Advanced Energy Perspectives

In September, we published a post on the top 10 utility commission issues of 2016 so far, but action on utility regulations has continued in the months since. In this year-end post, we look at 10 key actions taken by state public utility commissions (PUCs) in 2016. These actions affected everything from rate design for distributed energy resources to data access to grid modernization. More broadly, they all point the way toward a modern electric power system for the 21st century, even if getting there is by fits and starts.

Virtually every industry is transforming to incorporate data strategically, and the information age has finally arrived in the electric utility industry. With the deployment of smart meters now approaching 50% of all electric meters, utilities are collecting massive amounts of granular data. The question is, how can utilities best utilize all of this data and make it available—and useful—to customers and third parties?

Energy storage is a game changer. Ultimately, it could free the electric power system from matching generation and consumption on a minute-by-minute basis, saving electricity until it’s needed. Policymakers, utilities, and customers are beginning to recognize its value. Doug Little, chair of the Arizona Corporation Commission, summed up the potential of behind-the-meter (BTM) storage this way: “Energy storage technology is really the 'secret sauce’ for the future of residential rooftop solar.” At AEE, we agree, but add that it could be the secret sauce for numerous other applications - on both sides of the meter. That makes energy storage a key  technology for modernizing the energy grid and leading to an advanced energy future.

Back in January, we published a list of the top 10 public utility commission issues to watch in 2016. With 2016 heading into the home stretch, we check in on the top issues facing utility commissions so far this year. Not surprisingly, the challenges PUCs are grappling with are all over the map: sweeping changes in utility business models, utility M&A, grid modernization, rate design, smart meter data access, demand charges for residential customers, energy storage, electric vehicle charging infrastructure, to name a few. Here is a status check of the Top 10 matters before PUCs to date.  

The growth in distributed energy resources (DER) is enabling consumers to take charge of their energy use, while providing new tools for a more affordable, reliable, and clean grid. But the increased adoption of DER has not come without controversy. Rate design issues, from net metering to fixed-charge fees and everything in between, are popping up with increasing frequency across the country. We at Advanced Energy Economy (AEE) have been at the forefront of these conversations in a variety of different arenas—most recently leading a collaborative discussion with utilities and other key stakeholders in New England around rate design for a DER future, and our ongoing involvement in New York as part of the Reforming the Energy Vision (REV) proceeding, most recently focusing on Value of DER/Successor to Net Energy Metering discussions—grappling with these issues and convening stakeholders to establish a dialogue on the best way forward. Our affiliate, AEE Institute, also convened public utility commissioners at forums in the Midwest and Mid-Atlantic regions to discuss distribution system planning to modernize the electricity grid.

Last November, the National Association of Regulatory Utility Commissioners (NARUC) jumped into the ring and created a Staff Subcommittee on Rate Design to address  the challenges inherent in a rapidly changing electricity system. The first order of business, as stated by NARUC President Travis Kavulla, was to develop a manual to assist jurisdictions in navigating the challenges, considerations, and policy developments related to the increase in DER on the grid. Following an initial round of comments, which AEE participated in, to inform the subcommittee on what to include in the manual, NARUC issued a draft manual on DER Compensation on July 21 and convened a town hall meeting two days later, during the Summer NARUC meeting in Nashville, to receive public input. On September 2, AEE submitted comments on the draft manual, applauding NARUC and President Kavulla for developing a solid first draft, while encouraging them to make additional improvements before the final version is released in November.