Case Study: Policy Pathways to Meter-Based Pay for Performance

September 3, 2019

Are you considering pay-for-performance and metered efficiency?  Curious how it’s working in early pilots and what lessons you can learn? 

This new report, written by policy experts from Recurve, Energy Trust of Oregon and NYSERDA, summarizes the specific pathways of regulatory and market reform, legislation, and executive order that California, New York and Oregon have followed as means for adoption pay-for-performance efficiency. Comparing the similarities and differences of these pathways offers insights for other states and jurisdictions considering such a transition. In addition, the report examines how the execution of these policies has led to differences in the rules and guidelines adopted in each state. 

The pathways are reviewed in three general categories. The “Market Focus” represents a significant transition to meter-based procurements with large program budgets and authorization to scale enabled through regulatory and market reform. The “Scaled Pilots” path begins with a small scale effort that is proposed and tested and then allowed to expand to greater procurements, enabled through legislation that redefines energy savings. The “Focus on Existing Contractors and Vendors” path relies on the past performance and program designs of existing contractors to form the basis of an incremental launch into pay for performance, enabled through executive order.

We also share some of the early lessons that are emerging from each jurisdiction’s experience and key issues to monitor into the future. The experience of these three states helps illustrate the opportunities and challenges of each particular pathway. Understanding these differences and relevance to particular situations will help others as they consider similar transitions.

This paper was originally presented at IEPEC 2019. Read it below:

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