Advanced Energy Perspectives

Extreme weather. Spiking natural gas prices. Peak levels of electricity use that push the grid to its limit. Our energy system faces a growing set of challenges, and our utilities and their regulators have to make big infrastructure and investment decisions today to solve those challenges. But even with a growing number of advanced energy technologies and solutions available – including those on the demand-side – many electric utilities just want to build more natural gas-fired power plants. We think there is a better way. Here’s how utilities – and one utility in particular – can use rates, incentives, and technology to manage energy use and save customers money.

With 2022 more than halfway through, AEE returns with the latest edition of its biennial top utility regulatory trends roundup. Utility regulatory commissions across the country have been off to a busy start, navigating supply chain hurdles, inflationary pressures, extreme weather events, and the accelerated adoption of clean energy technologies. With PowerSuite, AEE’s policy tracking platform, we cut through the noise to provide insights on the trends shaping utility regulation this year and in years to come.

Note: some links in this post reference PUC filings and other documents in AEE's software platform, PowerSuite. Click here and sign up for a free trial. PowerSuite – policy tracking by policy professionals.

On March 16, the New York Public Service Commission quietly adopted a significant advancement in rate design. It did so as a result of a long proceeding on standby and buyback rates, in which AEE argued that owners of distributed generation not eligible for net metering (such as standalone storage facilities and institutions with combined-heat-and-power systems) were being overcharged for the customer-specific components of those rates. While the PSC action seemingly addressed a technical matter, the impact is a big win for advanced energy in New York, as it will lead to new rates much more favorable for a range of distributed energy resources (DERs).

On September 17, 2020, FERC issued Order 2222, directing the grid operators under its jurisdiction to pave the way for aggregations of distributed energy resources (DERs) into wholesale markets. Recognizing that implementation of Order 2222 requires transmission and distribution system coordination and active engagement from state utility regulators as well, AEE and GridLab convened distribution utilities and AEE members for eight months to build consensus around key distribution system issues. The focus areas of the discussion included interconnection and aggregation review; communications, controls, and coordination; dual participation in both retail programs and wholesale markets; and investment recovery and cost causation. The result is a new understanding of the challenges in making DER participation in wholesale markets work, and ways that utilities, regulators, and industry can work together to overcome them.