Today is Monday, 18th November 2024

MA: State Considers Efficiency Incentives – Business Groups Oppose

State regulators are drafting a new rate plan to guarantee that utilities won’t lose money if their customers use less electricity.This framework, known as revenue decoupling, aims to revamp rate structures, which environmentalists and utilities say pose barriers to energy efficiency and lower consumption. Currently, utilities make more money by delivering more electricity, giving them little incentive to promote efficiency measures that reduce sales.

Decoupling aims to break the connection between sales and revenue, typically by fixing per-customer delivery charges, which are now adjusted regularly to compensate for changes in sales volumes. Freed from the need to increase sales, utilities can pursue efficiency measures to help customers use less energy and save money, decoupling supporters say.

But Massachusetts businesses, saddled with some of the highest energy costs in the nation, oppose decoupling. They argue it insulates utilities from market forces, eliminating incentives to operate efficiently and lower costs. Greg Vasil, chief executive of the Greater Boston Real Estate Board, likened decoupling to “getting rent on a vacant apartment.”

“They are getting money for simply saying, ‘We like conservation,’ ” he said. “You just don’t give them money when it’s not clear they operate efficiently

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