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LESSONS FOR DESIGNING COUNTERFACTUALS IN PERFORMANCE INCENTIVE MECHANISMS: CALIFORNIA AS A CASE STUDY
This case study examines the California Risk-Reward Incentive Mechanism (RRIM), an energy efficiency shareholder incentive program, to identify challenges associated with using counterfactuals to vet utility savings claims. The document highlights how measure-by-measure estimation of savings leads to regulatory conflict, high administrative costs, and volatile incentive payments, ultimately recommending a shift toward outcome-oriented metrics.
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Document type: Case study
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