Association for Public Policy Analysis & Management

Panel: Addressing Challenges for the Evolving Utility

(Natural Resource Security, Energy and Environmental Policy)

Traditional utility operations are being challenged by the growth of renewables, distributed generation, and demand side management, which have been spurred on by cost reductions, regulations, and incentives. The policy landscape concerning energy efficiency and renewable energy is complex, and creating sustainable energy systems will require the integration of new technologies, markets, regulatory frameworks and business practices. This panel will focus on several facets of the energy system transition. Each of the papers examines a unique aspect of an evolving energy system, employing a variety of methodologies. The first paper considers the impacts of state- and utility- scale financial incentives on customer-sited energy efficiency and renewable energy (EERE) projects, using a multi-level statistical modeling approach. The results shed light on the effectiveness of financial incentives used to encourage customer-sited EERE, with implications offered for future incentive designs. The second paper studies an often overlooked technology, combined heat and power (CHP), whose operational flexibility could allow for easier grid management and greater penetration of variable renewable resources. This study assesses the technology and policy opportunities and barriers for CHP by evaluating policies, laws and stakeholders’ opinions, drawing conclusions from 32 semi-structured interviews with legislators, regulators, installers and utility managers. The third paper examines the impacts of an increasing penetration of distributed generation, on utilities and their customers’ rates and bills. Results indicate the potential for significant subsidization between participants and non-participants, and cross-subsidization among rate classes if existing rate structures continue to be employed. Finally, the fourth paper considers one possible alternative rate structure, time-of-use pricing, drawing on evidence from 398 homeowners in Arizona and California. Results suggest an adverse selection bias, households who consume less energy during peak hours are more likely to enroll, if such a pricing structure is voluntary. All these results have important implications for policymakers and utility companies as they attempt to adapt to a changing energy landscape.