Practicing Risk-Aware Electricity Regulation: 2014 Update
This 2014 update to Ceres’ 2012 report, Practicing Risk-Aware Electricity Regulation: What Every State Regulator Needs to Know, looks at key trends that continue to reshape the U.S. electricity industry, analyzes changing costs and risk profiles of energy resources (especially renewable energy), and offers further insights and recommendations for smart, “risk-aware” decision-making by utility regulators.
It concludes that almost without exception the riskiest investments for utilities — the ones that could cause the most financial harm for utilities, ratepayers and investors — are large baseload fossil fuel and nuclear plants. In contrast, energy efficiency, distributed energy and renewable energy are seen as more attractive investments that have lower risks and cost. The update reaffirms the conclusions and recommendations from the 2012 report, which emphasized the need for intelligent risk management practices by utility regulators in overseeing utility investment.