Do other models of EE administrative structure eliminate conflicts of interest?
Utilities have a conflict of interest when they get to choose between their own resources and those of potential competitors. They have the additional conflict that a truly effective EE program is counter to the financial and cultural interests of the utility.This issue has long been recognized. The Commission tried a number of ways to mitigate the problem, before it saw the option of third party programs. These included very large shareholder incentives, (very small) penalties, lost revenue recoveries, stricter oversight, Commission control of EM&V, etc. However, the Commission, beginning in 1997 (D.97-02-014) started to reject such devices as cumbersome and undesirable. D.99-03-056 stated that continuing evaluation of the incentive levels and performance basis require “an enormous commitment of time and resources”. In the meantime, to reduce the potential conflicts between the utilities’ role in the newly competitive energy services industry and their continued role as interim progra
Utilities have a conflict of interest when they get to choose between their own resources and those of potential competitors. They have the additional conflict that a truly effective EE program is counter to the financial and cultural interests of the utility. This issue has long been recognized. The Commission tried a number of ways to mitigate the problem, before it saw the option of third party programs. These included very large shareholder incentives, (very small) penalties, lost revenue recoveries, stricter oversight, Commission control of EM&V, etc. However, the Commission, beginning in 1997 (D.97-02-014) started to reject such devices as cumbersome and undesirable. D.99-03-056 stated that continuing evaluation of the incentive levels and performance basis require “an enormous commitment of time and resources”. In the meantime, to reduce the potential conflicts between the utilities’ role in the newly competitive energy services industry and their continued role as interim progr
