ABSTRACT
The State Regulatory Environment State governments have significant power over shaping and sustaining the power grid. Through public service commissions (PSCs), states wield significant authority over power producers in their region. The regulatory state can create incentives for wasteful business practices or encourage companies to oppose opportunities for improved technologies. For example, electricity and natural gas suppliers earn profits through the regulated sale of metered power to homes and businesses, thus disincentivizing them from encouraging practices that would lead to usage reduction through efficiency or conservation. Decoupling sales from revenue or similar regulatory mechanisms is a mechanism to ensure a positive return on investments in generation and efficiency that overcomes this barrier of common utility rate designs in traditional and restructured market. While the focus of the Recovery Act State Energy Program was on stimulus through funding of clean energy project, commitments on both decoupling and advancements in building codes were part of the requirement for states receiving the money through governors’ assurances and a required part of the state planning process.
