Got a question about regulation of the power sector? We've probably written a paper about it. Papers and primers are organized by topic. We recently updated our website and are still linking files, so if something is missing or broken, we're working on it!
Main topics that we've written about or commissioned research on include:
For Electricity Committee interests:
For Energy Resources & The Environment Committee interests:
For Gas Committee interests:
For Critical Infrastructure interests:
For Individual State Technical Assistance under the Recovery Act-funded SERCAT program.
The Interface between Utility Regulation and Financial Markets (November 2018)
The purpose of this paper is to review the interfaces between regulators and capital markets to explain the significance of financial market knowledge in public utility regulation. This topic is critical because IOUs finance their investments in utility infrastructure through debt and equity capital obtained from capital/financial markets. This report reviews the significance of financial markets to regulation, describes how key variables (such as cost of capital) are calculated, and describes opportunities for regulators to become educated about relevant financial market activity.
The dual trends of utilities' increasing investments in the electric system and decreasing load growth have the potential to put upward perssure on electricity rates. Public utility commissions have the difficult responsibility of balancing the need to sufficiently fund electricity delivery with the need to preserve just and reasonable rates. This paper examines whether historic rate changes resulted in shortened tenure for public utility commissioners through a quantitative analysis of electricity rate and bill data and a set of interviews with current and former regulators. The analysis did not identify an obvious statistical relationsihp between large rate increases and effects on utility commissioners. However, the interviews resulted in a range of effective, ratepayer-centric strategies that have been useful to past commissions in times of crisis.
Transportation and Power Sector Interdependencies Paper (September 2016)
State commissions may not realize that they regulate areas of the transportation sector, or how interdependent transportation and power are. This paper lays out what state authorities exist in transportation, and explores the ways power and transport are converging. This paper is written to help state regulators enhance their understanding of these connections.
NCEP hosted a well-attended annual meeting and workshop in May 2018 to explore the evolution and effect of distributed energy resources (DERs) on the transmission and distribution systems in the context of planning, operations, and markets at the state level. State electricity decision makers discussed DERs such as energy efficiency, distributed generation [e.g., solar photovoltaic (PV) systems], energy storage, demand response, electric vehicles, and more. During the workshop, participants offered examples of projects and decisions from across the country that help illustrate how the interactions between transmission and distribution might evolve. Participants also provided helpful resources and references, and facilitators documented questions and research that still need to be addressed. These valuable insights can help guide state decision-makers and provide a research agenda for the broader energy community.
Electric Transmission Seams – A White Paper (February 2015)
Seams are the interface between two wholesale electricity control areas, systems, and markets; where there are seams, inefficiencies arise that prevent the economic transfer of capacity and energy between neighboring wholesale electricity markets largely as a result of incompatible market rules or designs and this primer examines seams issues through the lens of three current and contested regulatory matters before state and federal regulatory commissions.
This EISPC paper explores NTAs - electric utility system investments and operating practices that can defer or replace the need for specific transmission projects. NTAs can lower total resource cost by reliably reducing transmission congestion at times of maximum demand in specific grid areas, and can be identified through least-cost planning and action for managing electricity supply and demand.
This EISPC paper highlights concepts introduced in a Risk Assessment White Paper. EISPC engaged EPRI to conduct three separate case studies that demonstrate how the use of probabilistic risk assessment analyses can complement traditional transmission planning.
Transmission Planning White Paper (February 2014)
This EISPC paper is intended to help policymakers understand the basic technology, economics, and regulations that underlie the planning of today’s electric transmission system. It is written primarily for those who are new to electric transmission issues.
This white paper provides an orderly compilation of information, a comparison of market structures, and an explanation of how differences in those market structures are likely to affect approaches to planning and resource development in the Eastern United States.
Co-Optimization of Transmission and Other Supply Resources (December 2013)
Co-optimization is the simultaneous identification of two or more classes of investment decisions within one optimization strategy. In power systems, “classes of investment decisions,” almost always refer to decisions to build generation and/or transmission. However, it may also include other types of decisions such as developing demand-side solutions, installing storage, or building natural gas pipelines. Co-optimization can be an effective tool to better understand various risks, benefits and costs in the assessment of resource options regardless of the market or regulatory structure.
