The distributed utility: A new electric utility planning and pricing paradigm

The distributed utility concept provides an alternate approach to guide electric utility expansion. The fundamental idea within the distributed utility concept is that particular local load increases can be satisfied at least cost by avoiding or delaying the more traditional investments in central generation capacity, bulk transmission expansion, and local transmission and distribution upgrades. Instead of these investments, the distributed utility concept suggests that investments in local generation, local storage, and local demand-side management technologies can be designed to satisfy increasing local demand at lower total cost. Critical to installation of distributed assets is knowledge of a utility system's area- and time-specific costs. This review introduces the distributed utility concept, describes an application of ATS costs to investment planning, discusses the various motivations for further study of the concept, and reviews relevant literature. Future research directions are discussed.