State Utility Commissions Investigate Grid Modernization

Posted on March 10, 2016 by Anjali Patel

UPDATED 02.21.2017 with Minnesota e21 Phase II report.

Grid modernization is a hot-button topic that is being discussed nationwide.  In several states, the utility commissions have opened formal investigations and/or are developing plans to implement grid modernization activities.  Included among those are:

Following the enactment of General Assembly bills June Special Session, Public Act No. 15-5 and Public Act No. 15-113, in September 2015 DEEP initiated two proceedings to seek public comment on issues related to: (1) grid-side system enhancement demonstration projects; and (2) a two-year shared clean energy facility pilot program.

  • California, Public Utilities Commission (CPUC), Docket No. R.14-08-103, Rulemaking Regarding Policies, Procedures and Rules for Development of Distribution Resources Plans Pursuant to Public Utilities Code Section 769.

Widely regarded as one of the states that is most aggressively pursuing grid modernization, California, through Assembly Bill No. 327 (AB 327), directed its investor-owned utilities to file distribution resource plans (DRPs) that “identify optimal locations for the deployment of distributed resources” (e.g. distributed renewable energy, energy efficiency, energy storage, electric vehicles, and demand response technologies). The CPUC, which under AB 327 is required to review and approve, or if needed, modify, the DRPs, instituted a rulemaking in August 2014 to guide utilities in the development of and review processes for the DRPs.  The CPUC is currently reviewing the utilities’ DRPs and is conducting workshops on related issues.

  • District of Columbia, Public Service Commission (DC PSC), Formal Case No. 1130, Investigation into Modernizing the Energy Delivery Structure for Increased Sustainability (MEDSIS).

In June 2015, the DC PSC instituted a proceeding to identify technologies and policies that can modernize the District’s energy delivery system for increased sustainability and that will make the District’s system more reliable, efficient, cost-effective, and interactive.  The DC PSC is in the process of conducting workshops related to its investigation.

  • Hawaiʻi, Public Utilities Commission (Hawaiʻi PUC), Docket No. 2014-0192, Instituting a Proceeding to Investigate Distributed Energy Resource Policies.

Following the issuance of a white paper entitled “Commission’s Inclinations on the Future of Hawaii’s Electric Utilities; Aligning the Utility Business Model with Customer Interests and Public Policy Goals,” the Hawaiʻi PUC instituted in August 2014 an investigation into the distributed energy resource policies of the islands’ utilities: Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc., Maui Electric Company, Limited (collectively, the HECO Companies), and the Kauai Island Utility Cooperative.  Through this docket, the Hawaiʻi PUC has been investigating modernization-related issues including time-of-use rate proposals.

  • Massachusetts, Department of Public Utilities (Mass DPU), Investigation by the Department of Public Utilities on Its Own Motion into Modernization of the Electric Grid.

An early leader in the grid modernization movement, the Mass DPU commenced an investigation into grid modernization in October 2012.  After an investigation stage and issuing a straw proposal based on stakeholder recommendations, in June 2014 the Mass DPU directed each public utility operating in Massachusetts to develop and implement a 10-year grid modernization plan that makes measurable progress towards: (1) reducing the effects of outages; (2) optimizing demand, which includes reducing system and customer costs; (3) integrating distributed resources; and (4) improving workforce and asset management.  The Mass DPU is currently in the process of receiving comments and holding hearings on those plans.

  • Minnesota, Public Utilities Commission (MN PUC), Proceeding E999/CI-15-556, In the Matter of the Commission Investigation into Grid Modernization.

In 2014, the 21st Century Energy Regulatory Reform Initiative (e21), a multi-stakeholder policy initiative funded by the Energy Foundation, the Joyce Foundation, Xcel Energy, and Minnesota Power, conducted an assessment of the current and future prospects of Minnesota’s energy delivery system.  In December 2014, e21 released its Phase I report detailing specific consensus recommendations for statutory and regulatory actions to shift the utility business model “toward one that offers customers more options in how and where their energy is produced and how and when they use it” and to shift the regulatory systems toward performance-based compensation.  The Phase II report, which was released in December 2016, is available here.  Following e21’s initiative, in May 2015 the MN PUC commenced an inquiry into electric utility grid modernization with a focus on distribution planning.  The MN PUC has been holding a series of associated stakeholder meetings.

