive payments to electric utilities that encourage energy efficiency by their customers. “Before there was almost a disincentive to go hard at efficiency because we weren’t recovering our fixed costs” such as plants and equipment, says a rep for Idaho Power. “Now the anticipation is that we will recover our fixed cost.” Decoupling plans also reduce the need for costly new power plants — a boon for both utilities and the planet. California has been decoupling utility profits from energy production for 25 years; Idaho, New York, Connecticut, and Vermont all adopted plans this year, and at least nine more states have made proposals. Half of U.S. states have adopted or are considering similar plans for natural-gas utilities. And why not? It’s a win-win-win: customers save money, utilities get money, and the planet gets a break.