Energy Efficiency Resource Standards

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Energy Efficiency Resource Standards ( energy-efficiency-resource-standards )

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Section 9. Buyout Option. (A) In lieu of achieving actual savings to comply with the applicable performance standard under Section 2, a retail electric distribution or natural gas utility may pay each year to the [[energy efficiency fund]] created [[in Section 11]] by not later than a time determined by the Commission a buyout fee in an amount equal to, as adjusted for inflation in accordance with such regulations as the Commission may promulgate: (1) $0.08 per kWh otherwise required to be procured that year through energy efficiency measures by the retail electric distribution utility; or (2) $0.80 per therm otherwise required to be procured that year through energy efficiency measures by the natural gas utility. (B) Utility costs under this section shall be recoverable under the method identified in Section 7(A)(1). (C) If a utility chooses to exercise its option under paragraph (A) it shall be ineligible for any financial incentives such as those created under Sections 7 or 8. Although a buyout option is not a common feature of existing state EERSes ACEEE recommends including it as a means of giving market players the flexibility of having a fall-back plan. Should a utility be incapable or unwilling to implement the necessary energy efficiency programs to achieve the performance standard, they can instead pay a predetermined amount per kWh or therm into an energy efficiency fund administered by the state. The energy efficiency fund will support in-state energy efficiency programs in lieu of programs administered by the utility. See Section 11 for more information. It is important to note that the cost of the buyout option must be greater than the actual cost of energy efficiency, as an incentive to implement programs rather than choosing this approach. 20

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