Throughout the United States, utilities earn a profit through a tried and true regulatory model that has worked well for over 100 years. This model was built on the assumption that customers would use ever increasing amounts of electricity, and it worked for some time. But, as the need to save power and make electric systems more efficient becomes essential to adapt to climate change, this and other assumptions no longer hold true. Without changing how utilities are compensated, we run the risk of experiencing a true irony: utilities, the cradles from which our modern civilization rose, may become the chains preventing us from advancing toward a clean energy future.
Last week, the New York State Public Service Commission (PSC) – which regulates the state’s utilities – took action to transition to a new model aligned with Reforming the Energy Vision (REV), the state’s initiative to transform the electric grid into a cleaner, more efficient and affordable system. By issuing the “Order Adopting a Ratemaking and Utility Revenue Model Policy Framework,” the PSC is changing how New York’s utilities will be compensated, taking a major step to break the chains holding utilities back, and moving from a system where utilities get paid according to how much electricity they sell to one where utilities are compensated for producing environmental benefits aligned with the public good. Read More