Best public utilities law books according to redditors

I did above.

Essentially, the avoided costs because distributed PV is on the system add up to be more than the retail rate. In part, this is because marginal costs are higher than average costs. In part, this is because the infrastructure and variable costs associated with generating electricity during the day is higher than at night.

In practice, it requires a very careful, detailed study, with a number of other careful, detailed studies as inputs. The specifics of the utility, the neighboring utilities, the transmission grid, the load shape of the customers, local and regional environmental requirements, expected growth (or decline) of demand, and a variety of other factors affect the Value of Solar study findings.

Value of Solar can find the value to (a) the utility, or (b) society. Generally, the utility has to make decisions based on (a), but legislators make decisions based on (b). So, if net metering is set forth on a public policy basis, you get what you come up with -- "that the value to the country may exceed the retail rate for reasons such as energy independence." But, it's indeed possible that the VoS exceeds retail rate from the perspective of the utility.

> But the above explanation seems to ignore that utilities are businesses like any other

Electric utilities are not businesses like any other, for a few reasons. 1: they are franchises. They are chartered monopolies. Only one wires company. In exchange for having the monopoly, they both (a) have specific obligations that don't apply to other businesses, such as obligation to serve and minimum reliability requirements, and (b) have specific benefits that don't apply to other businesses, such as guaranteed rate of return on prudent investments. Additionally, 2 electric utilities are obligated to sell as much of their product as the customer wants, no matter what. It doesn't matter if the customer twice as much at 3pm as 3am, just like every other customer -- the utility has to have enough infrastructure to serve at 3pm even if that means a bunch of idle equipment at 3am. It has an obligation to serve. To exacerbate the challenge, for retail customers most utilities aren't allowed to charge more for their product at 3pm than at 3am, even though it costs them more to make it! There are few businesses who aren't allowed to increase price when costs go up in expected, season ways. And, 3, electric utilities cannot store their product. They can stock their raw inputs, but they simply cannot store kWh in a warehouse. Even energy storage isn't storing electricity -- bulk electric storage is pumped hydro, but they're storing hydroelectric potential energy; they have to convert that raw input into electricity again later, at the exact moment the customer asks for it, without any pre-agreed upon schedule.

Most electricity sales in tUSA are not from municipal owned utilities. Bonneville and TVA are the largest exceptions, Santee Cooper (SC) is probably third, the Nebraska Public Power authorities a collective fourth, and then there are a bunch of city-owned utilities. These represent maybe 10 percent of electric sales -- the rest come from Investor Owned Utilities (IOUs), which are regulated monopolistic private businesses.^1

Ratemaking for IOUs is done within the confines of the public utility commission (various names in the 49 states that have one).^2 There are a variety of ratemaking principles, first laid out clearly by Bonbright. These principles sometimes conflict with each other -- you want rates to accurately reflect costs, but you want rate structures to be simple. Now, here's the thing that blows the minds of many... utilities don't make any more money if they sell you another kWh of electricity. They don't make any money on variable costs like fuel, wages, or maintenance. They recoup the money they spent, but no more. Utilities make money by getting a defined rate of return on capital investments, typically about 10 percent. This means that utilities do make profits when they build stuff -- generators, new or upgraded wires, newly installed meters in your house, a new computer program to handle billing, even an office renovation. And, here's the crazy thing -- depending on the state, once the amount of money they're owed is determined, the regulators and utilities use forecased sales to determine how much money per kWh sold the utility will get, and never update the forecast! This means that utilities are ever overcollecting or undercollecting on every single investment they've made for which they're still collecting, depending on whether or not their 5-30 year forecasts are correct! Yeah, crazy. It means that sunk costs like investments already made aren't considered in future adjustments to rates. Now, with ratemaking in 49 states, things vary and this generalization has a variety of exceptions to it. The details matter. But ultimately, forward-going ratemaking, if done correctly, will ensure that the utility won't lose money from more distributed PV. They might not be able to make as much as they would have because a specific capital investment they would have gotten to make is no longer needed (and that's good!), but they'll still collect the revenue on existing investments. If the VoS exceeds retail rate, it results in a downward pressure on rates for all customers. If the VoS is less than retail rate, you get an upward pressure. In either case, it's an extremely small impact on non participants bills because the difference between VoS and retail rate is quite low, and because such a small percentage of customers (by sales) have PV. No government will need to step in.

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fn 1. Some may observe that there is competitive electric supply in some places. That's true! Still, the wires company is a regulated monopoly who delivers electricity generated in a competitive wholesale marketplace, so many of the challenges and unique properties of electricity companies remain.

fn 2. PUCs generally don't have jurisdiction over munis. Because Nebraska is 100 percent public power, there is no PUC overseeing electric companies in NE.