(Webinar Recording) The accompanying EISPC paper provides a primer on fundamental concepts and best practices in long term load forecasting, and a real-world demonstration of the load forecasting techniques and methodologies through three case studies with three power companies including an ISO, an IOU and a Co-op, together covering 10 states in the U.S. Eastern Interconnection.
EISPC Load Forecasting Case Study (January 2015)
This EISPC paper aims to provide regulators and the community an overview of load forecasting techniques, particularly the opportunities that smart grid technologies bring. The complex concepts, terms, and statistics that are used in load forecasting are explained, as well as demonstrated through three case studies.
Additional Analysis of EIPC Phase I and II Reports (December 2014)
Between 2010 and 2012 the Eastern Interconnection Planning Collaborative (EIPC) conducted a major long-term resource and transmission study of the Eastern Interconnection (EI). With guidance from a Stakeholder Steering Committee (SSC) that included representatives from the Eastern Interconnection States’ Planning Council (EISPC) among others, the project was conducted in two phases. The results from Phase 1 and 2 provided a wealth of data that could be examined further to address energy-related questions. A list of 14 topics was developed for further analysis, covering topics such as cost comparisons, regional evaluations, wind curtailment, demand response, and impacts of various environmental and technology parameters.
Data Mining EIPC Scenarios - EISPC (January 2015)
This paper describes and explains the additional insights from the Eastern Interconnection Planning Collaborative (EIPC) Study concluded in 2012. Topic 14 explores changes in key inputs between 2011 and 2014 including capital costs, distributed solar, demand projections, and environmental policies. Additionally, it addresses the applicability of the additional information to specific regions of the Eastern Interconnection, as well as to the broader Interconnection. Lastly, it provides guidance on how states might incorporate the additional information into their planning processes.
National Council on Electricity Policy:
This EISPC white paper is a primer on the use of Probabilistic Risk Assessment for transmission planning to help transmission planners and state regulators better understand the risks of uncertainties impacting power system reliability and economics and to offer guidance on how to incorporate risk analysis into the planning of transmission and other resources.
Economics of Resource Adequacy - EISPC (May 2013)
This EISPC paper reviews measures of resource adequacy as used in different parts of the US power system, how reserves are measured, and uses a risk based analysis to measure trade-offs between the costs of relatively larger capacity targets with reduced energy and societal costs experienced as a result. It explores resource mix sensitivities and recommends ways that states can positively influence resource adequacy levels in power systems in both vertically integrated utility regions as well as in regions with organized wholesale markets.
EISPC Energy Zones 2013 Report (October 2013)
This report describes the work conducted in support of the EISPC’s Energy Zones Study and the development of the Energy Zones Mapping Tool (EZMT) performed by a team of experts from three U.S. Department of Energy’s National Laboratories. The multi-laboratory effort was led by Argonne National Laboratory (Argonne), in collaboration with the National Renewable Energy Laboratory (NREL) and Oak Ridge National Laboratory (ORNL).
Application of the Energy Zones Mapping Tool (November 2014)
This white paper is intended to provide EISPC Members with an assessment of the potential for using the Energy Zones Mapping Tool (EZMT), developed for EISPC primarily by Argonne National Laboratories, to assist in the evaluation process for siting transmission in sensitive areas such as National Trails. More specifically, EISPC wants to better understand how the EZMT might be used to enhance processes for assessing transmission development in environmentally sensitive areas.
This EISPC report aims to provide a comprehensive analysis of the potential long-term infrastructure requirements for the electric and natural gas industries, including integration of the operational constraints of both industries into the development of natural gas and electric infrastructure.
This paper explores the emerging issues concerning the use and sharing of customer information that is generated by advanced meters and other intelligent power-sector infrastructure. It also notes areas of smart grid that have value, particularly in the domain of data access, that may be overlooked.
The Smart Grid: A Primer (May 2009)
Commissioners, companies, customers, and other electricitysector stakeholders are asking questions about the smart grid – what it is, what it can do, what value it brings, and what potential pitfalls should be avoided when considering moving forward. This frequently asked questions (FAQ) factsheet seeks to explore some of these questions and provide brief answers.
State regulators and legislators have begun to examine options for existing nuclear power plants within their respective jurisdictions, and may pursue policies that focus on either the continued operation or closure of such plants. This report will help state regulators and legislators understand how the states have made decisions to retain nuclear power plants. The report examines case studies in which states have addressed the future of their nuclear power plants.
EISPC - Assessment of the Nuclear Power Industry (July 2013)
This study serves as a primer on the development of nuclear power in the United States, identifying current issues facing the industry, and providing an overview of future nuclear technology. This assessment of the nuclear power industry combines the findings of a Locational Study for new and existing nuclear power plants with a white paper analyzing state level policies that encourage or discourage the continued development of nuclear power.
This paper examines the present state of carbon capture, utilization, and sequestration (CCUS and the challenges to widespread deployment in the energy sector. It explores the policy and technology environment for coal-fired power generation and CCUS for energy and industrial uses. It offers an array of actions policymakers and regulators can use to encourage CCUS adoption to extend the life of existing coal-fired power plants while drastically cutting carbon dioxide emissions, illuminating how the coal plant of the future could look.
On March 23, 2017, the NARUC/DOE Carbon Capture, Utilization & Storage Partnership hosted a webinar on the Petra Nova carbon capture facility in Texas. Petra Nova, the world's largest post-combustion carbon capture facility, sequesters more than 5,000 tons of carbon dioxide daily from a coal-fired generating unit and sends the gas via pipeline to an oilfield 80 miles away, where it is used for enhanced oil recovery. A vice president at project partner NRG Energy discussed the technical and economic characteristics of the project and answered questions about the future of carbon capture in the U.S.
State Technical Assistance Surge Brief: Enhanced Oil Recovery (September 2016)
On September 23, 2016, State staff came together for a technical assistance "surge" to explore enhanced oil recovery (EOR), and the implications for state regulators. We summarized the information-sharing that happened in this summary, and it's well-worth a read if you want a starting point for understanding how state agencies understand and address this policy topic.
Two documents were produced together, a study and a white paper. The study examines various coal technologies in the context of demand for electricity, the diversity of resources, and environmental requirements, and is intended to be a foundational resource for future EISPC modeling efforts. The EISPC white paper explores the market forces and environmental regulations that pose significant challenges to new and existing coal-fired generation in the Eastern Interconnection. The report examines various coal technologies in the context of demand for electricity, the diversity of resources, notably natural gas, and new environmental requirements. It includes a summary exploring the incentives and disincentives faced by coal-fired generating resources.
With the increasing focus of national policy on carbon emissions issues, State public utility commissions will be expected to play a larger role in taking steps to reduce carbon emissions at the State level in the coming years. To help commissions gear up for this role, NARUC has published a primer that takes a look at existing and emerging technologies for coal generation and carbon capture as well as potential CO2 storage options.
This primer focuses on the technology and policy issues surrounding carbon capture technologies and carbon storage. It provides an introduction to the status of research and technology options and discusses the range of issues that may face State Commissions should regulatory regimes addressing climate change motivate wider deployment of carbon capture and storage.
This primer focuses on generating technologies that use coal and that may be proposed for approval by Public Utility Commissions in the coming decade. It provides an introduction to the technology options and discusses the range of costs proposed by researchers for different tehnologies, including the influence of a price on carbon dioxide emissions.
Clean Coal Technology Synthesis Report: A State Perspective (Drafted but not finalized, July 2002)
The demand for electricity in the United States continues to grow while a major portion of the existing coal-fired generating capacity will be due for renewal or upgrade in the near future, due to aging and/or environmental regulations.
