Advanced Energy Perspectives

Does your state have a renewable portfolio standard or an energy efficiency resource standard? Have your electric utilities had their revenue decoupled from volume of electricity sales? How do your state’s policies stack up with the rest of the country? Do you even know what these policies mean?

AEE now has everything you need to know about key state energy policies. It’s all on PowerPortal, your one-stop shop for high-value information on key energy sector participants, utility programs and energy data in each state. See this alongside other data already in the PowerPortal, including utility structures, schedules for key renewable energy and energy efficiency proceedings, time varying rates programs, and much, much more! PowerPortal is part of AEE’s PowerSuite. Sign up for a free trial here.

In the meantime, here are 10 tidbits on Renewable Portfolio Standards, Energy Efficiency Resource Standards and revenue decoupling to get you started! 

Back in January, we published a list of the top 10 utility commission issues to watch in 2015. With 2015 half gone, we check in on the top issues facing utility commissions. Note: some links in this post reference documents in DocketDash, BillBoard or PowerPortal, applications in AEE's software platform, PowerSuite. Click here and sign up for a free 14-day trial of PowerSuite.

1. New York’s ‘Reforming the Energy Vision’

New York, in its comprehensive Reforming the Energy Vision Proceeding (REV), is determined to redefine the role of the utility and overhaul the utility business model, and that process is marching forward. In its Track One Order issued in February, the NY PSC approved a Distributed System Platform (DSP) model, wherein the utilities will be responsible for managing markets for distributed energy resources (DER). The order also significantly limits utility ownership of distributed solar, wind, and battery storage and increases the standard interconnection cap from 2 MW to 5 MW. On July 1, the PSC is expected to release the Track Two Straw Proposal, which will focus on such crucial matters as financial drivers for utilities - in other words, how they make money.

The times they are a-changin’. There have been a lot of discussions around the country of late about the regulatory changes needed to create a 21st century electricity system. New business models are needed to integrate higher levels of distributed energy resources, take advantage of new technologies, meet environmental goals, and address changing customer needs and expectations. In an industry that has been slow to change historically, there is a lot at stake for utilities, advanced energy companies, and consumers. In order to understand what transformations are needed, it’s first necessary to understand how electric utilities make money today.

It’s not the way most companies do. Electric utilities are monopolies, so they have to be carefully regulated in order to protect the interests of their captive customers. 

At most times of the year, much of the electricity generating capacity in the United States stands idle. In fact, on average we use less than half of the available capacity.That’s because the electric power system is built to handle demand at its peak - those few sweltering summer days when everyone’s AC is running full blast. What utilities pay for power at those times of peak demand drives up the price we pay for electricity around the clock and all year long. One way to reduce spikes in demand is with rates that vary by time of use. By pricing electricity higher at times when demand typically peaks, consumers large and small have an incentive to reduce their electricity use when it matters most to the power grid - reducing the costs of the system overall.

Note: some links in this post reference documents in DocketDash, BillBoard or PowerPortal, applications in AEE's energy policy software platform, PowerSuite. Click here and sign up for a free 14-day trial of PowerSuite.

In 1932, only three utility holding companies controlled almost half of the investor-owned utilities around the country. In response to the Great Depression and the ensuing antitrust government crackdown, the Public Utility Holding Company Act of 1935 was passed by Congress in order to limit the size of utility holding companies and to keep the regulated entities separate from their unregulated affiliates. That law was repealed with the Energy Policy Act of 2005, which cracked open the door for consolidation of the utility industry. Now, that door has swung wide open.