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and energy service providers. The expectation is Model, customers do not incur debt, as the source
that the IUS model will consist of variations that of financing for the technology offerings typically
are linked to (and suitably capture) the goals and come from the utility or an external capital partner
internal capacity of utilities and the regulatory (public financing), therefore significantly
structure within which they operate. expanding the potential customer base of
For instance, IUS Models on the Regulated Side the utility as well as the level of participation of
of the business, such as an On-Bill Tariff (OBT) customers in accessing RE/EE services.
structure, can service multiple sectors. When
utility capital, whether debt or equity, is used to • Energy Services Charge (ESC): This new Model of
finance these projects, they are able to scale much IUS is considered a new utility revenue model
more broadly than with public or grant funding. rather than a financing model. In this Model, the
With this type of structure, the utility should be utility deploys its capital to run the program and
able to earn a regulated rate of return on invested owns as well as operates the distributed energy
capital. Additionally, customers are not required resource (DER). The customer is charged an ESC
to take on debt and should see immediate bill for the services offered. The customer, therefore,
savings. On this basis, a tariff can be attached benefits from the energy service/technology
to the meter of the premises serviced under the solutions and the ESC is tied to the electric power
Model and should be passed on to the customer meter or physical property. This allows for the
until the investment is paid off. possibility of transferring the service to the next
With the IUS structure, the utility can utilise property owner or tenant.
third-party service providers and technology
companies as implementation partners. • On-Bill Financing (OBF): The OBF is also known
Alternately, the utility can also structure an Energy as an on-bill loans mechanism, that, unlike the ESC
Service business as a subsidiary that operates or OBT, is tied to an individual or entity rather than
“outside” of the regulated business. Regardless the property or meter. The OBF is set at an interest
of the variant used, the basis for the Model would rate set by the funding source, which is usually public
be an energy service contract between customer financing or rate-payer funds. The customer’s credit
and utility. is screened, and a lengthy application process for
approval is involved. As a result of the loan financing
OK, BUT HOW? mechanism, the customer does incur debt, and the
In general, the IUS model is considered a “delivery loan is typically non-transferrable.
mechanism” or “implementation mechanism”
for demand-side RE and EE projects, as well as • Metered EE Transaction Structure (MEETS): The
a new or additional business model for utilities MEETS structure is designed to fracture the barriers
in a rapidly changing environment. In effect, it to deep energy retrofits, specifically targeting the
provides a structured framework to coordinate commercial sector. The yield from the metered EE at
and deliver a suite of energy services, using the the customer’s facility is delivered to the utility rather
utility as a vehicle or the “glue” to coordinate all than the customer’s facility, and the utility bills the
key players and stakeholders necessary for the facility for the metered yield.
successful implementation of RE and EE projects.
• Energy Services Business (B2B): This Model is an
Generally, five types of IUS models are used to unregulated IUS model and therefore sits outside of
facilitate the deployment of behind the meter the regulated side of the utility’s business. Products
EE and RE solutions. According to Bleyl et al. and services are provided directly to the customer,
(2017), these models inlude: and the financing and repayment mechanism is
determined through standard contracts with the
• On-Bill Tariff (OBT) model: The OBT is a voluntary customer. This Model has typically been used to offer
and customised financing mechanism based products and services to commercial and industrial
on the customer’s technology of choice tied to customers but can also be extended to residential
a physical property or electric power meter. In this customers.

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