ORIGINAL REPORTING: Illinois cloud computing debate could open utility rate reform
In Illinois, cloud computing debate could open next chapter of utility rate reform; Changes sought to the financial treatment of cloud computing could be applied to efficiency and other resources
Herman K. Trabish, July 10, 2017 (Utility Dive)
Editor’s note: Illinois regulators just approved this.
A new Illinois Commerce Commission staff report recommended commissioners initiate a rulemaking on how costs for utility-scale data analytics software should be handled by the regulatory process. The staff said utilities should join their corporate peers in banking, healthcare other regulated industries by migrating their data to the cloud. Existing regulatory rules didn’t make that easy but the commissioners just ruled state regulations should be changed to allow it. The ICC’s 2016 Notice of Inquiry (NOI) proceeding revealed a strong consensus that its accounting rules had not kept pace with innovation, the staff report concluded. Regulatory accounting rules that limited utilities to earning a rate of return for on-premise software will now categorize cloud-based software in the same way and allow a return for using it. This eliminates the disincentive for utilities to invest in the new technology.
The cloud may soon be the only place with the computing power to handle the exponentially escalating amount of data being generated by new smart technologies, according to testimony in the NOI proceeding. The U.S. now has 70 million smart meters installed in over 55% of households, according to Adam Cooper, Director of Research for the Edison Foundation Institute for Electric Innovation. Based on his research, 90 million will be deployed by the end of 2020. That is just tip of the spear. Investor-owned utilities put $32 billion into grid modernization in 2016, according to Cooper. Much of that spending was for sensors and other system monitoring and management systems that produce data that “is already creating new use cases and value opportunities.” Led by tech giants like Siemens, GE, Oracle and Amazon, a shift away from on-premise software is coming, according to Chris King, global chief regulatory officer for Siemens… click here for more