The Regulation of District Energy Systems

District energy systems are promoted as a way to provide low carbon heat and hot water. In  British Columbia, most systems are “public utilities” and regulated by the BC Utilities Commission (BCUC) unless the services are provided by a local government.

This paper examines nine diverse systems, four under BCUC jurisdiction and five regulated by municipalities, to elicit the type and level of economic regulation that can encourage financial sustainability while providing customers with reasonably priced energy services. 
 
DE systems can have a number of environmental and community advantages, and, if properly designed, constructed and regulated can be cost effective.
 
Nonetheless, proponents need to appreciate the plethora of risks associated with any start-up utility. DE systems require a high up front investment and for some systems, energy sales are  lower than expected; this combination can lead to operating losses or deferral accounts that are larger than anticipated. 
 
Read more about District Energy Systems here: http://www.toolkit.bc.ca/tool/district-energy-systems
 
Author: Peter Ostergaard
Publisher: Pacific Institute for Climate Solutions
May, 2012
Resource type: 
Sector: 

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