Advanced Energy Perspectives

At regulated utilities across the United States, energy efficiency efforts are driving down energy usage and saving money for ratepayers. The Consortium for Energy Efficiency estimated that utilities spent $4.5 billion on these programs in 2011, resulting in residential electricity savings of over 14 TWh per year, equivalent to the consumption of 1.25 million U.S. homes. These savings have been achieved primarily by providing incentives for one-time technology investments, such as more efficient appliances or better windows, lighting and HVAC systems. But technology is not the only way to save energy.

As electric vehicles (EVs) start to take hold in the marketplace, one obstacle to wider acceptance remains: range anxiety. That’s the concern that your electric car might run out of juice before reaching your destination – or the nearest charging station. To compete on par with gasoline-powered vehicles, whose drivers’ range anxiety is relieved by gas stations located on street corners, in service areas, and by highway exits, EVs will need a similar infrastructure of charging stations – at home, on the road, and at workplaces.

Recent and ongoing regulatory proceedings on net metering highlight the role of state Public Utility Commissions (PUCs) in setting the terms of advanced energy growth in the United States. 

Net metering — which is offered in over 40 states — requires utilities to credit households and businesses that install small distributed generation systems (such as solar, wind, biogas, fuel cells, small hydro, combined heat and power, and others) for the surplus electricity that they generate. Despite variation in policy design between states, net metering is credited with accelerating the deployment of distributed generation (DG), particularly residential solar photovoltaic (PV) systems. While the incentive level and certain policy design elements (such as caps on total net-metered capacity within a state or utility service territory) are usually set by statute, other key components are determined by PUCs in regulatory proceedings, typically involving extensive stakeholder comment.

Who sets utility rates in each state? Who approves – or disapproves – billions of dollars in utility infrastructure investment year in and year out? Who determines whether utilities are meeting their energy efficiency mandates? Who clears a path for advanced energy technologies and services to help consumers get secure, clean, affordable energy – or keeps barriers in the way?

The answer to all these questions: Public Utility Commissions.

On May 23rd, the AEE Institute held its first Public Utility Commission (PUC) Forum. These gatherings are part of our PUC Engagement Program, and for this first time out we partnered with the New England Conference of Public Utilities Commissioners (NECPUC) and AEE’s regional partner, the New England Clean Energy Council (NECEC), to bring together regulators and senior staff from around the region to talk about how advanced energy technologies could – and should – reshape the utility landscape. With six commissioners and 12 senior staff from five New England States (MA, NH, VT, RI and ME) participating, it was a big success.