The California Public Utilities Commission (PUC) has announced its intent to restructure the electricity industry in this state. The primary objective of this report is to investigate whether small customers will have a reasonable opportunity to benefit from industry restructuring. While it is not possible to predict whether small consumers will benefit from restructuring, the report investigates whether there are plausible scenarios under which small consumers are likely to benefit. In particular, it analyzes the extent to which the requirement of real-time pricing (RTP) to participate directly in wholesale markets is likely to limit individual small consumers from potentially enjoying benefits from a competitive market.

Resource planning and policy must consider impacts on the quality of our environment. Economic theory offers both a basis for environmental policy—the allocation of resources based upon individuals’ willingness to pay—and instruments for achieving policy goals, for example emissions taxes and pollution trading systems. This paper points out some of the shortcomings of an economic-based approach, particularly when used as the basis for environmental policy. It calls for a shift to an approach in which sustainability is emphasized.

Recent years have been characterized by a major transition in public policy regarding economics, the environment, and human well-being—particularly, the application of economic principles to environmental policy and the insertion of ecological principles into economic affairs. This article explores the evolutionary character of this transition and the contention in which it is often embroiled, such as debates over externalities valuation, discounting, and monetization. It then describes the PoleStar project and how it addresses the complex social, economic, and ecological interactions that will underpin human development in the twenty-first century.

Originally published in Olav Homeyer and Richard Ottinger, eds., Social Costs of Energy: Present Status and Future Trends (New York: Springer, 1994), 373-404.