Completing the Energy Innovation Cycle: The View from the Public Utility Commission

Achieving widespread adoption of innovative electricity generation technologies involves a complex system of research, development, demonstration, and deployment, with each phase then informing future developments. Despite a number of non-regulatory programs at the federal level to support this process, the innovation premium—the increased cost and technology risk often associated with innovative generation technologies—creates hurdles in the state public utility commission (“PUC”) process. These state level regulatory hurdles have the potential to frustrate federal energy goals and prevent the learning process that is a critical component to technology innovation. This Article explores how and why innovative energy technologies face challenges in the PUC process, focusing on case studies where PUCs have approved or denied utility proposals to deploy high cost, first-generation energy technologies. This Article concludes with an outline of possible strategies to address PUC concerns by allocating the innovation premium beyond a single utility’s ratepayers.