As distributed energy resource (DER) adoption grows, the electric industry is shifting from a centralized model towards two-way power flow. Consequently, state and federal regulatory frameworks, utility business models, reliability and operating standards, planning and investment approaches, and wholesale markets will all need to evolve. NARUC explores issues for regulators to consider during this transition.
NARUC's Lab hosted a call on February 6, 2017, as part of our "surge" effort to link state staffers to learn from each other. This call focused on carbon trading programs in the northeast and California: the conception and structure of these programs and their future potential for continued operation or expansion. This document summarizes presentations from Maryland and California staffers and discussion among other state staffers.
NARUC’s Lab hosted a call on Monday, June 27, 2016 as part of our new “surge” effort to help link state staffers to learn from each other. The first call focused on smart inverters, and was for state PUC staffers to share experiences and grow their understanding of power sector technologies, markets, and the associated regulatory policies. This document summarizes the discussion.
The Eastern Interconnection States Planning Council (EISPC) has begun a project to facilitate interstate communication on energy-environmental issues affecting the Eastern Interconnection and the country. The workgroup engaged in this effort is creating resources that State agencies can choose to consider as a starting point for coordinating States' implementation plans for the EPA's Clean Power Plan. This document complies resources and ideas from this working group's' efforts.
Three documents are included: a multistate planning checklist, a legislative language examples checklist, and a sample memorandum of understanding for multistate coordination.
If you work in the energy sector, by now you have heard of the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan (CPP) which establishes greenhouse gas emissions guidelines under Section 111(d) of the Clean Air Act. Maybe your state is enthusiastic about the plan; maybe it’s ambivalent or even suing to stop it. No matter what your state’s perspective is with regarding the CPP, if you work in a state agency that interfaces with the power sector, you might have started making a list of things you would need to do to get your state through the steps required for compliance. This playbook is written to help.
This EISPC paper explores the challenges facing electric utilities and their state regulators as they grapple with the various questions inherent in advancing the public interest during a transition to higher reliance on DG. It begins by highlighting DG’s recent developments and future prospects, and enumerating DG’s unique features as a source of electric power and related grid services; concerns it has raised; and its relationship to the smart grid.
States are looking for effective policies to drive funding to increase renewable energy, and the feed-in tariff has emerged as a potentially useful tool. Feed-in tariffs (FITs) have been credited with driving renewable energy growth in Europe, and a growing number of U.S. policy makers are examining the potential for achieving similar success if the policy can be made compatible with current energy and economic goals. While many finance tools and policies are already available in the U.S. to support the development of renewable energy, a feed-in tariff may offer an additional incentive particularly where gaps exist in current renewable energy policy.
EISPC Demand Side Resources Studies (April 2013)
The goal of this EISPC analysis is to provide a forecast of the adoption of demand-side resources, such as demand response (DR), and the associated impact on electricity demand in terms of three factors: resource capacity; annual energy impact; and peak load impact.
Type and topics in the report
Identification of State-by-State Existing and Potential for…
A guide to Portfolio Management in the Electricity Sector for State Regulators, commissioned by the Energy Resources and Environment Committee through NARUC's Grants & Research Department.
Revenue Decoupling is gaining increasing attention as Public Utility Commissions and others explore ways to align electric and natural gas utility revenue mechanisms with demand-side resources. This FAQ provides an overview of decoupling for the electric and natural gas sectors, gives examples of State experiences, highlights some of the issues that may face Public Utility Commissions investigating decoupling, and provides resources for those interested in learning more.
State And Regional Policies That Promote Energy Efficiency Programs Carried Out By Electric And Gas Utilities: A Report To The United States Congress Pursuant To Section 139 Of The Energy Policy Act Of 2005 (Section 139 Energy Efficiency Study) (March 2007)
Section 139 directed the Secretary of Energy, in consultation with the National Association of Regulatory Utility Commissioners (NARUC) and the National Association of State Energy Officials (NASEO), to conduct a study of State and regional policies that promote cost-effective programs to reduce energy consumption (including energy efficiency programs) that are carried out by electric and natural gas utilities and then submit a report to Congress one year after the enactment of EPAct on the findings of the study as well as any recommendations.
