Buyer's Remorse: Questions about grid modernization affordability

power lines

Utilities’ pursuit of a modern grid to maintain the reliability and safety pillars of electricity delivery has raised a lot of questions about the third pillar — affordability.

Utilities are seeing rising penetrations of emerging technologies like distributed solar, behind-the-meter battery storage, and electric vehicles. These new distributed energy resources (DER) do not eliminate utilities' need to keep distribution systems safe and reliable.

But the need for modern tools to manage DER imposes costs on utilities that some regulators, lawmakers and policymakers are concerned could drive up electricity rates.

The result is an increasing number of legislative and regulatory grid modernization actions aimed at identifying what is necessary to serve the coming power sector transformation.

 

The rise of grid modernization

Grid modernization, which is supported by both conservatives and distributed energy resources advocates, got a lot of attention last year. According to the 2017 review of grid modernization policy by the North Carolina Clean Energy Technology Center (NCCETC), 288 grid modernization policy actions were proposed, pending or enacted in 39 states.

These numbers from NCCETC's first annual review of policy activity set a benchmark against which future years' activity can be measured.

The most common type of state actions, by far, were those that focused on the deployment of advanced metering infrastructure (AMI) and battery energy storage. Those are two of the 2017 trends identified in NCCETC’s 50 States of Grid Modernization report. But deployment of those technologies, while foundational to an updated grid, only begins to prepare distribution systems for the coming power sector transformation.

Bigger advances, including the newest energy system management tools, are being held back by 2017’s other policy actions requiring more deliberation and fact-finding. Utilities’ proposals to more fully prepare their grids to deliver 21st century technologies are being met with questions about completeness and cost.

Utilities are being asked to address these questions in comprehensive, public utility commission-led cost-benefit analyses and studies. This is also one of NCCETC’s top 2017 policy action trends for grid modernization. The outcome to date appears to be an increased, but still incomplete, understanding of what is needed to build a 21st century grid.

Among the top objectives of those driving the policy actions are resolving questions about private sector participation in grid modernizaton buildouts and developing new rate designs to protect and support customer-owned distributed energy resources. Actions on those topics are also on NCCETC’s list of 2017 policy trends.

Altogether, the trend list is dominated by actions that do not lead to completion of grid modernization but to more work on it.

Buyer's Remorse: Questions about grid modernization affordability On-Line Buyer's Guide

The Electricity Forum Online Transmission & Distribution Buyer's Guide is an interactive reference tool for buyers and specifiers, providing information on equipment, companies, products and services for North America's electrical industry. Search through hundreds of leading Suppliers and thousands of product categories. Add Your Company Today!

Free Buyer's Remorse: Questions about grid modernization affordability Magazine Subscription

The Electricity Forum is a North American "value added" publisher of Transmission & Distribution print/digital magazine: Electricity Today - a leading electrical transmission and distribution magazine. Magazine is distributed FREE of charge to North American electrical industry professionals.

Contribute To The Electricity Forum

The Electricity Forum is interested in publishing your technical, non-commercial articles, on a wide variety of subjects. We are seeking original content for our Transmission and Distribution Channels. Click here to view our author guidelines and submit your article today!