NewEnergyNews: ORIGINAL REPORTING: THE GRID NEEDS INDEPENDENT DISTRIBUTION SYSTEM OPERATORS

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Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge now: To make every day Earth Day.

YESTERDAY

THINGS-TO-THINK-ABOUT THURSDAY, December 8:

  • TTTA Thursday- The Record Of The New EPA Head
  • TTTA Thursday-The Undeveloped New Energy
  • TTTA Thursday-Walking On New Energy
  • TTTA Thursday-Electric Tractor For Emissions-Free.Farming
  • THE DAY BEFORE

  • ORIGINAL REPORTING: Turning Distributed Energy From Threat To Opportunity
  • ORIGINAL REPORTING: Solar Policy Action Heats Up
  • ORIGINAL REPORTING: Maine’s Almost Solar Policy Breakthrough
  • THE DAY BEFORE THE DAY BEFORE

  • TODAY’S STUDY: How To Balance Competing Solar Interests
  • QUICK NEWS, December 6: Sliver Of Hope? Al Gore In Climate Change Meet With Donald Trump; The Opportunity In New Energy; Google Seizing New Energy Opportunity
  • THE DAY BEFORE THAT

  • TODAY’S STUDY: A Way For New Energy To Meet Peak Demand
  • QUICK NEWS, December 5: Trial Of The Century Coming On Climate; The Wind-Solar Synergy; The Still Rising Sales Of Cars With Plugs
  • AND THE DAY BEFORE THAT

  • Weekend Video: Trump Truth And Climate Change
  • Weekend Video: The Daily Show Talks Pipeline Politics
  • Weekend Video: Beyond Polar Bears – The Real Science Of Climate Change
  • THE LAST DAY UP HERE

  • FRIDAY WORLD HEADLINE-Aussie Farmers Worrying About Climate Change
  • FRIDAY WORLD HEADLINE-The Climate Change Solution At Hand, Part 1
  • FRIDAY WORLD HEADLINE-The Climate Change Solution At Hand, Part 2
  • FRIDAY WORLD HEADLINE-New Energy And Historic Buildings In Europe
  • --------------------------

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    Anne B. Butterfield of Daily Camera and Huffington Post, f is an occasional contributor to NewEnergyNews

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    Some of Anne's contributions:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

  • ---------------
  • WEEKEND VIDEOS, December 10-11:

  • A Climate Change Denier’s Lies Exposed
  • The Good News Numbers On The EV Boom
  • “This Is Just The Beginning”

    Tuesday, December 16, 2014

    ORIGINAL REPORTING: THE GRID NEEDS INDEPENDENT DISTRIBUTION SYSTEM OPERATORS

    Jon Wellinghoff: Utilities should not operate the distribution grid; The grid needs Independent Distribution System Operators, the former FERC chair told Utility Dive

    Herman K. Trabish: August 15, 2014 (Utility Dive)

    As distributed energy resources come onto the grid in increasing numbers, the distribution system may need a new level of regulation to ensure new services get delivered efficiently, according to a proposal from Jon Wellinghoff, former FERC chair and current partner at Stoel Rives, and James Tong, vice president of strategy and government affairs at Clean Power Finance.

    Regional Transmission Operators (RTOs) and Independent System Operators (ISOs) have, in partnership with utilities, expanded and streamlined the grid’s electricity markets over the last decade.

    Now, utilities need a partner at the distribution system level to do the same for retail electricity, according to the proposal.

    Why the grids needs an Independent Distribution System Operator

    In order for solar and other distributed energy resources (DERs) to add more value to the bulk system and cause less stress, Wellinghoff and Tong are calling for the creation of an Independent Distribution System Operator (IDSO) to handle the planning and operations of the distribution network.

    Today, utilities own and rate base transmission system assets while answering to the Federal Energy Regulatory System (FERC) and leaving day-to-day operations to RTOs and ISOs. Under the proposal, they can own and rate base distribution system assets while answering to state regulators and leaving moment-to-moment operations to the Independent Distribution System Operator.

    The consolidation of balancing authorities and operational control of the wholesale market system through system operators has proved a much more efficient model, Wellinghoff, co-author of Rooftop Parity: Solar for Everyone, including Utilities, told Utility Dive in an interview.

