Utility of the Future

The increasing penetration of distributed energy resources (DER)—rooftop solar, customer owned generation, battery storage, energy efficiency, demand response and others—raises fundamental questions about market design, distribution planning, resource acquisition, and the traditional role of utilities. DER can significantly disrupt utility revenue recovery under traditional usage based pricing; create reliability challenges for managing distribution system operations; and lead to a need for more investments in smart grid technologies. In the extreme, the primary responsibility of utilities could shift from merely acquiring and delivering electricity to managing transactive electricity markets as distribution system platform providers, as envisioned in New York’s Reforming the Energy Vision.