Electricity Policy

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The Net Metering Riddle

The Net Metering Riddle

By Karl R. Rábago

Net metering opponents have done a masterful job in casting the debate around mistaken assumptions. As regulators conduct NEM 2.0 and Value of Solar proceedings, those errant assumptions should be exposed and the real questions addressed.

 

A

fter 25 years in the electric utility rate-making business, I have come to the conclusion that most rate “fairness” can be better understood if you keep this old math riddle in mind:

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Are Regulators’ Heads in the Cloud?  Primary Challenges to Utility Adoption of Cloud-Based Solutions

Are Regulators’ Heads in the Cloud?  Primary Challenges to Utility Adoption of Cloud-Based Solutions

By Brien Sheahan, Elizabeth McErlean, and Anastasia Palivos

While companies like Amazon, Google, Netflix and Uber are using the cloud and IoT to disrupt entire industries, offering dynamic pricing and services, utilities are lagging behind. As the energy landscape evolves, regulators must consider whether the technical and functional merits of the cloud can create value for utilities and ratepayers.

I.  Introduction 

I

ncreasingly, unregulated businesses are adopting cloud-based information technologies to improve service while leveraging back-office scale and security to generate greater value for consumers and shareholders.  Burdened by outdated accounting rules that incentivize investments in legacy technology, cloud adoption by public utilities is relatively low due in large measure by the failure of regulators to consider forwarding looking policies.  As the electricity grid evolves, cloud-based services will become necessary to manage a smarter, more efficient, and more distributed network and regulators will have to overcome antiquated views regarding how we think about rate-base and cybersecurity.

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An Economist’s Dilemma: To PV or Not to PV, That Is the Question

An Economist’s Dilemma: To PV or Not to PV, That Is the Question

By Ahmad Faruqui

In seeking to reduce $500 monthly utility bills in the most economic way, this Californian found himself engaged in an odyssey of the mind. Why couldn’t I accept the subsidy rooftop solar offers utility customers in a high-cost state? Could I do as well simply pursuing energy efficiency?
D

uring the past 12 months, my wife and I paid up to $500 a month for our combined electricity and gas bills during some summer and winter months.  The annual average was $300 a month.  The high bills hit the pocketbook hard.  But they also caused angst.

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The Policy Aspects of Benefit-Cost Analyses for Distributed Solar Generation and Net Metering

The Policy Aspects of Benefit-Cost Analyses for Distributed Solar Generation and Net Metering

 By Charles J. Cicchetti

Based on the analyses here, rooftop solar should be expanded and NEM practices continued.  If utilities propose another path, state regulators should carefully weigh the reasonable alternatives, including the one presented here.

I. Introduction

T

he purpose of Benefit-to-Cost Analysis (BCA) is to formulate and instruct policies.  Good BCA are objective, but seldom sufficient or determinative.  The first step in a BCA is perhaps the most critical because this is where the policies are defined and assumptions that constrain policy choices are made.  This discussion focuses on two rather interdependent policies related to incentives to increase rooftop solar generation and a relationship, not always uniformly defined, between customers that invest in solar generation on their premises and the utility that has the capability and the duty to distribute electricity from the grid to that customer.

Click here to view article as fully-formatted PDF file.

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Cybersecurity: IT vs. OT, and the Pursuit of Best Practices

Cybersecurity: IT vs. OT, and the Pursuit of Best Practices

 By Paul Feldman and Dan Hill

In a cyber environment, where new threats to our power systems emerge daily, the processes, systems, and compliance frameworks we employ for protection, detection, and recovery must constantly evolve as well.

I. Introduction

P

reviously, we have written on the subjects of “A New Responsibility for Boards of Directors: Cybersecurity”[1], and on “Cyber-Risk, Standards, and Best Practices”[2].  The former was an effort to assist Boards of Directors in their thinking and approach to cybersecurity.  The latter was a discussion of risk and the need for the industry to pursue cybersecurity best practices as a superior objective to simply being compliant.  Here we offer thoughts related to future directions for compliance, as well as a specific best practice whose time has come.

Click here to view article as fully-formatted PDF file.  

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Electricity Daily

FERC pulls waivers it granted AEP, FE, after Ohio PUC approved plant subsidies

FERC pulls waivers it granted AEP, FE, after Ohio PUC approved plant subsidies

April 29, 2016—Late Wednesday, in a move few outside Ohio found surprising, the Federal Energy Regulatory Commission rescinded waivers it previously granted American Electric Power and FirstEnergy . The action meant the controversial power purchase agreements backed by those companies to support their struggling merchant generating plants, and approved by Ohio regulators on March 31, will be subject to ...

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The empire strikes back in Ariz. solar war, with its own constitutional amdts.

The empire strikes back in Ariz. solar war, with its own constitutional amdts.

