The 1990’s taught the U.S. the perils associated with utility deregulation. Investor-owned utilities (IOUs) and consumers still feel burned by a theory of competition and reduced grid prices that fell flat. Today, realizing renewables could feasibly satisfy the power demand, utilities are uneasy carrying high costs and very little customer base. Their lack of profit creates a regulatory quandary. The article considers two options: capacity markets and re-regulation. Capacity markets pay generators for maintaining capacity, regardless of production. Re-regulation essentially treats generation like transmission, earning a rate of return determined by public utility commissions (PUCs). The article cautions that obstacles to a renewables grid will be cultural, political and financial.
Read the full article here: The Next Big Utility Transformation
