Over the next decade or two, state regulatory utility commissions will preside over some of the most important investments in the history of the US electric power sector, during perhaps its most challenging and tumultuous period. Given an estimated $2 trillion investment in the US electric industry by 2030, state regulators are currently among the most important energy decision-makers in the country. An approach of “risk aware regulation,” whereby regulators can explicitly and proactively seek to identify, understand, and minimize the risk associated with electric utility resource investment, can be an effective advocacy tool with state energy regulators.

In a January 21 webinar hosted by Ceres entitled, “Strategies for Effective Regulatory Advocacy,” Ron Binz, Principal of Public Policy Consulting, explored the seven essential strategies for risk-aware regulation. He illustrated methods for advising state energy regulators on issues such as diversifying utility supply, utilizing robust planning processes, employing transparent rate-making practices, holding utilities accountable, and other effective strategies. As a former regulator himself, Mr. Binz also offered insight into best practices for state regulatory advocacy.

Ceres also invited Synapse Energy Economics vice president Tim Woolf to speak on effective energy efficiency screening. He emphasized the importance of properly implementing tests to capture the full value of efficiency resources and the very real consequences of failing to do so. When applied improperly, states could see significant undervaluation of energy efficiency benefits, which, in turn, could lead to key programs becoming uneconomic, less efficiency being implemented, and customers paying higher costs than necessary. Mr. Woolf outlined best practices to guide regulators in their choice of test and implementation method.

The Ceres webinar complements RAP’s work on two papers: Practicing Risk-Aware Electricity Regulation: What Every State Regulator Needs to Know and Energy Efficiency Cost-Effectiveness Screening.