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The Role of Electricity Tariff Design in Distributed Energy Resource Deployment
This paper simulates the effect of more advanced residential electricity tariffs on household adoption of distributed energy resources (DERs). We find that tariffs that are more time variant lead to greater reductions in coincident peak demands than flat volumetric tariffs, both from load shifting as well as from adoption of DERs. Regarding the effect of electricity tariff design on DER investments, we find that at current DER purchase costs investments in rooftop photovoltaic (PV), batteries and natural gas distributed generators are not privately optimal under any of our tariff design scenarios based on current cost levels for electricity and gas in the Chicago study area.
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Rate Design and Distributed Energy Resource Integration: Impacts on the Environment and Distribution System Costs
This project looks at the effects of different retail tariff designs on the deployment of distributed energy resource (DERs), and their subsequent effect on pollution, electric system costs, and customer bills. We use smart-meter data and techno-economic models to simulate the effects of more granular and cost-reflective tariff designs on DER investment and use.
This project is supported by the Alfred P. Sloan Foundation, and is a collaboration between the Institute for Policy Integrity, Environmental Defense Fund, and the MIT Energy Initiative.
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Building a New Grid Without New Legislation
A Path to Revitalizing Federal Transmission Authorities
In the absence of legislation, critical long-distance transmission can be developed by applying existing federal legal authorities. A number of important regulatory and commercial measures have been proposed, including streamlining transmission planning, upgrading existing transmission system components, putting transmission lines underground, and using existing rights-of-way from highways and railroads. Even if these solutions are adopted, however, state siting requirements may prove an important obstacle to developing an efficient, national transmission grid. So, this paper examines legal authorities already available to the Department of Energy and the Federal Energy Regulatory Commission to develop the interstate transmission capacity crucial to the energy transition.
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Comments and Reply Comments on FERC’s Carbon Pricing Policy Statement
The Federal Energy Regulatory Commission proposed a policy statement on carbon pricing in organized wholesale electricity markets. We submitted comments encouraging FERC to strengthen its proposal by making specific clarifications. We later submitted reply comments addressing points made by other commenters and providing further guidance on how FERC can improve its final policy statement.
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Comments to FERC on Clean Resources’ Participation in NYISO’s Capacity Market
Complainants in an ongoing proceeding ask that the Federal Energy Regulatory Commission (FERC) make changes to the New York Independent System Operator (NYISO)'s capacity market that would impose offer floors on all capacity market bids by state-supported renewables. We submitted comments showing why the complaint's arguments and evidence fall short of the legal standards required for FERC to make the findings and grant the relief requested.
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Comments to New York DEC on the Value of Carbon
New York State's Department of Environmental Conservation (DEC) has adopted a damage-cost approach to valuing carbon dioxide pollution. We submitted comments on the DEC's draft guidance supporting the policy. Our comments also raise points about the appropriate use of discount rates, calculating damages for other greenhouse gases, inclusion of co-benefits in analysis, and further considerations for a marginal abatement cost approach.
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Harmonizing States’ Energy Utility Regulation Frameworks and Climate Laws
A Case Study of New York
Unless the institutional framework and laws pertaining to fossil fuels are modified appropriately, decarbonization efforts will likely be stymied by confusion and related opportunities for opposition. This article, published in the Energy Law Journal, aims to start a wider conversation about the process of conforming existing energy law with novel, climate-oriented legislation. We concentrate on New York’s situation to illustrate how these tensions can manifest and what might be done to address them.
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Presidential Transition Guidance
As the presidential transition begins, the Institute for Policy Integrity has outlined recommended policy priorities for the Biden administration on climate, energy, and environmental policy, and related social equity outcomes. It is crucial that the incoming administration undertake aggressive reforms that are grounded in science and economics. In recent months, we published a series of reports highlighting actionable, near- and medium-term policy recommendations in several key areas.
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Comments to Arizona on Integrated Resource Planning
The Arizona Corporation Commission regularly requires that load serving entities (LSEs), which supply electricity to ratepayers, file plans with a 15-year time horizon disclosing environmental impacts from different resource mixes and how they will address those impacts. We submitted comments encouraging the Commission to ask that LSEs provide monetized estimates of the damages they expect to result from greenhouse gas emissions using the social cost of carbon.
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A Path Forward for the Federal Energy Regulatory Commission
Near-Term Steps to Address Climate Change
The Federal Energy Regulatory Commission should take an active role in better aligning regulatory practices with climate policies, speeding up development of necessary transmission infrastructure, and reforming energy market rules. This report details the specific policy reforms that federal policymakers should pursue to take advantage of important opportunities energy markets can provide to combat climate change while ensuring an economically efficient and speedy clean energy transition.
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