Regulatory Process Design for Decarbonization, Equity, and Innovation

This RMI report provides recommendations for modernizing the regulatory processes of state public utilities commissions (PUCs) in the United States to accelerate the transition to a decarbonized and equitable electric grid. It identifies four primary areas for reform: setting clear proceeding objectives, expanding stakeholder roles in solution development, reducing information asymmetry through data transparency, and initiating new inclusive processes such as regulatory sandboxes and updated benefit-cost analysis frameworks.

• State public utilities commissions (PUCs) face significant organizational barriers that hinder the transition to a decarbonized energy system, including outdated mandates, staff constraints, gaps in technical expertise, and a culture of risk aversion.
• Defining clear goals and objectives at the start of a proceeding ensures decisions align with broader regulatory visions and state laws, while helping to keep proceedings on schedule by clarifying the scope.
• Nonutility stakeholders often face resource and procedural barriers to participation; at least 16 states offer some form of intervenor compensation to mitigate these constraints, though only six programs appear to be actively in use.
• Information asymmetry between utilities and other stakeholders can bias regulatory decisions in favor of utilities, particularly when stakeholders lack access to modeling assumptions and data needed to verify forecasts and resource planning.
• To reduce information asymmetry, some commissions require utilities to provide intervenors with licenses to the same modeling software used by the utility, as seen in Oregon and New Mexico.
• Regulatory sandboxes are procedural mechanisms that allow utilities and third parties to test innovative business ideas and products in low-risk, small-scale trials with expedited regulatory approvals.
• Connecticut's Innovative Energy Solutions (IES) program is a regulatory sandbox that uses a four-phase process (Ideation and Screening, Prioritization and Selection, Project Deployment, and Assessment and Scale) to test grid solutions.
• Maryland has updated its benefit-cost analysis (BCA) for electric vehicle (EV) programs to include a jurisdiction-specific test, a market-wide test, and assessments of non-participating ratepayer impacts.
• The Arizona Corporation Commission disallowed over $200 million in cost recovery for Arizona Public Service (APS) after determining that the utility had intentionally manipulated resource analysis to hide the economics of the Four Corners Power Plant.

APA

Becker, J., Ciulla, J., Felder, C., & Gold, R. (2022). Regulatory Process Design for Decarbonization, Equity, and Innovation. RMI. https://rmi.org/app/uploads/dlm_uploads/2022/07/regulatory_process_design_for_decarbonization_equity_and_innovation.pdf

Chicago

Becker, Jacob, Jessie Ciulla, Cory Felder, and Rachel Gold. Regulatory Process Design for Decarbonization, Equity, and Innovation. RMI, 2022. https://rmi.org/app/uploads/dlm_uploads/2022/07/regulatory_process_design_for_decarbonization_equity_and_innovation.pdf.

Wikipedia

{{cite report |last1=Becker |first1=Jacob |last2=Ciulla |first2=Jessie |last3=Felder |first3=Cory |last4=Gold |first4=Rachel |title=Regulatory Process Design for Decarbonization, Equity, and Innovation |publisher=RMI |date=July 2022 |url=https://rmi.org/app/uploads/dlm_uploads/2022/07/regulatory_process_design_for_decarbonization_equity_and_innovation.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{becker2022regulatory, author = {Becker, Jacob and Ciulla, Jessie and Felder, Cory and Gold, Rachel}, title = {{Regulatory Process Design for Decarbonization, Equity, and Innovation}}, institution = {RMI}, year = {2022}, month = jul, url = {https://rmi.org/app/uploads/dlm_uploads/2022/07/regulatory_process_design_for_decarbonization_equity_and_innovation.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }