ORIGINAL REPORTING: Texas stakeholders find common ground on utility use of DER
Texas stakeholders find common ground in utility revenue recovery for DERs; State power sector players say DER growth should not hurt utility finances, but consensus over rate design reform remains elusive
Herman K. Trabish | Aug. 2, 2017 (Utility Dive)
Editor’s note: This story reveals that the Texas free market remains hard on the trail of New Energy.
A broad coalition of stakeholders in the Texas grid say investor-owned utilities (IOUs) should not have to risk their revenues to meet the demands of 21st century power consumers. Regulated utilities that advance energy efficiency and distributed energy resources (DERs) should have incentives or a rate structure that keeps them financially whole, according to a new consensus statement from the South-central Partnership for Energy Efficiency as a Resource (SPEER). SPEER members include top executives with Texas transmission and distribution (T&D) utilities, competitive electricity retailers, and advocates for efficiency, distributed resources, and energy management software.
Though the group broke new ground by agreeing in principle that regulated utilities have the right to financial protection, it could not agree on specific remedies in the ratemaking process, said SPEER CEO Bob King. DERs — including demand response (DR), energy efficiency, storage and on-site generation like rooftop solar — can help relieve system congestion and avoid traditional infrastructure costs, King said. But because of a “complex and multidimensional” set of disincentives embedded in traditional ratemaking, “utilities have no incentive to invest in them, even if they reduce overall costs.” To invest in 21st century solutions, regulated utilities need the same financial incentives to invest in DER as they have for investing in physical infrastructure… click here for more