    The proof is a 2009 study by FERC and four Southeastern state commissions that showed Entergy could save a minimum of $700 million over ten years by joining the Midcontinent Independent System Operator, he said.

    “Now we have the software tools and computing capability to bring those benefits down to the distribution level,” Wellinghoff said. That will grow the system and give DER entrepreneurs greater visibility into where the value is in technologies like solar PV and storage. “They will go get that value. And that will benefit customers who use and invest in DERs.”

    “And that also will create new incentives for innovation,” added co-author andClean Power Finance VP James Tong.

    What an Independent Distribution System Operator would do

    “State commissions will still have complete authority, just like FERC has complete authority over the RTOs,” Wellinghoff said.

    But their role changes slightly, he explained. The IDSO would manage planning and operations. The commission would have ultimate approval authority and be “a market overseer, enforcer of market rules, and creator of market structures, much as FERC does now at the wholesale level.”

    An IDSO would:

    maintain system safety and reliability

    provide open and transparent system access

    implement market mechanisms

    oversee optimal DER deployment and dispatch

    guard consumers’ access to all transactive energy services

    allow regulated utilities, unregulated energy sellers, independent energy and service providers, and electricity customers equal opportunity to meet new electricity consumer needs.

    Utilities now do the planning and set values at the distribution level, Tong said. “Because of that, the debates are about net energy metering. But the real threat to the existing utility model is that people are becoming more efficient.The EIA estimates load growth will only be 0.9% per year for the next 30 years.”

    The opportunity for utilities

    If utilities turn operation of the distribution system over to an IDSO, Tong said, they can focus on the opportunity to offset slowed load growth by investing in DER and DG on the regulated side and opening similar opportunities on the unregulated side.

    “In a world that is all monopoly-owned assets, utilities could be effective distribution system gatekeepers,” Tong explained. “But in a world with a lot of DER and customer-owned assets, there is an inherent conflict of interest. It would be, to borrow an analogy, like an air traffic controller that also owns an airline.”

    While FERC has begun turning the grid over to system operators, state commissions and utilities can similarly turn moment-to-moment distribution system operations over to IDSOs. That would free utilities, bolster unregulated energy suppliers and independent energy service providers, and empower electricity customers.

    An IDSO would eliminate distribution system encumbrances for regulated utilities, the proposal explained, and free them from some reliability burdens. Utilities could then form partnerships with independent generation and service providers. Those businesses could offer profit opportunities in return for utility capabilities like customer outreach, billing, project implementation, local regulatory expertise, and access to capital.

    California regulators have acknowledged the need for streamlining distribution system operations in a proceeding to oversee IOU’s implementation of mandated Distribution Resources Plans. California IOUs are mandated to integrate cost-effective DERs into their distribution systems “with the goal of yielding net benefits to ratepayers.”

    Where the systems meet

    There is an especially important opportunity at the intersection of wholesale transactions on the transmission system and retail transactions on the distribution system, Wellinghoff said.

    An example is the recent decision by a D.C. district court that FERC has no jurisdiction over demand response because it is a retail product. “There are 15,000 megawatts of demand response in PJM and that is of tremendous benefit. According to PJM, it drove down capacity prices $12 billion last year,” Wellinghoff said. "If that decision stands, it could exclude all types of retail activities, including distributed generation, storage, and efficiency.”

    The only way to prevent the loss of what are extremely valuable assets would be the creation of something like an IDSO, he said. It could aggregate those retail products and allow a market exchange through a wholesale-retail interface with the bulk system. “The states would have jurisdiction over what the court says are retail products and FERC would continue to have jurisdiction over the wholesale products.”

    Even utilities that are now opposing the entry of demand response in capacity markets could see benefits. Instead of “frantically doing whatever they can to prevent customers from reducing usage through things like demand response,” Wellinghoff said, “they could be the owners and maintainers of a distribution system platform, upgraded to include demand response on IDSO plans, that they could build and rate base.”

    An IDSO also would reduce a utility’s risk in the approval process, Wellinghoff added. The IDSO would do planning through a stakeholder process with the utilities at the table. It would then recommend the selected investments to the regulators. “That is in essence an independent third party recommending to the commission that upgrades be made that the utility could rate base,” Wellinghoff said.

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