Ah, "incentives."

I recommend that writers and speakers in our industry be very careful with the term "incentives."  Strictly speaking, "incentives" comprise both the negative (fines and penalties) and the positive (rewards).  An "incentive" for the utility can be "Carry out a micro-grid policy or we will revoke your franchise to serve" (negative) or "If you would please implement our micro-grid policy, we will give you a 100-basis-point increase in your return on equity."

The problem is that "incentives" in our regulated industries too often are asymmetrical—they are rewards for carrying out an obligation, rather than penalties for failing to carry out an obligation.  If you have a franchised monopoly that refuses to do the right thing unless it gets more money, then granting the money is legal bribery; it is not an efficiency driven incentive.

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