by Raya Salter
With huge investments needed to modernize the electricity grid, it’s imperative that all parties at interest have a voice both in determining the rules by which utility improvements are judged and ensuring that the environmental and efficiency promises of the smart grid are achieved.
ithin the last decade, several states, including Illinois, began considering or adopting laws and regulations to enable utility investment in smart grid technologies. The Electricity Infrastructure Modernization Act of 2011 (EIMA) ushered in $3.2 billion in smart grid investments for the Illinois utilities, Commonwealth Edison (ComEd) and Ameren Illinois (Ameren). EIMA produced the largest electric infrastructure investment Illinois utilities will have made in a generation. The law was the product of negotiations and collaboration between several stakeholders, including the two utilities and consumer advocates. Ultimately, EIMA mandated performance rates, including express metrics for success, designed to ensure that the investments deliver consumer benefits within a 10-year time frame.
by Scott Hempling
Microgrids can enhance security and local control for discrete locations on the larger interconnected electric grid. The relationships and mutual responsibilities of the microgrid and the external grid need to be carefully defined, however. Here is a framework for doing just that.
icrogrid policy, if carried out cost-effectively, offers two distinct benefits: democratization of demand, allowing consumers to custom-design their own services; and diversity of suppliers, allowing consumers to choose providers based on their merits. Whether these benefits emerge will depend on how well state legislatures and commissions resolve questions about market structure, customer responsibility and utility compensation. This article identifies the main questions, along with the legal and economic principles necessary to answer those questions.
by Hon. Carla J. Peterman and Melicia Charles
By legislation and regulatory decision, California has recognized that its long-term clean energy and environmental goals are not likely to be met absent a viable storage economy. Regulators have set forth an open, flexible process intended to lead to that result.
I. The Changing Needs of California’s Electric Infrastructure
alifornia energy policy supports an ambitious transition from conventional fossil generation to renewable and other clean resources. Policies such as the state’s 33 percent Renewable Portfolio Standard, zero net energy goals, the Governor’s Zero Emission Vehicle Plan, and now energy storage targets are positioning the state to attain this future. Imbedded in this vision is the expectation that California will achieve these policy goals while promoting greater efficiency, reliability, affordability, and increased safety.
by Scott Hempling
On customer responsibility for infrastructure costs, the NRDC-EEI Joint Statement has it right; but it errs in failing to insist that keepers of the network and providers of new services be chosen based on merit, not incumbency.
n the 20th century, state law protected electric utilities from competition, leaving customers no choice but to buy from vertically integrated monopolies. Regulators based investor-owned utilities’ profits more on kWh sales and asset growth than on efficiency and innovation.
By John Domagalski, Lev Goldberg, and James Hua
Innovative pricing plans in retail choice markets can help customers better manage price and budget volatility over time. And, though past results are no guarantee of future performance, some pricing plans have proved more stable and lower cost than others.
key benefit of competitive retail electric markets is that they offer commercial, industrial, and other business and government customers an ever growing range of choices of contract duration and pricing plans. These customers can select contracts that range from monthly to annual to multi-year agreements and can choose among a number of widely available pricing plans. Pricing plans readily available include “Fixed Price,” “Index,” and “Blended.” In a fixed price plan customers lock-in a set rate for a defined period of time, whereas customers on an index plan pay a variable hourly ‘index’ price for their electricity. A blended pricing plan fixes the price for a defined percentage of energy usage while allowing the remainder to ‘float’ on the hourly index. These innovative options – many of which are not available in traditionally regulated states – have given customers, in competitive retail markets, unprecedented flexibility to align their energy cost strategy with corporate goals, budgets and business planning horizons.