5 Things We Learned from Analyzing More than 200 Utility Incentives

This fact sheet by RMI analyzes data from over 200 performance incentive mechanisms (PIMs) in the United States to identify trends in how public utility commissions (PUCs) use these tools to drive priorities such as decarbonization, equity, and affordability.

• Upside-only PIMs, where utilities can earn rewards but not penalties, are the most common design. Downside-only PIMs are rare, with only two identified in the database of 221, both related to reliability. Between 2020 and 2023, no utilities in the database incurred a PIM penalty.
• Return on equity (ROE) basis points and shared savings are the most popular incentive structures and provide the highest payouts. In 2023, utilities earned $92 million in total PIM rewards, with $58 million (63%) coming from 12 ROE-based PIMs and $27.6 million (30%) from seven shared net benefits PIMs.
• Percentage adder incentive structures have the highest success rate, with 100% of such PIMs achieved in 2023. This contrasts with ROE-based PIMs (less than 50% success), shared net benefits PIMs (just above 50%), and fixed amount-based PIMs (27%).
• Equity-focused PIMs are among the fastest-growing emergent topics, with 21 created since 2021. These are concentrated in six jurisdictions: Colorado, New York, New Jersey, Massachusetts, Illinois, and the District of Columbia. To date, 100% of equity-focused PIMs with available performance data were achieved or consistently achieved.
• Most PIMs (84%) are short-term experiments designed to sunset after two to three years. Only 4% last five years or more. Open-ended PIMs without end dates are primarily fuel cost risk sharing mechanisms (two-thirds of no-end-date PIMs), as well as some related to distributed energy resources and non-wires alternatives.

APA

RMI (2026). 5 Things We Learned from Analyzing More than 200 Utility Incentives. https://rmi.org/resources/5-things-we-learned-from-analyzing-more-than-200-utility-incentives-2/

Chicago

RMI. 5 Things We Learned from Analyzing More than 200 Utility Incentives. 2026. https://rmi.org/resources/5-things-we-learned-from-analyzing-more-than-200-utility-incentives-2/.

Wikipedia

{{cite report |author=RMI |title=5 Things We Learned from Analyzing More than 200 Utility Incentives |date=9 February 2026 |url=https://rmi.org/resources/5-things-we-learned-from-analyzing-more-than-200-utility-incentives-2/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2026things, author = {{RMI}}, title = {{5 Things We Learned from Analyzing More than 200 Utility Incentives}}, institution = {RMI}, year = {2026}, month = feb, url = {https://rmi.org/resources/5-things-we-learned-from-analyzing-more-than-200-utility-incentives-2/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }