How Pay As You Save® Works

The Pay As You Save® system uses the regulated utility system to deliver on its promise and allow all customers to invest in resource efficiency by tapping the flow of resource efficiency savings. The regulated utility system regularly commits future customers at a meter location to pay for prior investments in distribution and supply as well as bad debt resulting from some

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customers not paying all of their bills. With disconnection for nonpayment, the regulated utility system has the lowest bad debt rate of any financing system: less than 1% for many utilities. Low bad debt rates backed by the assurance that any missed payments will be covered by future rate payers ensures investors that their capital is safe. The Pay As You Save® system also includes sufficient consumer assurances to create a program offer that is too good for customers to turn down – even though participants agree to pay 100% of the measure costs for the most cost effective measures, making rebates unnecessary. Customers can install measures in their homes and businesses with confidence because of independent certification that measures are appropriate and will provide net savings right away. Additionally, customers have: • No upfront payment; • No credit checks, liens or hassles (e.g., dealing with a bank); • No new debt obligation (the obligation to pay is assigned to the location not an individual); • No obligation to pay if they don’t personally benefit (e.g., if a customer relocates, their payment obligation stops; if a measure fails or breaks down, it is repaired or the payment obligation stops; if repaired, the payment amount stays the same, only the term is extended); and • No barriers to participation for landlords or tenants; tenants only pay lower utility bills while they occupy the premises; landlords who don’t pay for utilities bills pay nothing. The risk-free offer is the reason resource efficiency and renewable energy programs based on the Pay As You Save® system have attracted unprecedented acceptance in New Hampshire, Kansas, Kentucky, Hawaii, and California.