AN ADAPTIVE APPROACH TO PROMOTE SYSTEM OPTIMIZATION

This research paper proposes a flexible framework for electricity policy in a hypothetical "51st State," focusing on system optimization across affordability, reliability, and environmental performance. It outlines modernized principles for rate design and market structure that accommodate the rise of distributed energy resources (DERs) and smart-grid technologies, arguing that these innovations challenge the traditional view of utilities as natural monopolies.

• The author proposes that electricity system optimization should be centered around three universal goals: affordability, reliability, and environmental performance.
• Technological advancements in distributed generation (DG), energy efficiency, and on-site storage are making grid defection a rational choice for consumers and increasing the elasticity of electricity demand.
• Modern rate design should prioritize cost causation, where bills vary based on the time and intensity of a customer's use of system services, reflecting real and social costs.
• The paper argues that the traditional "natural monopoly" status of distribution utilities is challenged by information technology, DERs, and energy storage, which allow for multilateral energy transactions and increased customer control.
• To foster innovation in nascent technologies that cannot yet compete on price, the author suggests a "staircase capabilities market" consisting of small-volume, long-term requests for proposals (10–20 years) to provide consistent investment signals.
• The framework recommends that system operators use Integrated Distribution Plans (IDPs) and Integrated Resource Plans (IRPs) to ensure long-term procurement matches system needs and to determine the capacity for reliable distributed generation on each circuit.
• For vertically integrated utilities, the paper suggests performance-based regulation where profits are tied to quantitative goals for reliability, affordability, and environmental performance set five to seven years in the future.
• Transparency in energy procurement is essential for market entrants to understand value propositions; the author advocates for the adoption of the U.S. Department of Energy's Green Button data disclosure protocol.

APA

O’Boyle, M. (n.d.). AN ADAPTIVE APPROACH TO PROMOTE SYSTEM OPTIMIZATION. Energy Innovation. https://energyinnovation.org/wp-content/uploads/2015/04/51st-State_APP_Energy_Innovation_Submission.pdf

Chicago

O’Boyle, Michael. AN ADAPTIVE APPROACH TO PROMOTE SYSTEM OPTIMIZATION. Energy Innovation, n.d. https://energyinnovation.org/wp-content/uploads/2015/04/51st-State_APP_Energy_Innovation_Submission.pdf.

Wikipedia

{{cite report |last1=O’Boyle |first1=Michael |title=AN ADAPTIVE APPROACH TO PROMOTE SYSTEM OPTIMIZATION |publisher=Energy Innovation |url=https://energyinnovation.org/wp-content/uploads/2015/04/51st-State_APP_Energy_Innovation_Submission.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{oboylendadaptive, author = {O’Boyle, Michael}, title = {{AN ADAPTIVE APPROACH TO PROMOTE SYSTEM OPTIMIZATION}}, institution = {Energy Innovation}, url = {https://energyinnovation.org/wp-content/uploads/2015/04/51st-State_APP_Energy_Innovation_Submission.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }