Electric industry restructuring requires state regulators and legislators to re-examine the purposes served by and the continuing need for ratepayer-funded energy-efficiency programs, as well as the mechanisms to collect funds for these programs and the institutions appropriate to administer them. This paper offers background to these issues and a series of recommendations based on analysis of recent state experiences. Our recommendations are summarized.

Many states have implemented ratepayer-funded programs to acquire energy efficiency as a predictable and reliable resource for meeting existing and future energy demand. These programs have become a fixture in many U.S. electricity and natural gas markets as they help postpone or eliminate the need for expensive generation and transmission investments. Industrial energy efficiency (IEE) is an energy efficiency resource that is not only a low cost option for many of these efficiency programs, but offers productivity and competitive benefits to manufacturers as it reduces their energy costs. However, some industrial customers are less enthusiastic about participating in these programs. IEE ratepayer programs suffer low participation by industries across many states today despite a continual increase in energy efficiency program spending across all types of customers, and significant energy efficiency funds can often go unused for industrial customers. This paper provides four detailed case studies of companies that benefited from participation in their utility's energy efficiency program offerings and highlights the business value brought to them by participation in these programs. The paper is designed both for rate-payer efficiency program administrators interested in improving the attractiveness and effectiveness of industrial efficiency programs for their industrial customers and for industrial customers interested in maximizing the value of participating in efficiency programs.

"Broadly stated, the purpose of this project is to provide a comprehensive assessment of the current "state of the practice" of utility-sector energy efficiency program evaluation across the 50 states and the District of Columbia. Toward that end, we have conducted a detailed survey of all states with active utility ratepayer-funded energy efficiency programs in order to establish an up-to-date database on how each state is handling various aspects of energy program evaluation and the reporting of results"--Page 2.

Electric and natural gas energy efficiency in the United States is pursued through a diverse mix of policies and programmatic efforts, which support and supplement private investments by individuals and businesses. These efforts include federal and state minimum efficiency standards for electric and gas end-use products; state building energy codes; a national efficiency labelling program (ENERGY STAR®); tax credits; and a broad array of largely incentive-based programs for consumers, funded primarily by electric and natural gas utility customers. This book provides information on projected spending and savings of the future of utility customer-funded energy efficiency programs in the United States; and discusses the shifting landscape of ratepayer-funded energy efficiency in the United States.

Collaboratives for energy efficiency have a long and successful history and are currently used, in some form, in more than half of the states. Historically, many state utility commissions have used some form of collaborative group process to resolve complex issues that emerge during a rate proceeding. Rather than debate the issues through the formality of a commission proceeding, disagreeing parties are sent to discuss issues in a less-formal setting and bring back resolutions to the commission. Energy efficiency collaboratives take this concept and apply it specifically to energy efficiency programs--often in anticipation of future issues as opposed to reacting to a present disagreement. Energy efficiency collaboratives can operate long term and can address the full suite of issues associated with designing, implementing, and improving energy efficiency programs. Collaboratives can be useful to gather stakeholder input on changing program budgets and program changes in response to performance or market shifts, as well as to provide continuity while regulators come and go, identify additional energy efficiency opportunities and innovations, assess the role of energy efficiency in new regulatory contexts, and draw on lessons learned and best practices from a diverse group. Details about specific collaboratives in the United States are in the appendix to this guide. Collectively, they demonstrate the value of collaborative stakeholder processes in producing successful energy efficiency programs.

"Broadly stated, the purpose of this project is to provide a comprehensive assessment of the current "state of the practice" of utility-sector energy efficiency program evaluation across the 50 states and the District of Columbia. Toward that end, we have conducted a detailed survey of all states with active utility ratepayer-funded energy efficiency programs in order to establish an up-to-date database on how each state is handling various aspects of energy program evaluation and the reporting of results"--P. 2.