Full Title: A Framework for Organizing Current and Future Electric Utility Regulatory and Business Models
Author(s): Andrew Satchwell, Peter Cappers, Lisa Schwartz, and
Publisher(s): Ernest Orlando Lawrence Berkeley National Laboratory
Publication Date: June 1, 2015
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Description (excerpt):
Many regulators, utilities, customer groups, and other stakeholders are reevaluating existing regulatory models and the roles and financial implications for electric utilities in the context of today’s environment of increasing distributed energy resource (DER) penetrations, forecasts of significant T&D investment, and relatively flat or negative utility sales growth. When this is coupled with predictions about fewer grid-connected customers (i.e., customer defection), there is growing concern about the potential for serious negative impacts on the regulated utility business model. Among states engaged in these issues, the range of topics under consideration is broad. Most of these states are considering whether approaches that have been applied historically to mitigate the impacts of previous “disruptions” to the regulated utility business model (e.g., energy efficiency) as well as to align utility financial interests with increased adoption of such “disruptive technologies” (e.g., shareholder incentive mechanisms, lost revenue mechanisms) are appropriate and effective in the present context. A handful of states are presently considering more fundamental changes to regulatory models and the role of regulated utilities in the ownership, management, and operation of electric delivery systems (e.g., New York “Reforming the Energy Vision” proceeding).