Phil Carson, columnist for Intelligent Utility Daily, interviews a David O’Brien from Bridge Energy Group on regulatory changes to support grid modernization.
The knottiest issue is how to balance risk between ratepayers and shareholders when you look at smart grid investments. […] We’re not going to let ratepayers bear this risk.
It’s a conundrum for the industry as a whole. Traditional rate-making methodology is a cost-plus exercise in which the utility gets its investment back plus a rate of return set by regulators. It was established many decades ago and premised on investment in largely stable, known commodities (poles & wires as compared to digital switches and advanced IT).[…]
IU: Which stakeholders could or should drive these sorts of changes?
O’Brien: That is the question, the heart of the matter. […] I’ve given this some thought and the best I can come up is that industry—the smart grid industry—could probably do more, along with the investor-owned utilities, to find some way to be more constructively engaged with the regulatory community.
See on www.intelligentutility.com