Advanced Energy Perspectives

For nearly two full years, the state of Michigan has been debating its energy future. Just before Memorial Day, legislators finally took a committee vote on a comprehensive package of legislation that would have a dramatic impact on the state’s electric power system. With the legislature now adjourned for the summer, there is still much to be determined: The House has its own package and work remains to be done on the Senate floor. Much progress has been made thus far to improve these bills and provide greater market certainty for advanced energy companies. What else is needed comes down to priorities. Advanced Energy Economy and the Michigan Energy Innovation Business Council (Michigan EIBC) have four we consider key to an advanced energy future for Michigan.

We’ve blogged several times over the last two years on New York’s landmark Reforming the Energy Vision (REV) proceeding, which seeks to fundamentally reorient the way electric utilities are regulated in New York State. We have been strong supporters of this effort and, along with our state and regional partners, Alliance for Clean Energy New York and the Northeast Clean Energy Council, have filed comments at nearly every opportunity. Back in 2014, we blogged that The Devil is in the Details and later reviewed some of those details when the Department of Public Service issued its Track 2 White Paper. We also weighed in on benefit-cost analysis and, most recently, utility-solar collaboration on the future of net metering and compensation of distributed energy resources (DER). Truly, there is virtually no aspect of the regulatory framework that is not up for consideration in REV.

The details of what utility regulation will look like in New York just got clearer, when the Public Service Commission (PSC) issued its Track 2 Order on May 19. This Order addresses the fundamental issue of the utility revenue model as well as certain aspects of rate design. While there are many details still to be worked out (the Order is mainly about the framework and process), the PSC has formalized some bold ideas for how the utility business model will evolve in order to keep up with changing technology, evolving customer needs, and state energy and environmental goals.

There are lot of hot topics in energy these days, but perhaps none more so than net energy metering (NEM). This simple rate design allows customers with onsite generation (usually rooftop solar, but also other technologies, like fuel cells and small wind systems) to send excess electricity onto the grid and spin their meters backwards. At the end of the month, the customer receives either a bill or a credit, depending on whether there was net excess generation in that month. This makes owners of distributed generation happy - and makes utilities nervous.

Although NEM clearly sets out what distributed generation (DG) customers get paid for their electricity, it does not fully answer the question of what that DG is worth, not only to that customer but to all the other customers who depend on the grid. That’s exactly what New York’s Public Service Commission asked for comment on in the latest round of filings under its “Reforming the Energy Vision” proceeding. In response, AEE Institute, and its state and regional partners engaged in that proceeding, submitted a proposal for setting the balance between deploying distributed energy resources (DER) and maintaining the grid for all. What’s the not-so-secret formula? LMP+D. For what that means, read on.  

As an ambitious proceeding intended to revolutionize the electricity marketplace in New York State, “Reforming the Energy Vision,” has generated a lot of filings, but none more noteworthy than the one submitted last week by New York’s six investor-owned utilities and three solar development companies – all members of AEE. Under the name of the Solar Progress Partnership, utilities including ConEdison and National Grid joined with SolarCity, SunEdison, and SunPower on a filing that put forth a framework for the transition from the current full-retail value of net metering to the REV-envisioned future of a new system of compensation for distributed energy resources (DER). Though it did not sign on to the filing, AEE Institute facilitated the discussions that led to this landmark statement between sometime industry antagonists over the issue that most divides them.

As the legislature returns to Columbus this month, energy is expected to be among the topics of debate. Will opponents of advanced energy send a signal to investors and developers that the state remains hostile territory to 21^st century technologies by extending the current legislative freeze, or does the state reboot the advanced energy marketplace by reinstituting the RPS and EERS, or similar programs? That’s what’s at stake in lawmakers’ choice between continuing a “freeze” of key energy programs and a thaw that would allow Ohio to return to advanced energy progress.