The transition to distributed generation calls for a new regulatory model.
Robert E. Curry Jr. was a commissioner on the New York State Public Service Commission from 2006 through 2012. Since 2010 he has been a member of DOE’s Electricity Advisory Committee, and was vice chair of the DOE-NARUC LNG Partnership. Previously he was a law firm partner, and senior vice president and general counsel at Covanta Holding Corp.
The only rule universally observed in the electric power industry is the law of unintended consequences. There are so many different entities with an interest in, and in some cases control over, the power sector that it’s often difficult to align policy with practicality. In the case of technological developments in distributed generation and net metering, a new regulatory scheme will be necessary to ensure the recovery of utilities’ costs for maintaining the system that delivers electricity today.
Failing to adopt a regulatory strategy to manage the transition to new technologies can have a dramatic effect on cost allocation to consumers—and the reliability of their energy supplies. The evolution of telephone service provides an excellent example. The lack of coordination between the costs of wireless and the costs of legacy networks that still provide landline service across the United States has resulted in a heavy burden on non-participants in wireless, and threatens their system’s reliability.