New Berkeley Lab report on incorporating equity into state regulatory decision-making

A growing number of states are increasing their attention to and emphasis on equity in utility regulatory decision-making. In order to guide state decision-makers in applying and incorporating equity concepts in regulatory processes, Berkeley Lab is pleased to announce the release of a report titled Developing an Equity Framework for State Regulatory Decision-Making. The report contextualizes approaches and metrics from various states into example processes to exemplify how this may be done, including topics such as the development of equity goals and definitions, intervenor funding, community engagement, performance-based ratemaking, and utility resource planning. The report offers five takeaways and considerations, supported by these examples:

1. Equity comprises multiple tenets and stages, all of which must be considered in parallel.
2. At the start of designing new equity-related processes, it is critical to establish clear and actionable goals, definitions, roles, and responsibilities to ensure progress.
3. Once goals are established, it is critical to align tools and metrics that bridge the gap between what an intervention may do and how it may impact communities and households.
4. Processes should be stakeholder driven. It is important to not only increase education and outreach, but to actively seek out and incorporate feedback from inclusive public processes and build in accountability mechanisms.
5. Processes should be iterative. Feedback loops between evaluations and program design provide the flexibility to better align existing interventions with community priorities and to incorporate equity into future decision-making.

The main body of the report constructs a framework adapted from the Farley et al. (2021) application of equity as a goal, a tool, and a metric. Though this framework can be applied generally, many detailed and cited examples can be found in the appendices, including: a sample of state equity goals and definitions, a comprehensive list of federal and state interactive equity mapping tools along with a summary of indicators and layers used, and a sample of utility directives with respect to equity.

Many states have taken initial, important steps towards including equity in regulatory decision-making processes. In the near term, a cohesive set of goals and definitions could help align state goals with those under their jurisdiction. Building on goals and definitions, states can then integrate various activities to support the equitable distribution of benefits through mechanisms to track progress, gain feedback, and make changes where appropriate. This report is intended to summarize and contextualize work that other states have done for state regulators looking to take similar actions in the near future.

For questions on the report, please contact Sydney Forrester (510-486-4123, [email protected]) or Andy Satchwell (510-486-6544, [email protected]).

We appreciate the funding support of the U.S. Department of Energy’s Office of Electricity and Office of Energy Efficiency and Renewable Energy in making this work possible.