It doesn't take a financial expert to realize that utility providers stand to lose money when power users use less energy regularly. However, with energy efficiency becoming increasingly popular among investors and companies of all sizes, utility providers have every reason to encourage efficient energy solutions, except one that is instead of saving money through energy-efficient design like everyone else, utility providers will lose money in proportion to what others save.
Long seen by eco-conscious legislators and energy efficiency companies as the ultimate barrier to large-scale energy efficiency, utility provider's financial interest has proven resistant to the call for efficient energy solutions that is, until the implementation of revenue decoupling.
Used by utility providers nationwide, revenue decoupling allows utility providers to restructure their rates to avoid losing money when their customers use less energy. Instead of basing energy rates on usage, under revenue decoupling, utilities adjust their rates to meet revenue targets set by utility regulators, eliminating lost revenue due to fluctuating energy use.
Although the practice's initial beneficiaries are utilities, its final beneficiaries are power users and the environment. With rate decoupling in place, utilities participate in state campaigns to curb energy use by a certain percentage in the near future-a plan made possible by utilities teaming up with energy efficiency companies in the form of utility demand-side management programs, where energy efficiency companies handle the implementation of efficient design in a geographic area.