America’s electricity market operators are increasingly looking for ways to make their systems more flexible as more renewables, flexible demand resources, and energy storage come online. This report outlines which types of flexibility are needed for grid reliability, offers advice on how markets can ensure sufficient flexibility, and will help identify ways to manage the grid with a rapidly evolving mix of resources.
Electric Power Sector
A presentation on the future of U.S. wholesale markets, three potential outcome, and related implications for retail power markets from Energy Innovation Vice President Sonia Aggawal.
The Northeastern U.S. is simultaneously home to the most ambitious regional renewable energy goals and the most constrained lands in the U.S. This paper builds upon past work on siting policy to examine siting solutions tailored to meeting renewable energy demand in a land-constrained region. Along with creative new approaches to renewables siting, the paper examines four approaches to reduce the need for land-intensive utility-scale renewables.
The prospect of large grid modernization investment triggers a key question – is it worth it? As different states consider upfront investments in modernizing the grid, regulators need ways to ensure utilities maximize the potential benefits of grid modernization. This white paper provides program design considerations and metrics that can guide utility investment and increase the chances that customers get the most out of grid modernization efforts. A version of the paper was also published in Electricity Policy, and can be found here.
This paper explores which regulatory models align utility profit with societal value under scenarios in which traditional, utility-owned solutions may not be optimal for customers. The cases in this paper offer insight into whether and how cost-of-service regulation and its alternatives (performance incentive mechanisms and revenue caps) can align utility shareholder values with societal values.
The grid will require a substantial transformation as more renewable sources come online. Some critics argue technological, financial, and institutional barriers will prevent significant decarbonization of the power sector, but four common clean energy myths are easily debunked by facts and real-world experiences showing the feasibility of a low-carbon energy future.
New York Public Service Commission (NYPSC) released a new order as part of its Reforming the Energy Vision, which includes ambitious language on performance-based compensation and improved rate design. Specifically, the NYPSC adopts an outcome-based approach to measuring performance, focusing on peak demand reduction and energy efficiency as key metrics to tie to revenue in the short term.
This review offers a comprehensive meta-analysis of utility programs and industry research on time-based and demand charge rates. The research identifies key design decisions and their effect on outcomes such as peak reduction, total load reduction, and customer acceptance. The review provides detailed and broad empirical evidence to guide conversations as different regulators consider changes to net energy metering or other peak reduction programs.
Utility Regulatory and Business Model Reforms for Addressing the Financial Impacts of Distributed Solar on Utilities
This study highlights some of the challenges and opportunities for the distributed solar PV (DPV) market arising from recent rate reform efforts, particularly demand charges and fixed charges. For example, it finds that immediate elimination of net energy metering (NEM) in all states could reduce residential DPV deployment 30 percent by 2050, while universal availability of NEM would increase residential deployment by roughtly 40 percent.
Performance-based regulation shifts utility focus away from capital investment and sales volume, putting focus instead on delivering value for customers—in the form of an affordable, reliable, and clean power system. Performance-based regulation has been gaining momentum in several states. To support those states and others considering this regulatory change, we have produced several papers and briefs that offer perspective on more of the details of performance-based regulation.