Pursuant to a directive from the New Hampshire Legislature, House Bill 614, the NH PUC commenced its investigation on July 30, 2015.  House Bill 614 implemented goals from the state’s 10-year energy strategy which was developed by the New Hampshire Office of Energy & Planning.  As a first step, the NH PUC is conducting an information gathering proceeding “to give stakeholders a chance to learn about grid modernization and to explore to what extent that grid modernization is workable in New Hampshire.”  After an initial comment period, the NH PUC staff is in the process of hiring a technical gird modernization expert and a facilitator/moderator to help manage the investigation.

  • New York, Department of Public Service (NY DPS), Case No. 14-M-0101, Proceeding on Motion of the Commission in Regard to Reforming the Energy Vision (NY-REV).

Leading one of the most widely discussed and involved grid modernization efforts, the New York Public Service Commission (NY PSC) officially instituted the NY-REV proceeding in April 2014. NY-REV is an outgrowth of New York Governor Cuomo’s State Energy Plan and earlier Commission investigations.  NY-REV is split into two parallel tracks: Track One is focused on issues related to developing a Distributed System Platform framework, and Track Two is focused on regulatory changes and ratemaking issues.  NY DPS staff issued a straw proposal for Track One issues in August 2014, and a white paper related to Track Two issues in July 2015.  As the working groups and NY DPS staff continue to consider the tracked issues, the NY PSC has also been instituting offshoot proceedings to address issues such as the future of nuclear energy, clean energy standards, and large scale renewable energy development in New York.

Posted in Blog Posts | Tagged , , , | Comments Off on State Utility Commissions Investigate Grid Modernization

Oregon Passes Law to Phase Out Coal by 2030, Increase Reliance on Renewables

Posted on March 8, 2016 by Amber Martin

UPDATED 3.14.2016 to reflect Governor Kate Brown’s signing of the bill

In an historic move, last Wednesday, March 2, 2016, the Oregon Senate Oregon has passed enacted the Clean Energy and Coal Transition Act, also known as SB 1547, directing retail distribution utilities within the state to eliminate reliance on coal-fired generation by 2030.  While SB 1547 is still awaiting Oregon Governor Kate Brown’s signature before it becomes law, a press release from the Oregon Legislature describes the bill as a “priority” for the Governor.

Once finalized, SB 1547 will make Oregon Governor Kate Brown signed the bill into law on March 10, 2016, making Oregon the first state in the U.S. to require the elimination of coal-fired power by statute.  Back in January, New York Governor Andrew Cuomo announced his intent to phase out coal in the Empire State by 2020, but the New York legislature has yet to take any action toward that goal.  In a statement, Governor Brown applauded the bill, noting, “[n]ow, Oregon will be less reliant on fossil fuels and shift our focus to clean energy. I’m proud to sign a bill that moves Oregon forward, together with the shared values of current and future generations.”

SB 1547 also paves the way for a community solar program in the state and calls on retail electric utilities to increase their reliance on renewable energy.  The bill requires its largest utilities to meet 50% of electricity demand with renewables by 2040, more than double the 20% requirement under Oregon’s current renewable portfolio standard (RPS).  The reforms provide a “safety valve” excusing non-compliance with the new RPS requirements where doing so would compromise electric reliability.

Posted in Blog Posts | Tagged , , | Comments Off on Oregon Passes Law to Phase Out Coal by 2030, Increase Reliance on Renewables

Status Quo Continues for MATS

Posted on March 3, 2016 by Anjali Patel

Earlier today Chief Justice Roberts denied the application of parties seeking a stay of the Mercury and Air Toxics Standard.  Acting alone, the Chief Justice issued his decision less than 24 hours after the EPA, other states, and utilities each filed responses asking the Chief Justice to reject the application.  The Supreme Court rules allow the applicants to renew their request with another Justice (or multiple other Justices if such a renewal is denied); however, because the CPP stay was supported by both the Chief Justice and the late-Justice Scalia, it is unlikely that a renewal, if sought, would be granted.

