NewEnergyNews: TODAY’S STUDY: Grid Modernization Policy Debates Right Now


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    Monday, November 25, 2019

    TODAY’S STUDY: Grid Modernization Policy Debates Right Now

    The 50 States of Grid Modernization: Q3 2019

    October 2019 (North Carolina Clean Energy Technologies Center)

    Executive Summary


    In the third quarter of 2019, 45 states plus DC took a total of 383 policy and deployment actions related to grid modernization, utility business model and rate reform, energy storage, microgrids, and demand response. Table 1 provides a summary of state and utility actions on these topics. Of the 383 actions catalogued, the most common were related to policies (93), deployment (76), and planning and market access (73).


    Five of the quarter’s top policy developments are highlighted below.

    Maryland Regulators Issue Decision on Alternative Ratemaking

    In August 2019, the Maryland Public Service Commission issued an order on alternative forms of rate regulation. The Commission did not approve the formula rates proposed by the utilities, but directed the Public Utility Law Division to establish a working group to develop an implementation report on multi-year rate plans. After the working group submits its report, it is to consider performance-based regulation issues.

    Utilities File Revised Grid Modernization Plans in North Carolina and Virginia

    During Q3 2019, two utilities – Duke Energy Carolinas in North Carolina and Dominion Energy in Virginia – filed revised grid modernization plans for approval after regulators rejected their initial plans. Both utilities’ plans have a reduced budget and include a range of investments, such as advanced metering infrastructure, distribution automation, and grid hardening.

    Massachusetts Regulators Reject National Grid Proposed Performance Incentives

    The Massachusetts Department of Public Utilities (DPU) issued a decision on National Grid’s general rate case application in September 2019, rejecting the utility’s four proposed performance incentive mechanisms based on peak reduction, electric vehicle adoption, electric vehicle supply equipment cost containment, and customer ease. However, the DPU approved the utility’s proposed scorecard metrics.

    California Public Utilities Commission Opens Microgrid Rulemaking

    In September 2019, the California Public Utilities Commission opened a new rulemaking proceeding to reduce barriers to microgrid development, pursuant to legislation enacted in 2018. The Commission is to develop standards, protocols, guidelines, methods, rates, and tariffs to support microgrid deployment while avoiding cost shifting between ratepayers. The rules are to be established by December 1, 2020.

    North Carolina Department of Environmental Quality Releases Clean Energy Plan

    The North Carolina Department of Environmental Quality released its final Clean Energy Plan in late September 2019. The final plan includes several policy recommendations focused on six strategy areas: carbon reduction, utility incentives and comprehensive planning, grid modernization and resilience, clean energy deployment and economic development, equitable access and just transition, and energy efficiency and electrification strategies


    The most common types of actions across the country related to energy storage deployment (46), data access policies (30), distribution system planning (28), integrated resource planning (27), and smart grid deployment (27). Grid modernization activity decreased in Q3 2019, as a result of most state legislatures adjourning in the first half of the year. Grid modernization activity in Q3 2019 increased by 39% over Q3 2018 (276 actions) and by 108% over Q3 2017 (184 actions).

    The states taking the greatest number of actions related to grid modernization in Q3 2019 can be seen in Figure 4. New York, Massachusetts, and California saw the most action during the quarter, followed by Minnesota, New Jersey, Hawaii, Michigan, and North Carolina. Overall, 45 states, plus DC, took actions related to grid modernization in Q3 2019.


    Utilities Filing Innovative Rate Design Proposals

    Several utilities have recently innovative rate designs, primarily as pilots, with state regulators. These rates typically include time-varying rates, but are increasingly including components such as critical peak pricing, peak time rebates, and demand charges. The HECO Companies in Hawaii filed their Advanced Rate Design Strategy in September 2019, pursuant to a Commission directive, which includes time-varying rates, critical peak incentives, multi-part time-varying rates, and electric vehicle rates. In Michigan, DTE Electric filed an application for a new advanced customer pricing pilot in July 2019. The pilot includes two time-varying rates, two demand rates, and two rates combining time-varying and demand elements. Duke Energy Indiana filed a proposal for new rates, including critical peak pricing, and in Illinois, regulators approved Commonwealth Edison’s three-part time-of-use pilot including super peak, peak, and off-peak periods. Additionally, North Carolina regulators approved Duke Energy’s dynamic pricing pilots in July 2019.

    Energy Storage Additions Increasingly Included in Utility Integrated Resource Plans

    Utilities are increasingly including new energy storage capacity in their integrated resource plans (IRPs). Thirty-one states currently require utilities to file IRPs. The Georgia Public Service Commission approved Georgia Power’s IRP stipulation in July 2019. The stipulation reached with the Commission Staff includes 80 MW of energy storage – 30 MW more than originally included in the utility’s plan. Other recently filed IRPs including energy storage capacity additions include Green Mountain Power in Vermont (50 to 100 MW) Appalachian Power in Virginia (10 MW) Indiana Michigan Power in Michigan (50 MW of energy storage by 2028), Idaho Power (60 MW installed beginning in 2034). Proposed amendments to NV Energy’s latest IRP also include 515 MW of battery storage.

    States and Utilities Planning Online Energy Data Portals

    A number of states and utilities are planning the development of online energy data portals for customers to access granular data about their energy use. In July 2019, New Hampshire lawmakers enacted a bill to establish a statewide online energy data platform that will be administered by the Public Utilities Commission. As part of the HECO Companies’ Data Access and Privacy Policy filed with Hawaii regulators in September 2019, the utilities will make an energy portal available to customers with advanced metering infrastructure. Indiana Michigan Power also proposed the creation of an online customer engagement platform that will allow users to track their energy usage. In North Carolina, regulators approved Duke Energy’s proposed Smart Meter Usage App pilot, which will allow residential customers to monitor their real-time usage data. Dominion Virginia Energy also requested approval in September 2019 for a Customer Information Platform as part of its revised grid transformation plan.


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