The NC Clean Energy Technology Center has released its 50 States of Grid Modernization Report for the first quarter of 2017. This is the first report in what will be an ongoing quarterly series. Grid modernization is a broad term referring to efforts to use new technologies and policies to make the electric system more interactive and responsive, and this report catalogues grid modernization efforts at the state level. Specifically, the report covers “(1) smart grid and advanced metering infrastructure, (2) utility business model reform, (3) regulatory reform, (4) utility rate reform, (5) energy storage, (6) microgrids, and (7) demand response.” It does not include actions related to pumped hydroelectric storage projects, electric vehicles, or distributed generation customers (although this last topic is covered in a separate report).
The 50 States of Grid Modernization Report tracks states’ “actions,” which it defines as proposed legislation (which may ultimately be signed into law, be defeated, or remain pending) and regulatory dockets, cases, and rulemaking proceedings. These actions must be statewide, and the report only tracks those actions related to investor-owned utilities (meaning that municipal utilities and cooperatives are not included in this report). The report found that 37 states and the District of Columbia have engaged in at least one grid modernization action in the first quarter of 2017. The report groups these actions into six categories:
- Studies and Investigations. In the first quarter of 2017, sixteen states and D.C. undertook investigations related to grid modernization issues, including broad grid modernization proceedings in Illinois and Ohio. Legislators in Colorado, Maryland, and New Jersey proposed bills to require studies of energy storage, and proposed legislation in Hawaii would require an independent third party to establish initial grid modernization plan.
- Planning and Market Access. The report notes that twelve states considered changes to the utility planning process and state regulations pertaining to market access; six of these states considered changes to their integrated resource planning process, while three states focused on distribution system planning.
- Utility Business Model and Rate Reform. Thirteen states took eighteen actions related to reforming utility rate design, regulatory structures, or utility business models. Half of these actions related to time-varying rates.
- Financial Incentives for Energy Storage and Advanced Grid Technologies. Eleven states had 25 actions ongoing or under consideration relating to grid modernization financial incentives. Notably, during the first quarter of 2017 Maryland became the first state to enact a tax credit for energy storage.
- Deployment of Advanced Grid Technologies. In the first quarter of 2017, there were 36 pending or decided proposals from state legislators or utilities to deploy advanced grid technologies. Over half of these instances involved advanced metering infrastructure and over half of U.S. households have advanced metering technology. By comparison, there were seven proposed deployments of energy storage projects.
- Grid Modernization Policies. This is somewhat of a catchall category, which includes policies such as energy storage targets, clean peak standards, and advanced metering infrastructure rules. The report found that sixteen states took 29 actions on grid modernization policies during this time.
