A call for unified energy planning

As competitors between fuel and electrical utilities heats up as a result of clear energy-promoting insurance policies that emphasize changing fuel with electrical energy, state regulators have to overhaul their method to regulation, argue students at Stanford and the College of Notre Dame.

A brand new white paper led by the Local weather and Power Coverage Program on the Stanford Woods Institute for the Setting lays out a case for unifying electrical and fuel utilities and instituting coordinated planning to make the transition to zero-carbon buildings extra environment friendly and cost-effective. A related webinar on Oct. 2 will current the white paper’s outcomes and have a dialogue amongst vitality specialists about efforts to deal with the newly aggressive panorama and advance the vitality transition.

“Utility regulators are facing a uniquely difficult combination of climate, safety, and equity concerns as they contemplate how to decarbonize gas networks,” mentioned paper co-author Joshua Lappen, a postdoctoral analysis affiliate on the College of Notre Dame and fellow on the Way forward for Warmth Institute. “By recognizing the competition taking place between gas and electricity, regulators can find new opportunities to proactively manage the building-energy transition.”

The white paper, “The Unseen Competition in the Energy Transition: Acknowledging and Addressing Inter-Utility Competition to Achieve Managed Decarbonization,” requires state public utility commissions (PUCs) to formally plan round a unified vitality sector. The report warns that continued competitors between fuel and electrical utilities might delay decarbonization, saddle ratepayers with increased prices, lock in pointless investments in fossil gasoline infrastructure, and disproportionately burden low-income vitality customers.

Competitors or unification

Whereas electrical and fuel utilities have historically operated in distinct markets, climate policies are more and more pushing these sectors into competitors, notably in constructing heating and cooking, which have been dominated by fuel utilities for many years in lots of areas. As applied sciences like electrical warmth pumps and induction stoves develop into extra environment friendly and widespread, fuel utilities have launched aggressive campaigns to guard their market share. The federal Inflation Discount Act has additional intensified this competitors by providing subsidies for electrical home equipment, fueling what the authors describe as a “patchwork of duplicative energy monopolies.”

“In many parts of the U.S., gas and electric utilities are now providing nearly identical services, but customers are paying for the maintenance of two separate distribution systems,” the authors write. This, they argue, creates financial inefficiencies that could possibly be prevented by higher planning and coordination.

The white paper advocates for PUCs to consolidate planning processes for fuel and electrical utilities, treating them as elements of a single vitality sector. This may permit regulators to optimize investments throughout each methods, decrease stranded belongings, and be certain that decarbonization proceeds equitably and shortly.

The authors advocate that regulators contemplate consolidating fuel and electrical utilities that serve the identical territories, probably merging them into unified vitality service suppliers. This may not solely streamline decarbonization efforts but additionally assist preserve service security and reliability and defend ratepayers from escalating prices.

Managing the transition

The report highlights the dangers of inaction, warning that fuel utilities are incentivized to proceed to increase fossil gasoline infrastructure with lifetimes longer than decarbonization timelines and creating monetary dangers for customers.

By managing competition between fuel and electrical utilities by proactive regulation and planning, the researchers consider the U.S. can speed up its transition to a decarbonized vitality system whereas defending each ratepayers and the economic system.

“Times have changed,” mentioned paper co-author Amanda Zerbe, an early profession local weather legislation fellow on the Stanford Legislation College’s Environmental and Pure Assets Legislation & Coverage Program. “To achieve our local weather targets, we now have to begin treating fuel and electric utilities as a single energy system.”

Co-authors of the paper additionally embrace Michael Wara, director of the Local weather and Power Coverage Program on the Stanford Woods Institute for the Setting and Michael Mastrandrea, analysis director of this system. Wara and Mastrandrea are senior director for coverage and director for coverage, respectively, on the Stanford Doerr College of Sustainability’s Sustainability Accelerator.