The required DOE study was conducted by DOE’s Office of Electricity Delivery and Energy Reliability, which engaged the National Council on Electricity Policy (the “National Council”) to prepare a draft for its consideration in accordance with EPAct sections 139 (a) and (b).2 This report summarizes the findings of the DOE study, and makes recommendations for State and regional policies.
Many states have completed distributed generation (DG) interconnection procedures and agreements for small generators after extensive stakeholder processes. Other States have begun to consider how to implement DG. The National Association of Regulatory Utility Commissioners (NARUC) has adopted a number of principles, policies, and resolutions recognizing the importance of DG to the nation's energy systems.
ver the last few years, several States -- California, Texas, New York, and Ohio -- have completed distributed generation (DG) interconnection procedures and agreements for small generators after extensive stakeholder processes. Other States have begun to consider how to implement DG. The National Association of Regulatory Utility Commissioners (NARUC) has adopted a number of principles, policies, and resolutions recognizing the importance of DG to the nation's energy systems.
Who can forget Economics 101? Supply and demand. Market clearing prices. Economic efficiency. Elasticity. For too long, the demand side of the electricity equation has been neglected, dismissed, discounted, or ignored. Too often, the proposed solution to any problem has been more supply. Now, after the price and reliability problems of the last couple of years in many regions of the country, demand is having its due. It saved the bacon for mo re than one region in 2000 and 2001.
The Renewables Portfolio Standard: A Practical Guide (February 2001) (being added)
The large-scale production of electricity from renewable energy sources began in the 1980s, when several states aggressively pursued the implementation of the federal Public Utility Regulatory Policies Act (Hamrin and Rader 1993). Comparatively little progress was made during decade of the 1990s, due in part to impending restructuring of the electric utility industry and the perceived incompatibility of PURPA and regulatory resource planning techniques with competitive electricity markets (Rader and Wiser 1999). As part of electricity restructuring efforts in the last few years, however, eight states have adopted a new renewable energy policy -- the Renewables Portfolio Standard (RPS) -- that promotes renewable energy in a way that is consistent and compatible with competitive electricity markets.
All regulators understand the importance of rate design. So do customers. Even those who have never given it a moment's consideration implicitly understand that there is a direct relationship between the price of a good and their willingness to purchase it. Price - both its level and its form - is a powerful determinant of consumer behavior. Accordingly, the setting and design of rates is one of the regulator's most effective means by which to achieve desired policy objectives.
Performance Based Regulation for Distribution Utilities (December 2000)
This report provides regulators and their staffs with practical advice on performance-based regulation (PBR) for distribution utilities. It focuses, in particular, on how to design and evaluate PBRs that encourage deployment of cost-effective distributed resources - both smaller-scale dispersed generation and end-use efficiency. Most commissions will confront PBR issues in context of a particular utility proposal. Of course, no report can anticipate all of the issues or details that such a filing will raise; but it is both possible and worthwhile to describe a relatively straightforward series of steps and questions that can guide commissions and their staffs in dealing with the most important issues. For commissions that have the luxury of considering PBR outside the context of a particular case, this same set of steps and questions will help form the foundation of a general PBR rule.
On March 28, 2017, the NARUC/DOE Natural Gas Infrastructure Modernization Partnership, chaired by Commissioner Diane X. Burman of New York, hosted a webinar on the Aliso Canyon methane leak and its aftermath. An interagency task force led by the U.S. Department of Energy and the Pipeline and Hazardous Materials Safety Administration released a report examining the causes of the leak and recommending actions to improve the safety of the nation's approximately 400 underground natural gas storage facilities. PHMSA released an interim final rule regarding underground gas storage in December 2016. This webinar discussed the task force report and PHMSA's new inspection program.
