A Strategic Framework for Utility Cost Control

Source: Cara Goldenberg, Kaja Rebane, Gennelle Wilson, Xavier Zheng | · RMI · | February 24, 2025

How to promote cost-efficiency through the energy transition.

The electric grid will require significant investments in the coming years to address a variety of system needs, including replacing aging assets, modernizing the grid and strengthening its resilience, and preparing for projected load growth. Meeting these needs while ensuring utility costs increase no more than necessary will be critical to maintaining affordability for customers.

This report examines the major drivers behind increasing utility costs in recent years. These have included increased spending on T&D infrastructure, reliance on natural gas for electricity generation, extreme weather and wildfires, and the slow adoption of new technologies. Exacerbating these challenges is the traditional electric utility regulatory framework, which creates incentives that run counter to cost control. Without thoughtful reforms, these perverse incentives will likely result in customer bills that are higher than necessary.

To address this challenge, RMI developed a strategic framework for utility cost control to clarify the range of regulatory options available to strengthen utility cost containment. The framework provides a comprehensive set of 7 strategies and 16 regulatory levers designed to help regulators, consumer advocates, and other stakeholders support utility cost-efficiency while meeting future energy demands.

Each strategy represents a different approach PUCs and other stakeholders can use to ensure ratepayers get the most bang for their bucks.