New Resource Provides Guidance on Fair Distribution of DER Benefits to Utility Customers

May 30, 2024

The burdens of the energy system do not fall equally on all electricity and gas utility customers. The production, delivery, and consumption of electricity and gas causes disproportionate social, health, and economic costs and benefits for low-income communities, communities of color, indigenous people, and rural customers, among others.

State legislators and regulators are establishing new goals and processes to promote energy equity. With rapid changes in consumer technologies like energy-efficient heat pumps, rooftop solar and battery storage, equity goals related to distributed energy resources are increasingly important.

Berkeley Lab's new report, Distributional Equity Analysis for Energy Efficiency and Other Distributed Energy Resources: A Practical Guide, describes a seven-stage framework (see figure) for answering the question, What are the distributional equity impacts of utility resource investments in the context of cost-effectiveness evaluation? 

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Graphic of the Key Stages in DEA Framework

 Key Stages in the Distributional Equity Analysis Framework

Berkeley Lab will present its new distribution equity analysis guide at a free webinar on June 25, 2024, at 11:00 a.m. PT/ 2:00 p.m. ET. Presenters include:

  • Tim Woolf, Synapse Energy Economics
  • Natalie Mims Frick, Berkeley Lab
  • Julie Michals, E4TheFuture
  • Cecilia Johnson-Hayman, U.S. Department of Energy

Register for the webinar at: https://lbnl.zoom.us/webinar/register/WN_PXQhVkuNSpeRHYBNB18K6A.

Researchers will walk through the seven stages for conducting a distributional equity analysis, share definitions of vulnerable (or priority) populations from across the country, explain distributional equity metrics, and provide data sources and opportunities to streamline the analysis. They also will discuss also how such analysis can be used to inform a variety of decisions to advance energy equity goals, including investing in a new distributed energy resource program, continuing to support an existing program, or redesigning current programs.

In addition, researchers will discuss how to combine distributional equity analysis with results from benefit-cost analysis for distributed energy resources to inform decision-making. While benefit-cost analysis looks at whether a proposed investment will provide net benefits for all customers on average, it does not consider the distribution of costs and benefits for customers with different characteristics, such as vulnerable populations.

The primary authors of Distributional Equity Analysis for Energy Efficiency and Other Distributed Energy Resources: A Practical Guide are Tim Woolf, Alice Napoleon, Danielle Goldberg, Ellen Carlson, Chelsea Mattioda, Elijah Sinclair and Camille Minns, Synapse Energy Economics. Natalie Mims Frick and Lisa Schwartz, Berkeley Lab, and Julie Michals, E4TheFuture, are contributing authors. The Building Technologies Office of the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy and E4TheFuture supported this work.