State Electricity Regulatory Policy and Distributed Resources: Distribution System Cost Methodologies for Distributed Generation

Designing and implementing credit-based pilot programs for distributed resources distribution is a low-cost, low-risk opportunity to find out how these resources can help defer or avoid costly electric power system (utility grid) distribution upgrades. This report describes implementation options for deaveraged distribution credits and distributed resource development zones. Developing workable programs implementing these policies can dramatically increase the deployment of distributed resources in ways that benefit distributed resource vendors, users, and distribution utilities. This report is one in the State Electricity Regulatory Policy and Distributed Resources series developed under contract to NREL (see Annual Technical Status Report of the Regulatory Assistance Project: September 2000-September 2001, NREL/SR-560-32733). Other titles in this series are: 1) Accommodating Distributed Resources in Wholesale Markets, NREL/SR-560-32497; 2) Distributed Resources and Electric System Reliability, NREL/SR-560-32498; 3) Distribution System Cost Methodologies for Distributed Generation, NREL/SR-560-32500; 4) Distribution System Cost Methodologies for Distributed Generation Appendices, NREL/SR-560-32501.