Rhode Island Issues Report on New Regulatory Framework to Modernize the Grid

Rhode Island was already among the top ten most active states in terms of grid modernization efforts in the third quarter of 2017, and it is now poised to tackle the issue more broadly.  Earlier this month, Rhode Island state agencies issued a grid modernization report entitled Power Sector Transformation: Phase One Report to Governor Gina M. Raimondo.  The report is the result of an inter-agency team made up of staff from the state’s Division of Public Utilities and Carriers, Office of Energy Resources, and Public Utilities Commission.  These agencies were directed by Rhode Island’s governor to develop a more dynamic regulatory framework to enable the state and its major investor-owned utility, National Grid, to advance a cleaner, more affordable, and reliable energy system for the twenty-first century.

The report identifies four overarching recommendations for regulatory reform.  First, the agencies recommend shifting the utility business model to one that relies more upon performance-based compensation and less upon rewarding investments.  This would include, among other things, creating a multi-year rate plan and budget with a revenue cap to encourage cost savings and developing new value-streams associated with a modernized grid (such as the communications network that supports advanced meters).

Second, the agencies recommend the deployment of advanced meters.  The advanced meter roll-out plan must include a proposal to provide third-party access to the advanced meter platform, including plans for how to address privacy and cybersecurity concerns.  To reduce the cost of deploying advanced meters, the utility should share the necessary communication infrastructure through partnerships.

Third, the agencies recommend that the utility begin filing the Infrastructure, Safety, and Reliability Plan and System Reliability Procurement Plan as two linked planning documents each year.  These synchronized plans should include details about distribution system planning forecasts and a stakeholder engagement plan.  The report also suggests that state regulators and policymakers should develop a strategy to compensate the value of distributed energy resources based, in part, on their locations on the distribution system.

Finally, the agencies recommend that the utility advance electrification into new economic sectors that are beneficial to system efficiency and greenhouse gas emission reductions.  This should include electricity rates designed to encourage electric vehicle users to charge their vehicles during non-peak demand times and make their batteries available to the grid.  The utility should also pursue electric heating proposals consistent with the Rhode Island Public Utility Commission’s white paper on beneficial electrification.

The report recognizes that implementation of these changes will take time and occur through a variety of regulatory vehicles.  However, it notes several opportunities in the coming year for Rhode Island to begin pursuing these reforms, such as National Grid’s distribution rate case filing expected next month, as well as the next Infrastructure, Safety, and Reliability Plan, System Reliability Procurement Plan, and Energy Efficiency Plans.

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California Public Utilities Commission Report Predicts 50% Renewable Power by 2020

On Monday, the California Public Utilities Commission (CPUC) released its 2017 Renewables Portfolio Standards (RPS) Report, an annual progress report on the state’s RPS Program.  California’s RPS target is one of the most ambitious in the country, requiring the state’s investor owned utilities, publicly owned utilities, and other electricity retail sellers to procure 50% of their total electric retail sales from eligible renewable energy resources by 2030.  As interim targets, the RPS Program required California’s electricity retail sellers to serve 25% of their load with RPS-eligible resources by December 31, 2016, and will require them to serve 33% of their load with RPS-eligible resources by 2020.

The 2017 Annual Report concludes that California’s three investor-owned utilities are well positioned to meet the RPS Program’s requirements.  All three exceeded the 25% renewable target for 2016, and are projecting that they will reach the 50% renewable target by 2020—an entire decade early.

In addition, the report concludes:

  • California’s electrical corporations met the 25% RPS requirement for 2016 and, in many cases, substantially exceeded this requirement.
  • The large investor-owned utilities have executed renewable electricity contracts necessary to exceed 2020’s 33% RPS requirement.
  • The investor-owned utilities’ aggregated forecast project that they will meet the 2030 RPS requirement of 50% by 2020.
  • Community Choice Aggregators* and small and multi-jurisdictional utilities** report compliance with current RPS requirements, and forecast that they will meet or exceed 2020’s 33% RPS requirement.
  • The RPS Program has helped achieve large reductions in cost for renewable electricity: between 2008 and 2016, the price of utility scale solar contracts reported to CPUC have gone down 77%, and between 2007 and 2015 reported prices of wind contracts have gone down 47%.

 

* CPUC defines Community Choice Aggregators as local government agencies that purchase and develop power on behalf of residents, businesses, and municipal facilities within a local jurisdiction.

** CPUC defines small and multi-jurisdictional utilities as those having a customer base of 30,000 or fewer that serve customers across multiple states.

