Chapter 9: The Regulatory Environment

The electric regulatory environment is as inevitable as the electricity market. Informed observers are certain that the electric power industry will continue to be regulated, albeit reregulated in fundamentally different ways than in the recent past. Electric regulators will set rules that provide the operational and financial framework for interation between the local monopoly distributionelectric utility company ('Disco') and customers in their franchised service territories. The incentives provided to Discos, and the rules by which they play, will be prime determinants of the pace and scale of deployment of distributed generation (DG). Electric regulators will provide the forum and make the decisions that could, at one end of the spectrum, lock grid-connected DG out of themarket, or, at the other end, throw the doors open for rapid deployment of a wide array of DG.