According to a new paper from Resources for the Future (RFF), a synergy is possible between state implementation of the Clean Power Plan and the consideration of regulatory reforms known as “the utility of the future.”
In The Clean Power Plan and the “Future-Ready” Utility, RFF Visiting Fellow Joseph Kruger writes: “Implementation of the federal Clean Power Plan will happen at the same time that the US power sector is undergoing dramatic change. . . . States that embrace the utility of the future will be well positioned to comply with the Clean Power Plan at lower cost, and states and utilities that are implementing the Clean Power Plan will benefit from exploring how emerging market and regulatory structures can provide new choices and services for consumers.”
Kruger recommends a “future-ready” approach for the Clean Power Plan that will adapt to different market and regulatory structures. A few examples of his findings:
- Penetration of new technologies . . . is happening regardless of the Clean Power Plan [and] will require reform of regulatory and market structures.
- The best design option is a mass-based target that covers both new and existing sources, essentially the classic structure adopted for the successful sulfur dioxide trading program 25 years ago.
- State policymakers should consider transparent allowance distribution approaches that support state policy objectives and provide a level playing field for incumbent utilities and new entrants, which may include new players on the “distribution edge” of the electric grid.
See all of Kruger’s recommendations and read the full paper: The Clean Power Plan and the “Future-Ready” Utility.