The Role of Innovation in the Electric Utility Sector

Innovation is essential for future power systems to be safe and secure, clean and sustainable, affordable and equitable, and reliable and resilient, according to a recent National Academies report. But state regulatory reforms are needed to encourage adoption of new technologies to support evolution of the nation’s power systems.1 Berkeley Lab's report, The Role of Innovation in the Electric Utility Sector, provides consumer, labor, utility, third-party provider, and clean technology consultant perspectives on this theme. To achieve state targets for clean energy and greenhouse gas emissions, some state regulatory utility commissions are exploring new approaches to spur innovation: -For utilities, regulatory and marketing flexibility, increased funding for demonstration projects, and performance-based ratemaking including multi-year rate plans -For third parties, ways to provide utility customers with innovative products and services directly Among the questions the report addresses: 1. How are consumer advocate views evolving with respect to innovative regulatory and ratemaking approaches? 2. How can utility decarbonization and grid modernization initiatives provide opportunities for local communities and workers to receive tangible benefits and facilitate community support for siting electricity infrastructure? 3. How are electric utilities partnering with technology companies to provide innovative energy management services and sustainable energy solutions for utility customers? 4. What regulatory innovations are public utility commissions exploring to enable third-party providers to participate in the transition to a modern electric system? 5. What regulatory changes are needed to enable innovative solutions from utilities and third parties at the necessary speed and scale to meet state decarbonization goals? The report is the 13th in the Future Electric Utility Regulation series, which taps leading thinkers to tackle complex regulatory issues for electricity. 1 National Academies of Sciences, Engineering, and Medicine. 2021. The Future of Electric Power in the United States. The National Academies Press. https://doi.org/10.17226/25968(link is external)