Fat or Skinny?
Ren Orans, Fredrich Kahrl, Dan Aas
Debates over utility business and regulatory models have sidestepped a fundamental question: What do state legislators and regulators want the electricity utility of the future to do? Do they want "fat" utilities that play a larger role in implementing public policy and delivering energy services to customers? Or "skinny" utilities that are more narrowly focused on the ownership and upkeep of the grid?
Competitive Market Will Take Care of Next Burning Issue
I do not understand why we are still distracted by Net Energy Metering (NEM). It worked well when we had not-so-smart meters and were trying to encourage rooftop solar penetration. People in general and students of regulation in particular are left confused and can easily find some support for both sides. This results in conflicts and proposed compromises that keep the debate going at full tilt. Two things are missing or mostly overlooked in all this regulatory discourse.
Hidden Costs of Externalities
We continue to rush towards a renewable future without considering overall system design, the costs that various renewable scenarios impose on grid operation, and the operation of the grid with these scenarios. When the externalities of climate change and ocean acidification create an overwhelming mandate to move away from fossil fuels, we have no choice but to go forward. Shouldn't we try to pick the cheapest path?
We talked with NARUC President, Commissioner Rob Powelson
Commissioner Rob Powelson, with Steve Mitnick
Commissioner Powelson was installed as the 128th president of NARUC in November 2016.
Leonard Hyman and William Tilles
Adam Smith's first book, “The Theory of Moral Sentiments,” argued that people acted not just for money, but also out of professional pride, fairness, patriotism, altruism and other non-economic reasons. Maybe the time has come to revisit Adam Smith and his important first book.
Offer end uses as the product, and not therms or watts. The utility becomes a true energy service company.
Customers and Utilities Benefit
In the U.S., electric utilities are the major supporter of MRPs. In other countries, the government has been a major proponent. Countries such as Australia, Canada and Great Britain have relied heavily on MRPs, often citing the deficiencies of traditional rate-of-return ratemaking.
Fairness Is In the Eye of the Beholder
Fairness has conflicting meanings for customers, utilities, power generators, DER providers, and others. Regulators and policymakers must understand their goal should not be the perfect rate design; it doesn't exist.
Many Voters Unaware of Costs
The typical solar customer in Southern California could recover their investment in seven years. After which, the facility would provide essentially free electricity for at least 18 more years. If this sounds too good to be true, it is. Those generous returns are paid for by federal taxpayers and California residential customers that lack rooftop solar.
Where is it Most Relevant Today?
The 14 states with highest DER adoption levels represent 40% of the total market for electricity; four states have annual revenues of more than $15 billion.