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

Chi-Keung WOO*, E. Kollman, R. Orans, S. Price, B. Horii

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    54 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.

    Original languageEnglish
    Pages (from-to)1366-1374
    Number of pages9
    JournalEnergy Policy
    Volume36
    Issue number4
    DOIs
    Publication statusPublished - Apr 2008

    Scopus Subject Areas

    • Energy(all)
    • Management, Monitoring, Policy and Law

    User-Defined Keywords

    • Advanced metering
    • Electricity
    • Rate design

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