Public Benefit Funds

Public benefit funds (PBF), also frequently referred to as system benefits charge, are state-level programs developed through the electric utility restructuring process as a measure to ensure continued support for cost-effective energy efficiency and/ or renewable energy programs. Supported programs include research and development, demand-side management, and low-income energy assistance. Currently, 20 states and the District of Columbia have specific PBF legislation and/or regulatory orders. An additional six states—while not maintaining formal PBFs—allow utilities to add charges to bills to fund renewable energy and/or energy efficiency programs. Since the revenues from these charges function similarly to a PBF, states taking this approach are listed above as maintaining a quasi-PBF.

The funds are most commonly supported through a small charge on the customer utility bills (e.g., cents per kWh of electricity sales or per therm of natural gas sales) or through specified contributions from utilities (e.g., percentage of contributions from a utility’s gross operating revenue). Funding of a quasi-PBF is either embedded in rates or provided through a flat monthly fee, rather than a per-kWh charge. The charge ensures that money is available to fund renewable energy and/ or energy efficiency investments. For states that have an Energy Efficiency Resource Standard (EERS), utilities may apply PBFs to help meet energy efficiency targets. In some states, PBF funding may help utilities meet their Renewable Portfolio Standards.

Last updated in May 2017