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and regulated charges (i.e., tariffs or rates) for elec- val meters) enable detailed monitoring of electricity
tricity services. withdrawals and injections and therefore facilitate
more efficient prices and charges. Without more ac-
• To establish a level playing field for all resources, curate consumption and injection data from all cu-
cost-reflective electricity prices and regulated char- stomers, it is impossible to capture the full value of
ges should be based only on what is metered at the electricity services.
point of connection to the power system — that is,
the profile of injections and withdrawals of electric • Flat, volumetric tariffs are no longer adequate for
power at a given time and place, rather than the today’s power systems and are already responsible
specific devices behind the meter. In addition, cost- for inefficient investment, consumption, and opera-
reflective prices and regulated charges should be tional decisions.
symmetrical, with injection at a given time and place
compensated at the same rate that is charged for • Peak-coincident capacity charges that reflect
withdrawal at the same time and place. users’contributions to incremental network costs
incurred to meet peak demand and injection, as
• Increasingly affordable information and communi- well as scarcity-coincident generating capacity
cations technologies (e.g., advanced meters or inter- charges, can unlock flexible demand and distri-

research spanning engineering, science, economics, and des of experience in advising governments, corporations,
policy, as well as real-world input from stakeholders in in- and institutions on regulation and market design. In addi-
dustry, government, and nongovernmental organizations. tion, we tapped industry stakeholders and other market
This is the work of the MIT Energy Initiative’s Low-Carbon participants to contribute insights from their real-world
Energy Center for Electric Power Systems Research. experience.
The research revealed that in order to ensure that distribu-
How is the electric power systems center addressing ted and centralized energy resources are integrated effi-
these research challenges? ciently, electric power systems in the United States, Euro-
The center draws upon MIT’s extensive existing research pe, and other parts of the world will need major regulatory,
capability in a broad range of relevant fields—from po- policy, and market overhauls.
wer system modeling to market and regulatory design, Going forward, the center will be analyzing potential po-
and from cyber security to power systems technology—to licy and regulatory changes while also tackling many of
advance a system-level understanding of the power sec- the other impacts and opportunities likely to emerge from
tor and the transformation it is undergoing. the greater decarbonization, decentralization, and digiti-
The center develops new methodological approaches, zation of the power system. These include the challenge
in-depth policy evaluations, and advanced modeling and of understanding how new and emerging technologies
analysis tools to represent the complex and dynamic be- can be effectively integrated into existing power structu-
haviors of power systems. The goal is to make justified, res. Since wind and solar aren’t entering the system in the
insightful assessments of how such systems will evolve same way in Massachusetts as in New Delhi, for example,
over time and to determine how regulatory and policy in- we are looking at the system’s evolution within a plethora
novations can facilitate the transformation to a decarbo- of contexts.
nized power sector. We are also developing a variety of technical and econo-
mic modeling tools as well as new market theories to ad-
Can you provide an example of the kind of research dress the system’s extraordinary complexity. In sum, we
currently under way at the center? are working to devise strategies that will enable cleaner,
The Utility of the Future report (see appropriate box) relea- more reliable, and more cost-effective power system so-
sed in December 2016, is a great example of the in-depth lutions in the future.
research going on here. Developed over several years in
collaboration with the Institute for Research in Technology
at Comillas Pontifical University, Utility of the Future provi- This interview, carried out by Kathryn O’Neill, appeared in the
des a toolkit for businesses, policymakers, and regulators Autumn 2017 issue of Energy Futures, the magazine of the MIT
to navigate the unfolding changes in electric power sy- Energy Initiative. We are grateful to the authors for their permis-
stems and develop robust, efficient alternatives. sion to reprint it.
The study paired research in quantitative economic and
engineering modeling with a sophisticated understanding Read the current issue at http://energy.mit.edu/energyfutures/
of the complex interactions that characterize the electric
power industry. The team included MIT faculty with deca-

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