Regulatory Process Design for Decarbonization, Equity, and Innovation

The report argues that traditional US public utilities commission (PUC) processes are too slow and restrictive to meet urgent decarbonization and equity mandates. It recommends four primary reforms: setting clear proceeding objectives, expanding stakeholder roles in solution development, reducing information asymmetry by unlocking utility data, and initiating new inclusive processes such as regulatory sandboxes and updated benefit-cost analysis frameworks.

• Traditional PUC processes, including rate cases and planning proceedings, are often too slow to meet the pace of decarbonization required by state statutes or executive orders, with some commissions having only three or four opportunities to review integrated resource plans (IRPs) by 2030.
• Setting clear goals and objectives at the start of a proceeding ensures decisions align with a commission's broader strategy, prevents legal challenges by basing decisions on state law, and keeps proceedings on schedule by defining the scope.
• Nonutility stakeholders face significant financial and procedural barriers to participation; at least 16 states offer some form of intervenor compensation to mitigate these resource constraints, though only six programs appear to be actively in use.
• Information asymmetry exists when utilities restrict access to modeling assumptions and data, which can bias decisions in favor of the utility and potentially delay the closure of fossil fuel plants despite economic cases for doing so.
• To reduce information asymmetry, some commissions in Oregon and New Mexico have required utilities to provide intervenors with licenses to the modeling software used in proceedings.
• Regulatory sandboxes allow utilities and third parties to test innovative business ideas and products in small-scale, low-risk trials with expedited approvals and reduced procedural requirements.
• Connecticut's Innovative Energy Solutions (IES) program is a regulatory sandbox that uses a four-phase process (Ideation, Prioritization, Deployment, and Assessment) to scale innovative grid solutions with a $25M overall budget for the first cycle.
• Maryland is developing a unified benefit-cost analysis (BCA) framework for distributed energy resources (DERs) to ensure consistency in valuing different resources and to align with climate and energy policies.
• The Arizona Corporation Commission disallowed over $200M in cost recovery for the Four Corners Power Plant, citing an "overwhelming asymmetry of information" and the utility's intentional manipulation of resource analysis.

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} }