Sustainable Energy Utility Design: Options for the District of Columbia

Abstract

Cities and states in the US are playing a leadership role in enacting innovative policies to promote energy sustainability. For example, twenty-nine states and the District of Columbia have passed renewable portfolio standards that require or encourage utilities to derive a percentage of their electricity from renewable sources. Given the magnitude of the present energy challenges, a growing number of states and cities are seeking even more aggressive policies in order to fundamentally alter energy demand from the bottom up. This trend has given rise to the concept of the sustainable energy utility, which was first established through legislation by the State of Delaware in 2007. A sustainable energy utility is an independent and financially self-sufficient entity responsible for delivering energy efficiency, energy conservation, and customer-sited renewable energy to end users. An SEU targets all sectors and fuels, including transportation. This is a major departure from supply-side approaches, and from traditional demand-side policies, which tend to address only certain types of fuels (e.g. electricity, but not heating or transportation), or limited “silos” of end users (e.g. residential but not municipal consumers). This report reviews the sustainable energy service delivery models of several leading jurisdictions and compares their structure, function, and design to that of the sustainable energy utility concept. The paper then examines the potential energy and environmental impacts of a sustainable energy utility adopted by the District of Columbia.

Keywords: sustainable development, sustainable energy, energy conservation, energy efficiency, sustainable energy energy service delivery models, sustainable energy utility

JEL Classification: H4, H7, O2, Q2, Q4, Q5, R5