The Clean Power Plan and the 'Future-Ready' Utility
Resources for the Future Discussion Paper 16-05
37 Pages Posted: 28 Feb 2016
Date Written: February 8, 2016
This paper explores the synergies between two transformational forces — implementation of the Clean Power Plan and the advent of the “utility of the future” — that could lead to a lower-carbon electric grid with more options and new services for electricity customers. The paper reviews key issues that will shape the transition to new utility market and regulatory structures and finds that some of the same principles that will guide policymakers on the design of these structures can help shape decisions on compliance pathways for the Clean Power Plan. The paper recommends a “future-ready” approach for the Clean Power Plan that will adapt to different market and regulatory structures. This approach includes a mass-based emissions target that covers all sources in the power sector and transparent allowance distribution that accommodates state priorities and provides a level playing field for incumbent utilities and third-party market participants.
Keywords: Clean Power Plan, distributed energy resources, performance-based ratemaking, electric distribution system, allowance distribution, emissions trading
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