White certificate trading: A dying concept or just making its debut? Part I: Market status and trends

Energy-saving certificate trading programs within the U.S. have not had the success of their counterparts abroad due to the energy efficiency reduction targets not being stringent enough to incite trading. Programs exist in Italy, Denmark, France, the UK and Australia, and each is unique in what it allows to qualify, its units, and other details. The Italian market is the most robust in terms of volumes traded, but programs in Australia are strong and growing.     

White certificate trading: A dying concept or just making its debut? Part III: Future market potential in the U.S.

Challenges to white certificate markets are formidable, but they are not insurmountable, as demonstrated by successful white certificate schemes worldwide. This article discusses the future potential for these certificates in the U.S. A promising development that could affect implementation of a white certificate-type instrument is the inclusion of an instrument called an emission rate credit in the proposed Clean Power Plan. Other potential drivers include energy efficiency resource standards and voluntary markets.     

Alternative ratemaking in the US: A prerequisite for grid modernization or an unwarranted shift of risk to customers?

With increasing frequency, investor-owned electric utilities are requesting preferred cost recovery for “grid modernization” in multiple forms, from multi-year rate plans to riders. Utilities’ claims that massive grid investment is necessary, and that exceptional investment requires exceptional cost recovery, are typically accepted by policymakers with little challenge. It is difficult for policymakers to resist the siren call of grid modernization’s perceived outcomes, from improved reliability and resilience to reduced risks to safety and new customer technology adoption (electric vehicles, distributed energy resources, and more). This paper provides a contrarian viewpoint that is virtually absent as policymakers consider alternative ratemaking practices. It introduces the possibility that excess grid investment in the name of modernization is not only possible, and economically harmful, but has already occurred, encouraged by alternative ratemaking. It provides examples of common grid modernization expenditures the authors have identified as cost-ineffective in the course of their work. It also describes traditional grid planning practices with proven ability to address changing requirements over time, calling into question the need for exceptional grid modernization investment plans. Most important, the paper explains the moral hazard inherent in alternative ratemaking, and the fundamental shift in ratemaking risks and responsibilities from utilities to customers that results. The perspectives this paper presents are critical for policymakers to understand before adopting, extending, or expanding alternative ratemaking practices in their respective jurisdictions.