This EIPC paper is intended to provide information for state regulators and government representatives, and those in natural gas and the electricity industries, who are interested in learning the fundamental details of the operation and the planning of the two industries. The white paper will assist stakeholders in fostering appropriate public policies and facilitating necessary coordination for the optimal operation and the investment planning of the two interdependent infrastructures.
States create their autonomous curtailment policies with no requirement to consult neighboring or other States’ policies. In some cases, some States may have gone beyond minimum requirement and considered the implications of their neighbors’ policies. In other cases, States may not be aware that their neighbors’ policies might create problems for them. In the case of a gas shortage, which might occur under conditions such as a particularly harsh winter, States may find themselves in the unfortunate position that we outline in this paper.
With natural gas demand projected to steadily increase in the coming years, LNG may be an important part of the US natural gas market by providing a supply alternative that allows source diversity, meets spot market demand, serves important local uses, and creates storage alternatives. This primer explores the supply dimensions of LNG: where it comes from, what it costs, and what factors may make it an important resource for State Commissions to consider.
Cybersecurity Preparedness Evaluation Tool (June 2019)
The CPET provides a structured approach for PUCs to use in assessing the maturity of a utility’s cybersecurity risk management program and gauging capability improvements over time. The CPET is designed to be used with the Questions for Utilities on an iterative basis to help PUCs identify cybersecurity gaps, spur utilities’ adoption of additional mitigation strategies, and inform cybersecurity investment decisions.
The Questions for Utilities provides a set of comprehensive, context-sensitive questions that PUCs can ask of a utility to gain a detailed understanding of its current cybersecurity risk management program and practices. The questions build upon and add to those included in prior NARUC publications.
Cybersecurity Strategy Development Guide (November 2018)
NARUC developed this Cybersecurity Strategy Development Guide to support state public utility commission (PUC) regulators in developing cybersecurity strategies tailored for their own commissions. This document aims to guide commissions’ interactions with their utilities on issues related to cybersecurity, drawing from the experiences of federal, state, and private-sector stakeholders, including state PUCs themselves. Further, it provides guidance and practices for regulators to consider as they develop and implement their strategies. Commissions that have already developed a strategy can use this guide to review and enhance their current strategy.
Do you ever feel like you're advised to make risk-based decisions, but aren't an expert risk management? This is a paper about risk management for people who are new to it: what it is, how regulators can use it, and how they can ask questions to explore its use by the regulated utilities and other stakeholders they interact with. Risk management is a complex discipline that leverages statistics and other quantitative methods, as well as psychology and other qualitative methods, and this paper lays out an introduction to what risk management is and gives a few starting points for regulators interested in augmenting their processes with it. In particular, it focuses on ways that regulators can employ risk-informed thinking to make choices around the areas of critical infrastructure protection.
Electric utilities across the country have been providing mutual aid to each other during emergencies for years. One strategy for communicating and coordinating information as well as tangible resources needed on a wider scale is to use regional mutual assistance groups (RMAGs). This paper explains what an RMAG is, identifies some of the reasons why they are a central mechanism for assuring electric grid reliability and resilience of the power system, and offers suggestions for how we can take a great idea and make it even stronger and better.
This primer addresses cybersecurity – particularly for the electric grid – for State utility regulators, though we hope that it will be useful for a wide audience of policymakers in this field. The primer provides some conceptual cybersecurity basics for the electric grid and provides links to how regulators can: • Develop internal cybersecurity expertise; • Ask good questions of their utilities; • Engage in partnerships with the public and private sector to develop and implement costeffective cybersecurity; and • Begin to explore the integrity of their internal cybersecurity practices.
This paper is meant to serve as a conversation-starter for policy-makers working with the electric sector and other utility sectors – particularly State public utility commissions. Its intent is to lay the foundation for establishing common definitions and developing a methodology for utility commissioners and others to consider when exploring the regulatory issues surrounding investments in utility resilience. Further work is needed to develop the evaluative frameworks that allow for strong regulatory review of resilience investments that, in the long run, may deliver more reliable and affordable service for ratepayers.
Between 2009 and 2014, NARUC operated a technical assistance program that served individual state needs for technical assistance.