Innovations in Utility-Rate Regulation
- Jun 4, 2019 1:28 am GMT
Regulation of electricity rates, asset ownership, and concerns over intergenerational equity, customer class cross-subsidization, and retail competition and the suite of service offerings available do not easily lend themselves to traditional “cost-of-service” regulation.
The role of regulation and of regulated utilities in supporting grid-edge distributed energy resource (DER) technologies—large-scale renewable on- and offshore wind and electric vehicle charging stations, among other technologies and initiatives—need to be settled. Recognizing that vertically integrated utilities might face different regulatory challenges than utilities owning transmission and distribution infrastructure only, both utility business models need a fresh look from regulators. More explicitly, a realignment of regulatory practices and policies and, to the extent necessary, legislation to address franchise rights need to be reviewed and realigned to incent desired investments and behaviors, and to penalize predatory business practices and unfair monopolistic behaviors.
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