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Latest 50 States of Grid Modernization Report Released

Last week, the North Carolina Clean Energy Technology Center (NCCETC) released its third quarter 50 States of Grid Modernization report (Q3 Grid Modernization Report).  Following on NCCETC’s first and second quarter reports, the Q3 Grid Modernization Report notes that during the third quarter of 2017, 33 states plus D.C. engaged in at least one policy or deployment action related to grid modernization, utility business model and rate reform, energy storage, microgrids, and demand response. The States of New York and California and the Commonwealth of Massachusetts were the most active of the group.

The Q3 Grid Modernization Report, among other things summarizes:

  • state studies and investigations into energy storage, grid modernization, demand response and/or rate reform in which some action occurred during the third quarter of 2017 (19 states and D.C.);
  • proposed changes to utility planning processes, state-level market access regulations, and wholesale market rules (15 states and 4 ISO/RTOs), including certain states’ directive to its utilities to consider non-wire alternatives;
  • proposed and implemented reforms of rate designs, regulatory structures, and utility business models (12 states and D.C.), including decoupling mechanisms, time-varying rates, and dedicated tariffs for customers with energy storage systems;
  • developments in grid modernization policies (20 states), including energy storage targets and interconnection standards, rules regarding advanced metering infrastructure, and cost recovery mechanisms;
  • financial incentives at the state (7 states) and federal level, including incentives for energy storage; and
  • deployment of advanced grid technologies (21 states), including projects related to advanced metering infrastructure, smart grid components, microgrids and energy storage.

Relatedly, last month, NCCETC’s released its third quarter 50 States of Solar report (Q3 Solar Report).*  The Q3 Solar Report notes that 41 states and the D.C. engaged in at least one action related to distributed solar policy during the third quarter of 2017.

 

*The Q3 Solar Report’s Executive Summary may be downloaded for free, but there is a charge to access the full report. NCCETC has offered to provide complimentary copies of the full report to “policymakers and regulators (limited to federal and state legislators and staffers, utility commissioners, utility commission staff, state consumer advocate office staff, and state energy office staff) and students (for academic purpose only).” The Executive Summary includes information on whom to contact to obtain a complimentary copy.

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EPA Extends Comment Deadline for Clean Power Plan Rollback, Will Hold Public Hearing

On November 8, 2017, the Environmental Protection Agency (EPA) issued a notice extending the deadline for comment on its proposed rollback of the Clean Power Plan by 32 days.  Interested parties will now have until January 18, 2018, to submit comments.  In the meantime, the agency will convene a public hearing on the proposal in Charleston, West Virginia on November 28 and 29.

In October, EPA announced plans to roll back the regulations, citing its belief that the Clean Power Plan is inconsistent with Section 111 of the Clean Air Act because its emissions guidelines for existing power plants can only realistically be met through generation-shifting, such as replacing fossil fuel generation with renewable resources rather than through use of emissions reductions equipment.

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Federal Agencies Issue Climate Science Special Report

Last week, the U.S. Global Change Research Program (USGCRP) released a report entitled Climate Science Special Report: Fourth National Climate Assessment, Volume I (NCA4).  USGCRP consists of thirteen federal departments and agencies, including the Department of Energy, EPA, the Department of Transportation, NASA, the Department of Defense, and the Department of State.  It is required by the Global Change Research Act of 1990 to develop “a comprehensive and integrated United States research program which will assist the Nation and the world to understand, assess, predict, and respond to human-induced and natural processes of global change.”  The last USGCRP assessment was released in May 2014, making NCA4 the first report issued under the Trump Administration.

NCA4 provides an updated analysis of how climate change is currently affecting the weather and climate of the United States as well as projections of the future impacts of climate change.  The report concludes that “it is extremely likely that human influence has been the dominant cause of the observed warming since the mid-20th century.  For the warming over the last century, there is no convincing alternative explanation supported by the extent of the observational evidence.”

The report notes several climate trends that have occurred over the past century and that are expected to continue.  Global average temperature has increased more than 1.2 degrees Celsius for the period of 1986-2016 compared to 1901-1960, and without significant reductions in the emissions of greenhouse gases, temperatures could increase to 5 degrees Celsius above pre-industrial levels by the end of this century.  Temperature and precipitation extremes have also become more common in the past century, and this trend is expected to continue as global temperature increases.  At the same time, oceans have become warmer and more acidic, and sea levels have risen by seven to eight inches since 1900.

NCA4 reports that stabilizing global temperatures to less than 2 degrees Celsius above pre-industrial levels will require substantial reductions in net CO2 emissions prior to 2040 and likely will require net emissions to become zero or even negative later this century.  Although emission growth rates have slowed in recent years, this trend is not sufficient to limit the increase in global temperatures to below 2 degrees Celsius.

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