An Adaptive Approach to Promote System Optimization

This paper was selected as one of three papers to be featured at the Solar Electric Power Association’s (SEPA) 51st State Summit on April 27, 2015 in San Diego in conjunction with its 2015 Utility Solar Conference. The 51st State Initiative asked authors to re-imagine our energy future in a hypothetical 51st State with no existing regulations or market structures.  Rather than focusing on specific policy recommendations, the paper returns to first principles of rate design and market structure that can guide regulatory policy in any state, no matter the constituency, resource availability, or regional market structure.

In response to interest at the Utility Solar Conference, Mike O’Boyle prepared an addendum to the 51st State concept paper – Who Should Own and Operate Distributed Energy Resources? This short paper presents a series of case studies seeking to draw experience from different ways of tackling the same problem: how to integrate cost-effective distributed technologies that have run into outdated regulatory models. By reviewing utility-owned and operated DERs, third party-operated DERs, and customer-operated DERs, this paper identifies strengths and weaknesses in each approach.