The Clean Power Plan and the “Future-Ready” Utility
The same principles that will drive reforms to utility markets and regulatory structures can guide implementation of the Clean Power Plan toward a classic market-based structure that will adapt well to future electricity market developments.
- Changes in energy markets and penetration of new technologies, which are happening regardless of the Clean Power Plan, will require regulatory and market structure reforms.
- To address this transition, policymakers must align utility financial incentives with policy objectives, value and allocate the costs and benefits of new technologies and services, and provide a level playing field for new market participants.
- Some of the same principles that will guide policymakers on the design of new regulatory and market structures can help shape decisions on compliance pathways for the Clean Power Plan and can make state compliance easier and less costly.
- When these principles are applied to Clean Power Plan design choices, the best option is a mass-based target covering both new and existing sources—essentially the classic structure adopted for the successful sulfur dioxide trading program 25 years ago.
- State policymakers also should consider transparent allowance distribution approaches that support state policy objectives and provide a level playing field for incumbent utilities and new players on the “distribution edge” of the electric grid.
Resources Magazine — May 25, 2016
Responding to the Clean Power Plan and the Utility of the Future: Recommendations for States
Using the same guiding principles to navigate two transformational forces in the power sector will lead to a lower-carbon electric grid with more ...
Media Highlight — Jan 27, 2023
Bloomberg: "Air and Climate Standards Top EPA's 2023 Rulemaking To-Do List"
Comments made by EPA Deputy Administrator Janet McCabe during RFF's Big Decisions 2023 event in January feature heavily in a story about EPA priorities.
Resources Radio — Jan 10, 2023
Does Cap and Trade Exacerbate Environmental Injustice in California?, with Danae Hernández-Cortés
Danae Hernández-Cortés discusses how California’s cap-and-trade program affects levels of air pollution in environmental justice communities.