The inherent variability of generation from renewable sources, such as wind and solar power, may 1) increase the operating costs associated with additional ramping requirements, and 2) increase the amount of installed conventional generating capacity needed to maintain the operating reliability of a network. The additional system costs for both of these factors can be mitigated by providing additional services from, for example, controllable loads and storage capacity. This presentation uses a case study to demonstrate that these services are not adequately compensated by typical regulatory practices. The proposed solution to this problem is to develop a hierarchical structure for operating and managing networks that will make it easier to control the increased uses of distributed energy resources that are likely to provide many of the new services needed to maintain system reliability in the future. This tele-seminar is based on on-going projects with PSERC and the Consortium for Electric Reliability Technology Solutions.