DERS: Industry Structure, Institutions, and Regulatory Response

November 12, 2015

This webinar discusses Report No. 1, Electric Industry Structure and Regulatory Responses in a High Distributed Energy Resources Future, in the Future Electric Utility Regulation Series. The report begins with an analysis of the ongoing structural evolution of the power sector. The authors--both economists and policy analysts--develop new analytical tools to examine the relationship between natural monopoly, competitive alternatives and regulatory responses. Focusing on potential profitability and the social benefits of coordination, and drawing from economic theory on multi-product natural monopolies and regulation, they extend their structural analysis to a world in which distributed energy resources are competitive with grid power in price and performance. The report then describes two competing views of the future. In one, utilities play a major role in sourcing, financing and optimizing distributed energy resources. In the other, competitive firms increasingly perform these functions. In such a future, the utility focuses on providing and maintaining infrastructure to deliver basic energy and capacity services, while facilitating distributed energy resources to create value for the utility and grid, lower the utility's costs, and encourage customers to remain connected to the distribution system rather than defect from it.

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