Changing Public Utility Models to Address Climate Change Concerns

Since the start of the deregulation era under President Carter, few industries have been spared the upheavals that have been changing regulatory models at the federal and state level. The electric utility business model, under which regulated utilities were granted a competition free environment and a guaranteed return on investment in return for providing safe, reliable power to all users, has been undergoing change for almost forty years. Despite the significant harms incurred by California's prior deregulation efforts, the pace of utility deregulation has increased in recent years, as states take the lead in addressing climate change concerns, and resiliency of the electric grid takes on increased importance in light of Hurricanes Katrina and Sandy and similar events.

In this course we will examine the changes undergoing the historic utility model as states seek creation of decentralized electric systems, using market-based approaches to reach renewable energy goals, such as New York and California's goal of reaching fifty percent electric generation from renewables by 2030. We will examine various programs states are using, such as Minnesota's Renewable Portfolio Standard, Connecticut's Green Bank and New York's Clean Energy Standard to increase renewable resources and reduce fossil fuel consumption, while adapting the role utilities play in providing a safe and reliable electric grid.

Learning Objectives:

1. Understand the basics of the historic utility business model as developed under the Public Utilities Holding Company Act, and the pressures that have led states to seek a better approach
2. Identify the federal-state relationship in electric utility regulation, and the current issues in defining the boundaries of state and federal regulatory authority
3. Review the current efforts to reform the model, particularly the New York Reforming the Energy Vision program, and similar state programs
4. Examine the efforts to create a "prosumer" approach to energy consumption, and the methods states are using to incentivize growth of distributed energy resources