Diversifying Electricity Customer Choice: REVing Up the New York Energy Vision for Polycentric Innovation

22 Pages Posted: 24 May 2019

See all articles by Joseph Nyangon, Ph.D.

Joseph Nyangon, Ph.D.

Center for Energy and Environmental Policy (CEEP), University of Delaware

John Byrne

Center for Energy and Environmental Policy (CEEP), University of Delaware

Date Written: December 30, 2018

Abstract

Electric utility business models are changing to integrate new technologies and distributed energy resources (DER). Diversifying energy mix and customer choices are both novel and useful in understanding key drivers of this transformation, including distribution system planning and customer-service options. Practical implementation of these solutions, however, shows that without proper planning, energy diversification could come at very high social and economic costs. For example, regulators have been slow in implementing policy, regulatory, and business model constructs that promote customer choice to animate high levels of grid reliability and resiliency. Equally important is how viable existing utility business models are to navigating transformation processes, including strategic resource management, revenue model, customer interface, and value propositions. This chapter discusses our use of the Hamel business model to offer strategic analysis of Reforming the Energy Vision (REV), which is aimed at decarbonizing New York’s energy sector and increasing customer choice and control. Specifically, we build from existing literature to argue that implementing distribution management systems (DMS) in which customer choice and DERs are prominent requires a shared or ‘polycentric,’ networked business-model innovations that build on capabilities and preferences of existing institutions to meet the growing demand for electricity services and utility strategic goals.

Keywords: Reforming the Energy Vision, Distributed Energy Resources, Business Model, Polycentric Innovation, Utility Choice Management, Hamel Framework

JEL Classification: K23, O31, O33, P48, R11, R28

Suggested Citation

Nyangon, Joseph and Byrne, John, Diversifying Electricity Customer Choice: REVing Up the New York Energy Vision for Polycentric Innovation (December 30, 2018). Available at SSRN: https://ssrn.com/abstract=3378603 or http://dx.doi.org/10.2139/ssrn.3378603

Joseph Nyangon (Contact Author)

Center for Energy and Environmental Policy (CEEP), University of Delaware ( email )

278 Graham Hall
Newark, DE 19716
United States

John Byrne

Center for Energy and Environmental Policy (CEEP), University of Delaware ( email )

278 Graham Hall
Newark, DE 19716
United States

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