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Title: Regulatory and ratemaking approaches to mitigate financial impacts of net-metered PV on utilities and ratepayers

Abstract

The financial interests of U.S. utilities are poorly aligned with customer-sited solar photovoltaics (PV) under traditional regulation. Customer-sited PV, especially under a net-metering arrangement, may result in revenue erosion and lost earnings opportunities for utility shareholders as well as increases in average retail rates for utility ratepayers. Regulators are considering alternative regulatory and ratemaking approaches to mitigate these financial impacts. We performed here a scoping analysis using a financial model to quantify the efficacy of mitigation approaches in reducing financial impacts of customer-sited PV on utility shareholders and ratepayers. We find that impacts can be mitigated through various incremental changes to utility regulatory and business models, though the efficacy varies considerably depending on design and particular utility circumstances. Based on this analysis, we discuss tradeoffs policymakers should consider, which ultimately might need to be resolved within broader policy contexts.

Authors:
 [1];  [1];  [1]
  1. Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
Publication Date:
Research Org.:
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
Sponsoring Org.:
USDOE Office of Energy Efficiency and Renewable Energy (EERE), Solar Energy Technologies Office (EE-4S)
OSTI Identifier:
1506241
Alternate Identifier(s):
OSTI ID: 1247787
Grant/Contract Number:  
AC02-05CH11231
Resource Type:
Accepted Manuscript
Journal Name:
Energy Policy
Additional Journal Information:
Journal Volume: 85; Journal ID: ISSN 0301-4215
Publisher:
Elsevier
Country of Publication:
United States
Language:
English
Subject:
29 ENERGY PLANNING, POLICY, AND ECONOMY; 14 SOLAR ENERGY; customer-sited PV; utility regulation; decoupling; shareholder incentives; rate design

Citation Formats

Satchwell, Andrew, Mills, Andrew, and Barbose, Galen. Regulatory and ratemaking approaches to mitigate financial impacts of net-metered PV on utilities and ratepayers. United States: N. p., 2015. Web. doi:10.1016/j.enpol.2015.05.019.
Satchwell, Andrew, Mills, Andrew, & Barbose, Galen. Regulatory and ratemaking approaches to mitigate financial impacts of net-metered PV on utilities and ratepayers. United States. doi:10.1016/j.enpol.2015.05.019.
Satchwell, Andrew, Mills, Andrew, and Barbose, Galen. Wed . "Regulatory and ratemaking approaches to mitigate financial impacts of net-metered PV on utilities and ratepayers". United States. doi:10.1016/j.enpol.2015.05.019. https://www.osti.gov/servlets/purl/1506241.
@article{osti_1506241,
title = {Regulatory and ratemaking approaches to mitigate financial impacts of net-metered PV on utilities and ratepayers},
author = {Satchwell, Andrew and Mills, Andrew and Barbose, Galen},
abstractNote = {The financial interests of U.S. utilities are poorly aligned with customer-sited solar photovoltaics (PV) under traditional regulation. Customer-sited PV, especially under a net-metering arrangement, may result in revenue erosion and lost earnings opportunities for utility shareholders as well as increases in average retail rates for utility ratepayers. Regulators are considering alternative regulatory and ratemaking approaches to mitigate these financial impacts. We performed here a scoping analysis using a financial model to quantify the efficacy of mitigation approaches in reducing financial impacts of customer-sited PV on utility shareholders and ratepayers. We find that impacts can be mitigated through various incremental changes to utility regulatory and business models, though the efficacy varies considerably depending on design and particular utility circumstances. Based on this analysis, we discuss tradeoffs policymakers should consider, which ultimately might need to be resolved within broader policy contexts.},
doi = {10.1016/j.enpol.2015.05.019},
journal = {Energy Policy},
number = ,
volume = 85,
place = {United States},
year = {2015},
month = {6}
}

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