SEPA’s 51st State Industry Thought Leaders Debate the Role of the Utility Monopoly

01 Dec 2017

Nineteen authors weighed in on the role of the natural utility monopoly in thirteen papers - now publically available - as part of the third phase of the Smart Electric Power Alliance’s (SEPA) 51st State Initiative.

Disruption within the electric power sector has led to a changing, and sometimes unclear, role for U.S. utilities. This uncertainty has resulted in delayed investment in critical infrastructure for a 21st-century grid.

To provide more clarity on this issue, industry thought leaders, executives, researchers and innovators from large investor-owned utilities and trade associations, technology developers, research labs and nonprofits submitted diverse plans aimed at addressing:

  • In the face of rapid, technological change, does utilities’ longstanding “natural monopoly” on power distribution provide the economic and social value as originally intended? What parts should or should not be maintained? 
  • As new distributed technologies are integrated onto the grid, where and on what levels should utilities be allowed to compete? Should utilities be allowed to own specific distributed devices, such as smart meters, inverters or electric vehicle charging infrastructure? 
  • With evolving business and regulatory models, who will be the electric power provider of last resort, and what will that mean on a distributed grid? 

Despite varying differences in approach - ranging from describing the role of the future utility to providing a framework for considering how to answer this question - many agreed that the role of the utility should include integrated planning and that the Cost of Service model is inadequate. Many also saw a performance based regulation (PBR) as a pathway forward.

There was a wide spectrum for those that did characterize the ideal “51st State” role of the utility. Numerous authors suggested the electric utility become more narrow, focusing as some form of a Distribution System Operator. Others advocated expanding the utility role to take an active approach in developing, owning, and aggregating distributed energy resources (DERs).

“Uncertainty around the role of the utility is a major barrier to business model evolution and slows the deployment of new technology that can deliver customer value,” said Tanuj Deora, SEPA’s chief content officer, “SEPA applauds the hard work and thinking of all our authors for their contributions to reducing that uncertainty.”

SEPA will be hosting a Twitter chat on Friday, December 15 at 1:00 p.m. - 2:00 p.m. EST with several authors about their ideas around the natural utility monopoly. All are welcome to join using the hashtag #SEPAchat

Download the complete submissions package and the Summary of Submissionsnow. For a list of authors and each individual submission, see below.

51st State Initiative | http://www.sepapower.org