Posted in Blog Posts | Tagged , , | Comments Off on Status Quo Continues for MATS

Seventeen Governors Undertake Energy Modernization Initiatives

Posted on March 3, 2016 by Jessica Bell

The governors of seventeen states recently signed the Governors’ Accord for a New Energy Future.  This bipartisan initiative will help with diversification of generation sources, including expanding clean energy generation, and the infrastructure needs to accommodate these changes.  The accord describes a “bold vision of the nation’s energy future,” with commitments including:

  • Diversifying energy generation and expanding clean energy sources.  Efficiency and conservation can be the fastest, most reliable, and often cheapest way to meet energy needs.
  • Modernizing energy infrastructure.  Grid modernization is important to give consumers control over energy use, promote reliability, and integrate renewable and energy efficiency technologies.
  • Encouraging clean transportation options. The use of electric vehicles and alternative fuel vehicles lessens dependence on petroleum and reduces pollution.  Consumers should have choices in this area.
  • Planning for energy transition.  States can share best practices and lessons learned as they implement improvements.
  • Working together to make transformational policy changes.  Collaborative processes include the streamlining of infrastructure siting, setting renewable and energy efficiency standards, and diversifying energy portfolios.
  • Helping secure a stronger national energy future.  Partnerships among states and between states and the federal government can drive lasting energy improvements.

Signatories include the governors of California, Connecticut, Delaware, Hawaii, Iowa, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington.

Posted in Blog Posts | Tagged , , | Comments Off on Seventeen Governors Undertake Energy Modernization Initiatives

What is Grid Modernization?

Posted on March 1, 2016 by Jeff Bayne

In the background of news about the Clean Power Plan, and the energy sector more broadly, lurks a ubiquitous but sometimes nebulous phrase: grid modernization. What exactly is grid modernization?  Clearly it involves modifications and updates to the electric grid, but what makes these changes so transformative?

Today’s electric grid and related policies are still based largely on a traditional model in which the utility is the primary decision maker who plans for, generates or purchases, and then delivers energy to meet the demands of retail customers. Customers’ involvement is limited to using, and of course paying for, this energy.  While there have certainly been advances in the past decades, especially in the wholesale world (including the development of regional wholesale markets, the implementation of open access transmission policies, and the introduction of standardized interconnection procedures), the entire industry—both the wholesale and distribution sides—is in the process of undergoing a fundamental transformation.  New technology and policy developments are disrupting the traditional model and creating a greater and more active role for energy consumers and a need for infrastructure upgrades and changes.

One of the main technological developments has been the emergence of Distributed Energy Resources (DERs). While there is not a universally agreed-upon definition of DERs, they are generally smaller power generators located close to the loads they serve (in contrast to large, centralized generation typical under the traditional model).  DERs can include rooftop solar, small wind turbine systems, energy storage, and behind-the-meter generators.  While DERs offer benefits, such as allowing for increased use of renewable generation and greater customer autonomy over energy choices, integrating these decentralized resources into the grid also raises technical, economic, and policy challenges.  Net metering is one current example, with states across the country grappling with how to compensate retail consumers who generate power back into the grid.  In the future, the emergence of electric vehicles, and the corresponding need for charging stations, will raise new questions about generating, distributing, and storing energy.

Policy changes are also giving energy consumers a greater role to play in the grid. Compensation for demand response (recently in the news as the Supreme Court upheld FERC’s demand response rule) allows energy consumers to be paid for curtailing their consumption during periods of high energy demand. In addition, efforts to reduce carbon emissions (such as through the CPP and the Paris Climate Agreement) are changing the resource portfolio of the United States. The increased reliance on variable renewable energy, such as solar and wind power, further necessitates grid modernization.

Given the myriad of interconnected technological, policy, and legal challenges, grid modernization will require the coordination of a diverse range of actors. The Department of Energy is currently undertaking the second installment of its Quadrennial Energy Review, which “will develop a set of findings and policy recommendations to help guide the modernization of the nation’s electric grid.” Beginning tomorrow in Austin, TX, the Department of Energy is holding a series of Regional Workshops seeking feedback on grid-related technical challenges and emerging policy issues.

Posted in Blog Posts | Tagged , , , , | Comments Off on What is Grid Modernization?