Kati Vombergar
As we roll into August, we look back on the progress regulators made in the first half of 2021. As we take a look back, we see states making plans for more renewable resources, distributed energy resources, electric vehicles, and performance-based ratemaking. These goals and dockets provide evidence suggesting that 2021 will be a revolutionary year for advanced energy systems.
Large-scale Renewables are Expected to Grow
Renewables are the focus for growth in electricity. According to the U.S. Energy Information Administration, about 70% of new large-scale additions in 2021 were from renewables with 15.4 gigawatts coming from solar energy. Colorado, Indiana, Arizona, New York, California, Michigan, Nevada, California, and Washington all have agendas for transitioning to renewable resources. Colorado filed a Clean Energy Plan with an effort to reduce the power-sector greenhouse gas emissions by 80% by the year 2030. Indiana requested for 900 more megawatts of new solar capacity under its initial 2018 resource plan. Arizona set a goal to achieve 100% clean energy by 2070, which includes benchmark targets along the way.
Finding More Value in Distributed Energy Resources
Distributed Energy Resources, DERs, are small energy storage and generation technologies that provide more grid and customer benefits. DERs include devices like rooftop solar, storage, energy efficiency, EVs, and of course blipOne! California is a leading example in the switch to DERs. The California Public Utilities Commission approved a new pilot to help DERs upgrade and expand. Additionally, it approved a new metric to capture DER benefits on the grid and oversee the process of updating the state’s net-metering rules. The CPUC is preparing for an energy future largely defined by DERs. Hawaii, Oregon, Arizona, Minnesota, Michigan, Maryland, Colorado, Massachusetts, and New York are evaluating methods for bringing DERs to the grid.
Regulatory Action for Extreme Weather
Prime examples of extreme weather affecting the grid include the past winter storm in Texas and heat waves in California and Oregon. Both events demonstrated the need for a more resilient, flexible energy grid. After the events in Texas, the Public Utility Commission of Texas opened dockets to address weatherization standards, ERCOT’s pricing mechanisms, indexed retail electricity plans, and service disconnection suspension. Additionally, Texas passed 25 bills to require action for a more reliable electric system. After California’s heatwave in the fall of 2020, the state regulators opened a proceeding to address reliability issues that are already going into effect this year. California acknowledged that new demand-response and battery storage resources helped keep power on during the mid-June heat wave. New York, Arkansas, Colorado, Oregon are also working to build system resilience and enhance grid distribution with dockets.
Investments in Electric Transportation
Electrifying transport is a growing topic for utility regulators. According to Atlas Public Policy, more than $2.6 million has been approved in utility EV programs thus far. DTE Energy in Michigan, just received permission to implement phase 2 of its Electric Vehicle Charging Forward program that provides EV charging stations, fleet advisory services, and customer outreach and education. Minnesota regulators set new requirements for a Transportation Electrification Plan to integrate EV demand to the grid. California set a progressive plan that consists of deploying over 2,000 new EV chargers at apartments and workplaces and invented $240 million to support charging for low-income residents and other priority groups.
Electrifying Buildings
Decarbonizing buildings and the future of natural gas has been controversial this year, however regulators continue proceeding on new electrification plans for buildings. California established $200 million in utility beneficial electrification programs. The Public Utilities Commission of Nevada opened a new proceeding on long-term gas planning. Massachusetts, Oregon, Connecticut, Illinois, and Wisconsin are planning on building electrification technologies for buildings.
Wholesale Markets Expand and Reform
Wholesale electricity markets can be a powerful driver for transitioning to renewables. As states look towards reducing utility customer costs, meeting policy goals, and enhancing system reliability, wholesale markets serve to accelerate the generation and transmission of resources. The National Association of Regulatory Utility Commissioners teamed up with the Federal Regulatory Energy Commission to address sharing large-scale renewables with a federal-state task force that focuses on electric transmission. Several major utilities in the Southeast applied for a new Southeast Energy Exchange Market that would allow power to be traded wholesale among utilities at 15-minute intervals. In the West, there is a growing interest in a region-wide market with commission investigations in Nevada and Colorado. Other states are discussing the conflict between market rules and state clean energy policies.
Interest in Zero-Carbon Firms
As more and more states aim for a 100% clean energy system, they look towards various renewables and other solutions to ensure zero-carbon emissions. Zero-carbon technologies that can provide capacity and other grid services for extended periods of time are a growing interest among states. In June, California announced to obtain 11.5 gigawatts of new resources by 2026 with at least 1 GW coming from a clean firm. In Missouri, regulators plan for 4.5 GW of renewable and zero-carbon resources by 2040. In New York, renewable natural gas and hydrogen from electrolysis is being modeled.
Costs from Pandemic-Related Restrictions on Power
The impacts of Covid-19 left many U.S. opening dockets to address pandemic-related challenges for utilities. Today, there are still lingering side-effects such as utility cost recovery and customers behind on payment. New York is experiencing overdue payments like no other state with an approximately $2 billion total sum of overdue bills across utilities. Massachusetts is continuing to extend disconnection bans. On the other hand, Wisconsin and Texas are ending bans but continue to require management of overdue bills and reporting on utility finances. With effects of the pandemic still lingering on both utilities and customers, we may see an increase in rate-case activity.
Using Data Across the Grid
As technology continues to advance various sectors of society, the electric grid is becoming smarter. We are finding ways to make data more accessible by increasing access to help customers make more informed decisions. New York created the Integrated Energy Resource for customers to access energy-related data. In Washington D.C., regulators are requiring utilities to issue customer home energy reports with usage data and greenhouse gas information. Colorado may amend Xcel’s Advanced Grid Intelligence and Security initiative to expand data-access by allowing a third-party energy management to access customer data.
Performance-Based Ratemaking
Performance-based ratemaking, PBR, is a regulatory framework that rewards utilities for performing well in areas such as greenhouse gas reduction, efficiency, and customer service. PBR is helping states achieve policy goals and benefiting the grid by incentivizing utility behavior. Nevada proposed to encourage peak load reduction, reduce greenhouse gas emissions, and electrify transportation with 3 new performance incentive mechanisms. In Hawaii, regulators used a PBR framework focused on low income energy efficiency programs and advanced metering infrastructure.
Moving Forward
As states and regulators continue to shape the behavior of utility companies, it is important to reflect on how individual behavior can play a role in this change. The recent trends in utilities point to a sustainable future with more renewables and cleaner energy. How can consumers be at the forefront of this energy revolution? By investing in cleaner energy systems, you can move with states to revolutionize our power grid for a brighter, cleaner future.
