Now that California has AMI, what can the state do with it?

Chi Keung WOO, E. KOLLMAN, R. ORANS, S. PRICE, B. HORII

Research output: Contribution to journalArticle

50 Citations (Scopus)

Abstract

Recognizing the lack of retail-demand response, a state regulator, such as the California Public Utilities Commission (CPUC), seeks tariff proposals that transmit wholesale price signals to a local distribution company's (LDC) retail customers. To enable these proposals, the CPUC has authorized funding for advanced metering infrastructure (AMI) for two investor-owned LDCs. Assuming regulatory approval of the third LDC's application, the state's US$4.28 billion AMI investment will aid new rate designs for 11.3 million electricity customers. Now that California has AMI, what can the state do with it? With AMI in hand, an LDC can implement service options that can further the state's energy initiatives, ranging from resource adequacy requirement (RAR) to greenhouse gas (GHG) emissions reduction. These options can efficiently allocate limited capacity based on each customer's willingness to pay, without the unnecessary distinction between price rationing and reliability differentiation. They can be Pareto superior, welfare dominating the default tariffs that apply to these customers. A case in point is the generalized demand subscription service (GDSS) option proposed in this paper. However, it is unclear whether the option will find wide customer acceptance, without an LDC's intensive customer education and marketing efforts. Copyright © 2008 Elsevier Ltd. All rights reserved.
Original languageEnglish
Pages (from-to)1366-1374
JournalEnergy Policy
Volume36
Issue number4
DOIs
Publication statusPublished - Apr 2008

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Advanced metering infrastructures
infrastructure
Public utilities
willingness to pay
Gas emissions
Greenhouse gases
Electron energy levels
marketing
Marketing
Industry
electricity
greenhouse gas
Electricity
Education
education
resource
energy

Citation

Woo, C. K., Kollman, E., Orans, R., Price, S., & Horii, B. (2008). Now that California has AMI, what can the state do with it? Energy Policy, 36(4), 1366-1374. doi: 10.1016/j.enpol.2007.12.018

Keywords

  • Electricity
  • Advanced metering
  • Rate design