ORIGINAL REPORTING: Grid Mod Gets Bigger And Smarter

As grid mod accelerates and regulators push back, Duke and others retool proposals; Within this whirlwind of activity, some utilities are responding well and some are struggling to meet pressure from regulators and stakeholders to justify spending proposals.

Herman K. Trabish, Dec. 20, 2018 (Utility Dive)

Editor’s note: Grid modernization efforts continue to expand and become more important as the U.S. power sector builds in more flexibility and distributed generation and cut back on emissions.

Grid modernization is a concept that covers utility and other investments in distribution and transmission system technologies that improve the grid's reliability, resilience and efficiency. They range from advanced metering infrastructure (AMI) to distributed energy resources (DER) to smart grid and automation hardware and software. The appeal of these advanced technologies to customers, policymakers and utilities is clear, but utilities are beginning to get "pushback on the price tag of some proposals," according to the ScottMadden Fall 2018 Energy Industry Update. Grid modernization investments may run into the billions of dollars, and regulators and stakeholders are beginning to question the rate impacts of these expenditures…

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Pushback based on inadequate justification of costs led to regulators' recent denials of AMI proposals in Kentucky and New Mexico, according to both ScottMadden and the North Carolina Clean Energy Technology Center's (NCCETC) Q3 grid modernization policy update. In Q3 2018, utilities proposed at least $2.36 billion in spending for AMI and smart grid deployment and another $7 billion for energy storage deployments, according to NCCETC. "Regulators are increasingly requiring that utilities make the business case," NCCETC Senior Research Manager Autumn Proudlove told Utility Dive. Utilities need to clarify their objectives, validate new technologies, prioritize investments and show a cost-benefit analysis that justifies proposed grid modernization expenditures, ScottMadden advised. Two of NCCETC's top trends in Q3 grid modernization policy activity show utilities responding to the pushback. First, utilities are using regulatory proceedings to propose an increasingly wide variety of metrics for measuring performance, NCCETC reported. This can lead to collaboration with stakeholders on justification of expenditures… click here for more

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