Hitting a Moving Target: Planning for Grid Investments Driven by Load Growth
Source: NRDC | By Jordan Brinn
Planning the electric grid used to be much easier because utilities had a reasonable idea of where electricity demand would grow, when it would grow, and by how much. Electrification, a key strategy to decarbonizing California’s economy, has made distribution grid planning much more complicated because it is now harder to accurately predict how electricity demand will grow and what investments are necessary to support a reliable grid.
NRDC and The Utility Reform Network submitted an electric rate design proposal to the California Public Utilities Commission to promote equity and encourage beneficial electrification. This is the first stage in a regulatory process to implement income-based fixed charges. This proposal helped California regulators figure out how to confidently plan and pay for grid upgrades when the future is inherently uncertain, providing other states with a road map. Although the California Public Utilities Commission (CPUC) gets some things right with this decision, the ways in which it deviates from the NRDC proposal increases the risk of imprudent utility spending.
