Utilities profit from building more power plants—a flawed model for a diminishing natural monopoly.
David Roberts argues that New York State's Reforming the Energy Vision (REV) may be "the most important clean energy policy initiative in the country today." Not only can it change a poorly aligned incentive structure but also will contribute to national carbon reduction targets, setting an example for the rest of the country.
"Reforming utilities is a perilous process, with intense politics and high stakes. Reliable service must be maintained throughout any transition — it's like rebuilding an airplane in flight," Roberts warns. There remain many uncertainties about how and whether or not it will work, but he opines that New York's innovative vision is a clear path to real reform.
The REV will tackle grid inefficiencies by smoothing out the load profile - reducing congestion at peak energy hours. "To do that, it needs to encourage energy efficiency, demand shifting, and distributed energy resources (DER)s — all of which, in the traditional regulatory model, reduce utility revenue." This is because utilities make money by building more power plants—not by improving efficiency of existing plants.
To fill the gap in revenues from reduced capital expenditures, the REV proposes that utilities are restructured to be distributed service providers (DSPs), responsible for maintaining the grid but also involved in creating and managing “markets where third parties can compete to provide energy products and services on the retail side, things like energy storage, demand response, and distributed generation,” Roberts explains.
"The boundary of the [public utility's] natural monopoly has moved inward again. What remains of it is grid operations and reliability planning — that is, running the distribution grid itself. That's the only function that is still properly the purview of a publicly accountable, regulated utility."
Amtrak Ramping Up Infrastructure Projects
Thanks to federal funding from the 2021 infrastructure act, the agency plans to triple its investment in infrastructure improvements and new routes in the next two years.
Ending Downtown San Francisco’s ‘Doom Loop’
A new public space project offers an ambitious vision—so why is the city implementing it at such a small scale?
Proposal Would Transform L.A.’s ‘Freeway to Nowhere’ Into Park, Housing
A never-completed freeway segment could see new life as a mixed-use development with housing, commercial space, and one of the county’s largest parks.
Why Brand New Cities Won’t Solve Our Urban Problems
Building cities takes time and resources. Why not spend them on fixing the ones we have?
Former Brooklyn Sugar Refinery Reopens as All-Electric Office Tower
A historic building was reimagined as a 15-story office tower powered by renewable energy.
NHTSA: Traffic Fatalities Decline for Fifth Straight Quarter
Traffic deaths were 3.3 percent lower in the first half of 2023 than the same period last year, but not all states saw the same results.
HUD's Office of Policy Development and Research
Mpact: Mobility, Community, Possibility
Lassen County Planning and Building Services
City of San Carlos
National Capital Planning Commission
This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.