Governing Green Power
Effects of alternative pricing structures on electricity consumption and payments in the commercial and industrial sector
Abstract: We investigate the distributional and welfare impacts when commercial and industrial (C&I) electricity end users face a dynamic pricing structure as opposed to a constant volumetric price with demand charge on individual users’ peak usage. While demand charge does not necessarily reduce the system-wide peak, it often constitutes a large share of C&I users’ […]
Read MoreA Comparison of State-Level Carbon Reduction Strategies: A Case Study of Hawai‘i
Abstract: State-level electricity standards are proliferating and becoming more ambitious, with numerous US states adopting a Renewable Portfolio Standard (RPS) and a small but increasing number of states participating in carbon pricing programs. The State of Hawai‘i has an ambitious RPS that requires 100% electricity generation through renewable sources by 2045. This study uses a […]
Read MoreReal-Time Pricing and the Cost of Clean Power
Solar and wind power are now cheaper than fossil fuels but are intermittent. The extra supply-side variability implies growing benefits of using real-time retail pricing (RTP). We evaluate the potential gains of RTP using a model that jointly solves investment, supply, storage, and demand to obtain a chronologically detailed dynamic equilibrium for the island of […]
Read MoreGoverning Green Power III: Refining Plans for the Electricity Grid of the Future
University of Hawai‘i at MānoaEast West Center — Pacific Room (directions and map) GGP’s goal is to hasten a fair and efficient transformation to natural hazard resilience by focusing on necessary governmental changes. Earlier conferences focused on inefficiencies of current policies, the need for improved rate design to incentivize load shifting and demand response, and […]
Read MoreFour Alternative Models for Regulating an Investor Owned Utility of the Future
How do you coerce a monopoly to act as if it were operating in a ruthlessly competitive industry? This is the billion-dollar question of Public Utilities Commissions (PUCs). It’s a tricky thing to do with a mixed history of success. And it’s getting trickier, especially here in Hawaiʻi, where natural hazard resilience and so-called “distributed […]
Read MoreGoverning Green Power: How Should Utilities of the Future Make Money?
This report summarizes a two-day conference that addressed how future electric utilities will make money, a question provoked by advances in renewable energy and other distributed resources that cast doubt on conventional regulatory and business models. Engagement with issues in all of the sessions was strong, giving expression to a wide range of observations, opinions […]
Read MoreA Pocket Full of PIMs
By Michael Roberts In the arcane parlance of utility regulation, PIMs are “Performance Incentive Mechanisms.” This is where we’re headed because, slightly against my expectation, Governor Ige recently signed SB 2939, a bill unanimously passed by the legislature that requires that the Public Utilities Commission: “…establish performance incentives and penalty mechanisms that directly tie an […]
Read MoreVariable Pricing and the Cost of Renewable Energy
On a levelized-cost basis, solar and wind power generation are now competitive with fossil fuels, and still falling. But supply of these renewable resources is variable and intermittent, unlike traditional power plants. As a result, the cost of using flat retail pricing instead of dynamic, marginal-cost pricing–long supported by economists–will grow. We evaluate the potential […]
Read MoreShould regulators fear bond-rating agencies?
By Michael Roberts It seems that our political and administrative leaders worry about the bond rating agencies. Their fear is understandable. The cost of capital looms large in all manner of infrastructure projects, and the cost of that capital depends on how risky investors perceive repayment to be. The cost of capital also looms large […]
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