Raising the Stakes for Energy Efficiency: California’s Risk/Reward Incentive Mechanism

This paper explores California’s experience with a risk/reward incentive mechanism and what it might mean for other jurisdictions. It considers which elements of the California’s design worked well; which elements did not work well (incentive design); which institutional factors contributed to the successes and shortcomings of the mechanism’s implementation (institutional factors); and, which institutional problems were caused, at least in part, by elements of the mechanism’s design (design for implementation).