State Utility Regulators Hands Full This 2016
The power sector has seen a wave of changes in the form of new policies, more consolidation and new energy technologies.Utili
One example is Maryland which is taking a comprehensive look at ways to integrate new technologies and update aging infrastructure. Kansas and California are taking pilot programs for electric vehicle charging station. Hawaii, New York and Arizona are debating alternative rates for distributed generation.
Utilities are regulated on the state level, these debates manifest themselves a bit differently in each jurisdiction. clean energy trade group Advanced Energy Economy compiled what it says are some of the commission issues of the year.
New York's Reforming the Energy Vision remained a clear choice for top commission issue this year. Under the REV, regulators aim to remove disincentives in the utility regulatory model toward deploying customer-sited solutions like rooftop solar and storage instead grid-scale infrastructure like a new transmission line.
New York regulators split the REV docket into two tracks. Track 1 focuses on the development of distributed resource markets and the utility as the DSP providers. Track 2 of the REV docket focuses on reforming utility ratemaking practices (evolving from traditional cost-of-service) and revenue streams to support the DSPP model. New York utilities have proposed a variety of pilot projects to test various aspects of DER integration, customer data sharing and third party partnerships.
California is the hodgepodge of utility reform, with proceedings ranging from EV charging pilot programs to alternative rate designs and programs designed to test the impact of DER incentives on utilities. California Public Utilities Commissioner Michael Florio introduced a draft proposal that outlines a framework to align utility ratemaking processes with increasing demand for distributed energy resources.
3.Mergers and Acquisitions
With its acquisition of mid-Atlantic utility Pepco, Exelon is now the largest utility holding company in the U.S. by customer base. Its completion over raucous protests in Washington is symbolic of a wave of consolidation in the sector, according to Coley Girouard, a utility program associate at AEE.
In 2014, NextEra proposed to take over Hawaiian Electric Industries, Hawaii's dominant utility. But after nearly two years of wrangling and concerns over NextEra's commitment of renewable energy, the Public Utilities Commission rejected the deal. And in 2015, real estate firm Hunt Consolidated filed for approval to acquire Texas' largest transmission and distributed utility, Oncor, as part of a $17.6 billion deal to spin its parent company Energy Future Holdings out of bankruptcy.
4.Customer Access to Analytics
In Pennsylvania, Robert Powelson, a commissioner on the Public Service Commission, opened a docket to explore opening access to such data analytics for customers. In Texas, the Public Utility Commission opened two dockets for third party authorization to access data and the other on how to govern the web portal, Smart Meter Texas, that would open up data access for customers.
5.Alternative Rate Design
California utilities will move to default time-of-use rates after a regulatory order last year. Colorado and Arizona are also debating major rate design changes regarding distributed solar.
6.Residential Demand Charges
Critics say residential demand charges are too complex for the average ratepayer to understand and indirectly punish the customer for scaling back on energy usage. Conversely, they argue time-of-use rates are a more easily understood and more refined way to align pricing with peak demand. How the regulators in Arizona rule on the issue could set the stage for proceedings in other states.
As regulators confront aging infrastructure and a changing energy landscape. Rhode Island is one state contemplating such measures, and Massachusetts is set to hear proceedings over its utilities' plans this month.
Mateo Jaramillo, vice president of products at Tesla, said in the webinar that the biggest regulatory debate surrounding energy storage is ownership. Private developers opposed the bill, but it was approved earlier this year. As more states consider energy storage mandates and the technology continues to proliferate, continued debates over storage ownership are expected.
9.Electric Vehicle Charging Station
Utilities have noted the opportunities and some regulatory states are contending with proposals by utilities to build the EV charging stations with ratepayer money.
In Kansas City, Missouri, Kansas City Power & Light requested to ratebase more than 1,000 charging stations as part of its ambitious rollout program. But Kansas regulators nixed the proposal in the parts of the metropolitan area that fell into Kansas.
10.Renewable Portfolio Standards
Last year saw some of the most ambitious renewables targets: Hawaii at 100% by 2045, Vermont at 75% by 2032 and California setting a 50% by 2050 goal. This year, other states set equally ambitious targets: Oregon pledged to source 50% of its renewables by 2050 and phase out exports of coal generation.
Rhode Island and the District of Columbia also expanded their RPS, with the New York regulators adopted a mandate to source 50% of its electricity from renewables by 2050 and support aging nuclear generation.