A Smarter Approach to Cost Trackers to Support Affordability

This report by RMI examines the use of cost tracker mechanisms by investor-owned utilities in the United States, arguing that their overutilization can weaken cost-containment incentives and increase energy burdens for households. It proposes a four-pronged regulatory strategy to help regulators manage these mechanisms, improve transparency, and align utility spending with customer needs.

• Utility expenditures in the United States are rising due to aging infrastructure, grid resilience improvements, and accelerating load growth, which coincides with an increasing number of households struggling to pay energy bills.
• Cost tracker mechanisms allow investor-owned utilities to recover costs quickly outside of general rate cases; however, when used too broadly—particularly for capital expenditures—they can increase energy burdens, exacerbate capex bias, and reduce the incentive for utilities to control costs.
• RMI recommends that utility regulators evaluate the rationale for using trackers, retire unnecessary ones, consolidate cost categories back into base rates, and implement a four-pronged regulatory strategy to improve transparency and strengthen cost reviews.

APA

RMI (2026). A Smarter Approach to Cost Trackers to Support Affordability. https://rmi.org/resources/cost-trackers-to-support-affordability/

Chicago

RMI. A Smarter Approach to Cost Trackers to Support Affordability. 2026. https://rmi.org/resources/cost-trackers-to-support-affordability/.

Wikipedia

{{cite report |author=RMI |title=A Smarter Approach to Cost Trackers to Support Affordability |date=19 March 2026 |url=https://rmi.org/resources/cost-trackers-to-support-affordability/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2026smarter, author = {{RMI}}, title = {{A Smarter Approach to Cost Trackers to Support Affordability}}, institution = {RMI}, year = {2026}, month = mar, url = {https://rmi.org/resources/cost-trackers-to-support-affordability/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }