Electric utilities historically have funded system benefit programs to encourage more efficient energy use, assist low-income families with home weatherization and energy bill payment, promote the development of renewable energy sources, and undertake R&D. Experience with utility energy efficiency programs shows that the value of energy bill savings for households and businesses have been about double the costs to produce these savings. Unfortunately, over the past 5 years, increasing competition and restructuring have led utilities to cut energy efficiency and peak load reduction by more than 50%. In order to ensure that energy efficiency programs and other system benefit activities continue following restructuring, 15 states have established system benefit funds through a small charge on all kilowatt-hours flowing through the transmission and distribution grid. We recommend the establishment of such programs by other states and also the creation of a national systems benefit trust fund that would provide matching funds to states for eligible public benefit expenditures. Specifically, we recommend a non-bypassable wires charge of two-tenths of a cent per kilowatt-hour. This policy allows states and utilities to expand their energy efficiency programs and other public benefit activities.

Important Resources and Links

• Public Benefits Funds Fact Sheet (pdf)Energy Efficiency Performance Standard Fact SheetPreserving Public Benefits (mini-report)
• DOE's System Benefits Charges information

For more information contact:
Martin Kushler, Director, Utilities Program

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