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 ...
Resources Magazine — Oct 19, 2022
Air Pollution Exposure in New York City Schools
Beia Spiller discusses how community-engaged research produces new knowledge, informs policymaking, and benefits communities that are engaged in the research.
On the Issues — Oct 7, 2022
On the Issues: International Trade, World Carbon Pricing Database, and More
A biweekly newsletter connecting global current events, pressing climate and energy policy news, and economics research from RFF scholars. This week: international trade, World Carbon Pricing Database, and more.