Ring-Fencing the Power Envelope of History's Second Most Important Invention of All Time
65 Pages Posted: 16 Dec 2016
Date Written: 2015
Abstract
Electricity is the last regulated industry in the U.S., and there is radical change occurring in the regulatory paradigm. Electricity accounts for several hundred billion dollars in annual transactions which even exceed the total amount of corporate income taxes collected in the U.S. annually.
States are promoting more renewable energy in a different location on the customer side of the utility power meter. There is a new regulatory model to deliver this power. Proponents of this new emerging model of regulation assert that this will diversify democratic and distributed sources of power, accelerate a transition to more renewable resources, while positively changing the role of the utility. Critics counter that this will allow the more affluent customers to step away from shouldering a fair proportion of the social cost of providing the important invention at the core of the modern American economy. Legal change has consequences. This change legally ring-fences new policy incentives, winners and losers.
Long-established precedent require the allocation of costs and benefits of electricity service in a manner that is “fair and equitable,” “not unduly preferential,” “just and reasonable,” and “non-discriminatory” among consumers. This article examines these legal changes now occurring in the regulatory model, and the consequences for law and the social order. The article analyzes each of the three primary regulatory tools employed in the U.S. now to fundamentally change the dynamics of energy supply and use, and recent law suits which have called into question the constitutionality and legality of what is occurring.
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