THE DISTRIBUTED UTILITY - A NEW ELECTRIC UTILITY PLANNING AND PRICINGPARADIGM

The distributed utility concept provides an alternate approach to guid e electric utility expansion. The fundamental idea within the distribu ted utility concept is that particular local load increases can be sat isfied at least cost by avoiding or delaying the more traditional inve stments in central generation capacity, bulk transmission expansion, a nd local transmission and distribution upgrades. Instead of these inve stments, the distributed utility concept suggests that investments in local generation, local storage, and local demand-side management tech nologies can be designed to satisfy increasing local demand at lower t otal cost. Critical to installation of distributed assets is knowledge of a utility system's area- and time-specific costs. This review intr oduces the distributed utility concept, describes an application of AT S costs to investment planning, discusses the various motivations for further study of the concept, and reviews relevant literature. Future research directions are discussed.