This paper examines three cases where cost-of-service regulation (COSR) clearly motivates utilities to pursue sub-optimal outcomes compared to an alternative regulatory strategy. We find COSR often creates utility incentives that misalign with societal value, and improvement to the existing regulatory model holds immense potential to create value for customers and society.
California’s cap-and-trade program should be viewed as part of the state’s comprehensive package of climate policies. Yes, greater legal certainty will help, but keep in mind high carbon prices aren’t a goal of California’s climate policy. The goals are emission reductions, efficiency, consumer protection, and growing businesses set to compete in the 21st century economy.
Texas’ decision for an energy-only market design with an operational reserve demand curve has likely saved Texas consumers billions, as well as improving reliability, providing evidence of an energy transition driven by load reductions, significant increases in renewable generation, and…
High carbon prices aren’t a goal of the system. The goals are emission reductions, efficiency, consumer protection and growing businesses set to compete in the 21st-century economy. California’s climate policy is succeeding, thanks in part to cap and trade.
The Paris Agreement on climate change set the world on track to avoid catastrophe. Or did it? More than 180 nations have committed to reducing carbon dioxide emissions, but now we need to see whether these commitments are real. On June 1-2 in San Francisco, energy ministers from the world’s 24 largest-emitting nations will report on their progress and plans.
In zero draft form, theUN’s New Urban Agenda outlines a fantastic vision for cities. It speaks of inclusion, equality, transit-oriented development and safety. But how do we get there? What does a “blueprint of the city” actually look like? We see three steps to policymaking that ensures any policy is implementable.
It’s easy to assume our transition from coal to natural gas is the biggest contributor to our decline in carbon dioxide emissions. However, significant evidence shows the acceleration of renewable energy and energy efficiency has contributed far more than natural gas.
By comparing electricity rates instead of bills, many inaccurately believe higher levels of renewables make electricity costlier. Outdated data or conservative cost assumptions for energy sources also tarnish renewable energy’s reputation as a cost-effective option.
While it is true that overgeneration of renewable energy can cause reliability problems, curtailment (shutting off excess generation) is often unnecessary and expensive. When examining renewables generation, it’s important to consider variability across multiple regions.
Does a solution to San Francisco’s housing affordability and transportation challenges already exist 6,000 miles away? A policy innovation already working in Brazil could increase our housing supply while generating billions for public transit investment.