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Quantitative Financial Analysis of Alternative Energy Efficiency Shareholder Incentive Mechanisms

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Peter Cappers, Charles Goldman, Michele Chait, George Edgar, Jeff Schlegel, Wayne Shirley
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Using a prototypical U.S. southwest utility and a publicly available financial model, this study shows how various stakeholders (e.g., shareholders, ratepayers) are affected by these different types of shareholder incentive mechanisms under varying assumptions about program portfolios. This quantitative analysis compares the financial consequences associated with a wide range of alternative incentive structures. The results will help regulators and policymakers better understand the financial implications of demand-side response (DSR) incentive programs.