Climate Change, “Grid Neutrality,” and Electricity Distributors

03 April 2017
By Dr. Jeff D. Makholm

In an upcoming article in the April 2017 issue of the Wiley journal, Natural Gas & Electricity, NERA Managing Director Dr. Jeff D. Makholm examines the various economic principles at work at the intersection of electric utilities and the growing concerns about climate change. First, Dr. Makholm explores whether the local grid is still a natural monopoly—affirming, with the best economic evidence available, that it is. Next, he weighs “grid neutrality” concepts with economies of “scope” when deciding whether local electric utilities should expand beyond providing only local “wires services.” Finally, Dr. Makholm asks who looks out for the long-term interests of local electricity consumers. He concludes that in all of these cases, the wise role for local electric utilities in an era of heavy concern about green energy and climate change is less an abstract than a concrete problem—depending on practical considerations of cost, efficient administration, and useful consumer representation in complicated energy markets.

Makholm, Jeff D. (2017, April). Climate Change, “Grid Neutrality,” and Electricity Distributors. Natural Gas & Electricity 33/9, ©2017 Wiley Periodicals, Inc., a Wiley company.