Reconsidering Regulatory Uncertainty: Making a Case for Energy Storage

Abstract

This Article begins the complex dialogue that must take place to address the emerging technologies providing energy storage for our electricity grid. Energy storage has the capacity to be a game-changer for many facets of our grid, providing better integration of renewable energy, enhanced reliability, and reduced use of carbon-intensive fuels. Energy storage faces a number of obstacles, however, including technological, financial, and regulatory uncertainty. This Article focuses on the regulatory uncertainty, and defends the proposition that not all regulatory uncertainty is created equal. It argues for differential treatment of this uncertainty, depending on its context, scope, and source and applies this framework to the uncertainty surrounding the classification of energy storage. It finds that this uncertainty operates against high baseline levels of uncertainty in the energy industry, is limited in its scope, and is intentionally embraced by the federal regulators in an effort to realize the benefits of regulatory uncertainty. This Article asserts that this form of uncertainty is one that can be managed in a way to avoid stifling the development of this important technology. This Article sets forth strategies for regulators and regulated entities to continue to function, even within this zone of regulatory uncertainty.

Keywords: energy storage, regulatory uncertainty, federalism

JEL Classification: Q4