Customer Choice and the Power Industry of the Future. Richard J. Campbell Specialist in Energy Policy September 22, 2014

“Some observers argue that new technologies are leading to a distributed generation (DG) future for customers, supported by utility base load generation and infrastructure. Various states and jurisdictions have begun initiatives to look at what a new “regulatory compact” could specifically encompass, with cleaner electric power and new services as the driving force behind utility investments. While the electric utility industry seems to be fully aware of the potential for change, the question is whether and how much the industry will embrace it. Some companies may see DG as appealing to only a segment of the market, but in times of shrinking revenues, any market share loss can be significant. The Edison Electric Institute contemplates that the potential rise in DG, and requirements for net metering payments (without “appropriate” compensation by net metering customers for use of the grid), could be a threat to the regulatory paradigm that allows costs of providing service to be recovered from the consumers who benefit from grid services.”