An Advanced Grid Requires Regulatory Innovation

Spring and fall represent perhaps the quietest time for the energy sector – after the threat of harsh winter storms quiets and the intense summer heat is still in the distance. But this year, spring has brought with it the urgent call for transformation in the regulatory landscape. Like seeds patiently waiting for warmth and light to spur their growth, regulators have typically operated within the confines of slow, conservative regulation. But now, as we envision a clean energy future, the rich, fertile soil of innovation beckons.

The Department of Energy (DOE)’s recently released Pathways to Commercial Liftoff: Innovative Grid Deployment encourages regulatory bodies to ramp up the speed of innovation. Innovation holds significant potential for improving utility services, lowering costs, enhancing reliability, and achieving regulatory objectives. Regulatory policies play a crucial role in either discouraging or stimulating a utility’s commitment to innovation. They help address risk mitigation, balanced regulation, and fair allocation of costs and benefits among customers and shareholders. There has already been a lot of discussion around why regulators should approve utility business cases for advanced metering infrastructure (AMI) in its most advanced form (AMI 2.0) and how regulators might evaluate the costs and benefits of this investment.

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