Arizona lawmakers agreed Wednesday to ask voters to give the state’s electric companies pretty much what they want in setting rates on their customers who generate their own power. On a party-line vote, the GOP-majority Senate Appropriations Committee voted to require state utility regulators to set separate rates for utility solar customers vs. those who buy all their electricity from the utility...

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Despite stay on Clean Power Plan, EPA clean energy incentive program advances

Despite stay on Clean Power Plan, EPA clean energy incentive program advances

In spite of the Supreme Court ’s stay imposed on the Obama administration’s Clean Power Plan (CPP) in February, delaying official implementation of the plan, the Environmental Protection Agency is moving ahead with the  Clean Energy Incentive Program , Climatewire reported. The program is designed to credit states with early action in complying with the CPP. The Court’s stay on the CPP de...

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Oncor, Texas’s largest utility, in play again, as conditions on sale fall through

Oncor, Texas’s largest utility, in play again, as conditions on sale fall through

The much anticipated Energy Futures Holdings Corp. ’s plan to sell its valuable Oncor power distribution utility for some $19 billion to fund its exit from bankruptcy will not close as expected, an EFH lawyer told a US Bankruptcy Court on Thursday. The lawyer said Oncor, Texas' largest utility, will present an alternative plan for exiting bankruptcy and seek to have that plan confirmed by the court in...

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Bio. Diversity Ctr. ranks 10 sunny states that sometime block solar development

Bio. Diversity Ctr. ranks 10 sunny states that sometime block solar development

Some of the sunniest states in the country are actively blocking rooftop solar development, according to a Center for Biological Diversity report released Tuesday. “There’s room for improvement in solar policies across all 50 states, but it’s especially shameful to see the sunniest states fail to lead the transition from fossil fuels to clean, renewable energy,” the Center report said. The 10 states h...

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Porter, Ohio PUC’s third head in 3 years, leaves post soon after reregulation ruling

Porter, Ohio PUC’s third head in 3 years, leaves post soon after reregulation ruling

April 28, 2016 -- Andre Porter is leaving his job as chairman of the Public Utilities Commission of Ohio . His resignation comes less than a month after he shepherded a highly controversial proposal by Ohio-based FirstEnergy Corp. and American Electric Power Co. to assign major generating plants to their utility affiliates, bringing the plants back under state regulation and making their customers bear th...

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Editorials

A few things we know about solar

A few things we know about solar

“Where you stand depends on where you sit.” That adage is generally attributed to Rufus Miles, a Department of Labor official in the late 1940s. It has become known as Miles’ Law.

The maxim has many applications, few more appropriate than understanding the positions of disputants engaged in debates over America’s policies toward solar energy development. 

I say this with reference to Karl Rábago’...

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Community solar is ‘right-size’. Users, solar firms, utilities should collaborate

Community solar is ‘right-size’. Users, solar firms, utilities should collaborate

Community solar is a most promising resource—practiced in many jurisdictions, but not the same creature in any two of them. The extent of the several rollouts differ, the applicable size and rules differ, and the degree to which benefits are shared—among utility customers who subscribe, solar developers, and utilities—also differ from one jurisdiction to another.

Even the name changes from place to...

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Guest Editorial: What do today’s consumers really want from the Smart Grid?

Guest Editorial: What do today’s consumers really want from the Smart Grid?

What do consumers expect from their electric utility? What programs and services are they likely to be interested in? And how can utilities earn their trust? 

Each year the Smart Grid Consumer Collaborative (SGCC) releases its annual State of the Consumer Report. This report helps smart grid stakeholders gain a deeper understanding of how American consumers think about and engage with grid mod...

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Net energy metering and the ‘missing money’

Net energy metering and the ‘missing money’

Ahmad Faruqui’s article, “An Economist’s Dilemma: To PV or Not to PV,” has just been published on our website, ElectricityPolicy.com . Among many articles we recommend as “must read,” I think it’s a “really must read”—in part because it is a story, a personal tale of our time, well and amusingly told. It’s filled with the mysteries, frustrations, and discoveries of everyday life, and the occasional “a...

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Going nuclear: A tale of two societies

Going nuclear: A tale of two societies

Two news articles below tell a different tale about the prospects for nuclear power.

In one, we report that China , a monolithic society with centralized decision-making capability that US and European technocrats might envy, will by next year finish building an “inherently safe” high-temperature, gas-cooled reactor that it will replicate if its design and operation prove out. China will build other ...

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All of the above? Should nuclear power be a tool in our energy resource toolkit?

All of the above? Should nuclear power be a tool in our energy resource toolkit?

Nuclear power is attracting attention again, as the world confronts how to halt the harmful effects of climate change, while providing electricity to its 7 billion people—particularly the 1.2 billion who have no access to its benefits, and the many who are seriously underserved.

Having always had electricity at its fingertips at the flick of a switch, we in the developed world can’t imagine how res...

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