Reforming Key Regulatory Processes in Response to New Trends: Solutions
Since passing Act 295 in 2008, the state of Michigan has been making strides in transforming its power sector to include a greater share of renewable energy, leverage energy efficiency to delay the construction of new expensive power plants, and to save customers money in avoided energy costs. As the state continues to implement new energy policy, Richard Sedano advised regulators on reforming key regulatory processes, addressing changes for both utilities and consumers. He outlines the principles of smart rate design, recommending time-of-use rates, critical peak pricing, and the value of solar tariff, to keep pace with changes in the energy industry. Drawing from experience across the United States, he explores the benefits of revenue regulation and performance-based regulation to motivate utilities toward innovation, exemplary results, and alignment with the public interest. Power sector reform is a delicate balance of smart rates, market mechanisms, planning, performance, cost management, and value. All reforms worth doing uncover or enable value somewhere in the system, whether on the utility side or the customer side of the meter.