Guiding Principles in Action
Performance-based utility programs are utility energy efficiency programs that deliver energy savings and/or demand flexibility by providing incentives for measured and verified energy and/or demand reductions over a specified time period.
Customer-focused utility programs need to be streamlined and designed to provide equitable access to services. Programs also should be designed to meet the specific needs of different customer segments — e.g. enabling aggregation for smaller energy users and driving deeper savings and demand flexibility for larger energy users. The initiatives and programs highlighted in this section demonstrate how a stronger focus on customer needs can lead to improved energy performance and demand flexibility outcomes.
Demand management is key to greater decarbonization. Both will require an all-of-the-above approach to energy management, including traditional energy efficiency improvements as well as beneficial electrification and integration of distributed renewable energy sources and storage. Adopting program frameworks that focus on decarbonization can help decision-makers integrate these objectives and reduce complexity for customers. The market frameworks and emissions targets highlighted in this section show how to set the stage for performance-based outcomes.
Determining the value of energy efficiency and demand flexibility is critical for assessing cost-effectiveness, ensuring policy support, and designing appropriate program incentives and compensation. Standardized methodologies will help meet these needs for valuation. The frameworks highlighted in this section are forging a path toward improved valuation of energy efficiency and demand flexibility, which can inform the metrics used to design and implement performance-based utility programs.
Collaboration among regulators, legislators, and other decision-makers can create favorable market conditions for performance-based utility programs. With access to energy data and actionable insights, both customers and aggregators can harness these market conditions to achieve deep retrofits and improve demand flexibility. The programs and tools highlighted in this section provide examples of features that performance-based programs can adopt to stimulate market demand.