States Test an Unusual Idea: Tying Electric Utilities’ Profit to Performance
By Emma Foehringer Merchant
When a tropical storm bore down on parts of the East Coast in the late summer of 2020, it spurred tornadoes and flooding and caused 8,800 trees to crash onto power lines. At one point, three-quarters of a million Connecticut residents were without electricity.
Related Knowledge Center: ENERGY BASICS: electricity
Electricity is a secondary energy source: it is generated through the conversion of primary energy sources such as natural gas, coal, solar, hydropower, and wind. Electricity’s versatility is not cost-free: a substantial amount of energy is lost in its generation and the cost of storage is high, compared with fuels such as coal, oil and natural gas. The economics of battery technology hold the key to expanded use of renewable sources to generate electricity.