cost recovery

This week, I dive into something I have wanted to know more about for some time: efficiency program funding mechanisms.  This post is based on a recent paper released by ACEEE, Valuing Efficiency: A Review of Lost Revenue Adjustment Mechanisms. Utilities must be allowed to make enough money to draw required investor capital, debt and equity, to fund their operations.  Energy efficiency programs are funded by ratepayers, one way or another – not out of shareholder charity.  All states with programs have some sort of transparent, although usually incomprehensibly confusing, means for cost recovery or lost revenue recovery. Although the ACEEE…