In the electric sector, traditional centralized monopoly regulation is increasingly supplemented or replaced with less centralized and more participatory governance structures. Most states’ public utility commissions (PUCs) were created early in the 20^thcentury, when monopoly provision predominated; regulatory tools were largely limited to rate approval, and decision making was highly centralized. As the electricity sector has become more complex in the last few decades, the regulatory policies and structures that oversee the sector have also increased in complexity.

Across the U.S., many states are encouraging stakeholders such as environmental groups, consumer groups, industrial customers, and state energy offices to participate in electric sector regulatory proceedings, and in some cases stakeholder groups are given a formal role in guiding or implementing policy decisions. We know little, however, about how variation in this type of stakeholder participation governance structure affects actual outcomes in the electric sector. These diverse forms of governance structure are most commonly used to oversee electric utilities’ energy efficiency programs, often in conjunction with newly adopted policy instruments such as Energy Efficiency Resource Standards (EERSs). While policy analysts have begun to assess the effective of these demand-side management policy instruments, little attention has thus far been paid to the effect of different approaches to decentralized or participatory governance. Nonetheless, states are moving forward and forming energy efficiency collaboratives, oversight boards, and networks of third party energy efficiency implementers. We need more assessment of how these different approaches to decision making in the electricity sector affect outcomes in the sector.

My primary research question is: does variation in the type of governance structure affect energy savings? I measure energy savings at the utility level using data from the U.S. Energy Information Administration Form 861. To quantify states’ approaches to decision making, I examined statutes, regulations, and regulatory commission orders concerning energy efficiency between 2001 – 2011. I coded each state and year into one of four categories, based on the type of decision making process that guided utility demand side management activities in each year:

1)      No_network: there are no formal opportunities for stakeholders to participate at the regulatory level

2)      Advocacy_only: stakeholders intervene in formal demand-side management or resource planning proceedings

3)      Settlement_network: decisions about utility demand-side management goals and programs occur as part of settlement negotiations between utilities and other stakeholders

4)      Formal_network: statutes, regulations, or regulatory orders provide stakeholders with a formal role in guiding demand-side management policies

5)      Implementation_network:implementation of demand-side management programs is implemented by a third-party contractor or a network of utility, government, and other actors.

I use two models to examine the relationship between governance structure and outcomes. First, I use a two-way fixed effects model that controls for time-invariant state effects as well as differences attributable to particular years in the study. Second, I use a hierarchical linear model that allows me to examine variation within and between states. In both models, I also control for policy instruments, state characteristics, and utility characteristics that might affect energy savings.