ORIGINAL REPORTING: Rhode Island targets a common perspective on DER values

Confidence in collaboration: Rhode Island targets a common perspective on DER values; Faced with a rate design impasse, Ocean State regulators have opened a broader docket on distributed energy valuation

Herman K. Trabish, September 6, 2016 (Utility Dive)

Editor’s note: Rhode Island, along with most states in New England and many others across the country, continues to work toward finding the right way to value DER.

When it comes to defining the future of distributed energy, Rhode Island is out to prove Mark Twain right that “it’s not the size of the dog in the fight, but the size of the fight in the dog.” In 2014, the smallest U.S. state enacted its Renewable Energy Growth (REG) program to stimulate utility adoption of distributed energy resources (DERs). The REG program mandated state regulators open a proceeding in the second half of 2015 to decide if the state needed rate structure reforms to respond to growth in DERs, such as rooftop solar. The state was well along toward its initial goal for 40 MW of DER and was making plans for 160 MW more by 2019 when the Rhode Island Public Utilities Commission (PUC) convened the mandated proceeding (docket 4568) in July 2015. But familiar disagreements over customer fees and the value of distributed resources quickly froze progress, with stakeholders balking at an initial utility rate proposal.

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More recently, the state has been working in a new docket regulators hope will take the heat out of DER discussions and allow the two sides to move forward. Through a step-by-step regulatory process that leverages the state’s history of power sector collaboration, stakeholders hope to settle on common expectations and measurements to evaluate future distributed energy proposals. One of the sources of dispute in the previous docket (4568) was inadequately-substantiated claims that DERs provide benefits to the grid, PUC Staff wrote in the memo. Those arguing the point failed to show how such benefits could be measured or whether they supported the goals of legislated state policies, Staff added. Docket 4600 intervenors should be especially focused on “the benefits of distributed-energy resources” and “the distribution services being provided to net-metered customers when the distributed generation is not producing electricity,” the memo instructs. They should use “equitable ratemaking principles regarding the allocation of the costs of the distribution system” and “cost causation principles” to evaluate those costs and benefits…Getting the value of DER right is essential for setting compensation rates and charges that guide economically efficient investment decisions and are fair to customers who do and do not own DER,” Pace Executive Director Karl Rabago responded… click here for more

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