As distributed energy resources (DER) become more common and play a larger role in helping meet clean energy targets, many states are increasing their focus on the valuation and compensation of these resources. The National Association of Regulatory Utility Commissioners (NARUC) is creating a manual to assist states with these key policy questions. We recently submitted comments to NARUC’s Staff Subcommittee on Rate Design to help ensure that the manual is complete, accurate, and unbiased.
Our comments explain that it is necessary to thoroughly describe and quantify the societal benefits of DER in order to promote economic efficiency. Further, DER compensation involves distinct policy decisions about compensation, valuation, and retail rate design, and distinguishing between these concepts is necessary to understand and solve these separate questions.