Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Date of Graduation

Spring 2012

Document Type


Degree Name

Master of Science (MS)


Department of Integrated Science and Technology


Numerous references found in the academic and trade literature discuss the availability and applicability of certain technologies and policies to allow the U.S. electrical grid to address the future challenges of continued growth and aging infrastructure. However, the existing utility companies seem reluctant to adopt these new measures. This thesis will describe some of these strategies and develop a model using Stella system dynamics software that will explore the potential financial impact to the utilities from using these strategies in combination. The four strategies to be investigated are feed in tariffs, time of use rates, distributed generation, and demand-side energy efficiency . There are other strategies that could be considered such as Renewable Portfolio Standards, Net Metering, Critical Peak Pricing, and Renewable Energy Tax Credits. These other strategies are either similar in implementation to the four discussed in this paper or have been shown to not have lasting affect on the utility industry's bottom line. For this reason, the four listed above have been chosen. From the research and the test case data used in this paper, the following findings were observed: Distributed Generation will most likely not be implemented without some true incentive to the owner and without a policy such as Feed-In Tariffs. Energy Efficiency practices can significantly reduce electrical consumption. Specific technologies have very attractive payback or return on investment and others are not practical when only taking into account ROI measurements. Peak Shifting or Peak shaving can have significant effect on the utility's profit but has no effect on the consumer's electricity bill. Time of Use rates have very different effects on the utility. Depending upon the cost structure of their generation and the nature of its customer load, the TOU rate can significantly reduce the profit of the utility even without Peak Shifting. The biggest positive impact for society as a whole would be a policy that lowers electrical consumption, decreases the release of greenhouse gases, and allows the utility to remain a viable business. The combination of strategies that offers this impact would be the use of Peak Shifting with no TOU rates, demand-side Energy Efficiency, and the implementation of a FIT for photovoltaic generation.



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