AEE Addresses Seven Issues in Power System Reform

AEE Releases Issue Briefs to Guide U.S. Electric Power System Reform

Seven new briefing papers for utilities, regulators, and stakeholders build on lessons from grid modernization and utility business model reform efforts across the country

Washington, D.C., September 14, 2017 — Today, national business organization Advanced Energy Economy (AEE) released a set of briefs on topics before utilities and regulators as they modernize the U.S. electric power system. Offered as a resource for regulators, policymakers, and other interested parties as they tackle issues in the rapidly evolving electric power regulatory and business landscape, this set of short papers looks at the current landscape for each issue, considers the alternatives available for gaining the most benefits for customers and the distribution grid from power sector evolution, and offers guidance for successful regulatory reform on seven cutting-edge topics. 

“The U.S. power system is undergoing foundational change as we shift to a system that is more efficient, reliable, and resilient while meeting customers’ needs for secure, clean, and affordable energy,” said Lisa Frantzis, senior vice president, 21^st Century Electricity System at AEE. “We hope these briefs will help regulators, policymakers, and other interested parties leverage advanced energy technologies and innovative business solutions to give us a 21^st century power grid.”

These AEE 21^st Century Electricity System issue briefs, which can be downloaded free of charge here, cover the following topics:

• Distributed Energy Resource (DER) Ownership: Emerging roles for regulated utilities and third-party providers lays out issues associated with ownership of DER (such as solar, wind, combined heat and power, energy storage, demand response, and energy efficiency) in the context of a changing utility system, addresses potential questions that policymakers and regulators will have to grapple with, and makes recommendations on the path forward.
  
• Rate Design for a DER Future: Designing rates to better integrate and value distributed energy resources presents objectives and principles to guide rate designs for better integrating and valuing DER, describes the pros and cons of various rate designs, and makes recommendations on a long-term framework that maximizes the benefits of distributed resources for customers and the electricity system as a whole.
  
• Performance-Based Regulation (PBR): Aligning utility incentives with policy objectives and customer benefits describes this emerging regulatory approach, which puts greater emphasis on utility performance against well-defined outcomes, provides various performance incentive design options, and lays out steps to implement PBR.
  
• Energy Efficiency as a Resource: The power of getting more from less shares the challenges and opportunities for energy efficiency in the context of the evolving grid, describes several potential obstacles and questions that utilities and regulators should consider, and makes recommendations on the path forward.
  
• Optimizing Capital and Service Expenditures: Providing utilities with financial incentives for a changing grid addresses regulatory incentives that favor capital investment over operating expenditures, which can be less costly for customers, and reviews regulatory approaches for putting capital and service spending on an even playing field.
  
• Advanced Metering: Connectivity for the modern grid looks at advanced metering infrastructure (AMI) and advanced metering functionality (AMF) and how they can provide benefits to our electricity grid, describes potential challenges utilities and regulators have to grapple with in implementation, and makes recommendations on how to meet the varying needs of utilities and their customers.
  
• Access to Data: Bringing the electricity grid into the information age presents why and how access to data is integral to enabling a high-performing modern grid, examines questions that utilities and regulators should consider in implementing improved data access for customers and third-party service providers that seek to meet their needs, and makes recommendations for improvement.
  

AEE and the AEE Institute, its nonprofit charitable affiliate, are engaged in utility regulatory and business model reform efforts across the country. These include New York’s “Reforming the Energy Vision” (REV) proceeding, and grid modernization efforts in California, Michigan, Minnesota, Ohio, Rhode Island, and beyond. To help accelerate the transition to a high performing electricity system, AEE Institute has also hosted eight CEO forums bringing together policymakers and senior executives from utilities and advanced energy companies to develop common visions for action. The Institute has also worked with leading state public utility commissioners to co-host seven regional forums for state public utility commissions, with agendas focused on topics selected by commissioners, to explore issues presented by changes in technology and markets, as well as a recent forum on distribution system planning in Michigan.    

“To transition to a 21st Century Electricity System, we need to redefine regulatory frameworks and utility business models in order to create new opportunities for third-party providers and customers to benefit from and contribute to the operation of the electricity system,” said Frantzis. “These briefs can help to inform the conversation that will lead to a stronger, more flexible electricity system that is responsive to customer needs and desires.”

About Advanced Energy Economy
Advanced Energy Economy is a national association of businesses that are making the energy we use secure, clean, and affordable. Advanced energy encompasses a broad range of products and services that constitute the best available technologies for meeting energy needs today and tomorrow. AEE’s mission is to transform public policy to enable rapid growth of advanced energy businesses. AEE and its State and Regional Partner organizations are active in 27 states across the country, representing more than 1,000 companies and organizations in the advanced energy industry. Visit AEE online at www.aee.net.