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Carrots for Utilities: Providing Financial Returns for Utility Investments in Energy Efficiency

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Sara Hayes, Steve Nadel, Martin Kushler, Dan York
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This report examines state experiences with shareholder financial incentives that encourage investor-owned utilities to provide energy efficiency programs that reduce customer energy use. It includes a discussion of the trends, successes, and challenges states have faced in the implementation of shareholder incentives. State summaries of the incentive mechanisms, common practice conclusions, and approaches across states are also provided.