Utility Tariff On-bill Financing: Provision and Precautions for Equitable Program Design
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- Jan 24, 2020 4:57 pm GMT
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This paper explores the benefits and risks of on-bill financing programs, so that regulators considering this tool can ensure that it supports all customers.
On-bill financing helps utilities meet resource goals by helping customers and utilities finance energy efficiency (EE) and distributed energy (DER) investments through their utility bills. In practice, the programs can be designed so that customers will experience cost savings on their monthly utility bills that exceeds their required monthly repayments.
On-bill financing can help customers reduce their energy usage, but regulators must also examine potential program risks, particularly to low income consumers, in order to ensure that programs do not negatively impact vulnerable populations. A companion piece to this Insights paper by the National Consumer Law Center (NCLC) reviews the risks inherent in programs that add charges to customer bills and suggests steps to avoid and/or mitigate the potential for consumer harm.
State commissions will play an important role in determining how to structure on-bill financing programs. Regulators will need to consider a number of issues before approving these programs, including identifying the appropriate roles for utilities and third party providers; ensuring that low and moderate income customers have access to these programs; and establishing and monitoring performance expectations and consumer protections.
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