What is future for industry’s “natural monopolies” and providers of last resort?
WASHINGTON, D.C. -- Disruption within the electric power sector has led to a changing, and sometimes unclear, role for U.S. utilities -- uncertainty that has resulted in delayed investment in critical infrastructure for a 21st-century grid.
"Utilities must evolve to meet ever-changing customer wants and needs. But without clarity on what is in-bounds and what is out-of-bounds, customers will not receive maximum benefit because the electric power sector can't respond to their demands as quickly or fully as possible," remarked Courtney McCormick, Vice President of Renewables and Energy Solutions, PSE&G.
Some of the issues the papers will address include:
• In the face of rapid, technological change, does utilities' longstanding "natural monopoly" on power distribution provide the economic and social value as originally intended? What parts should or should not be maintained?
• As new distributed technologies are integrated onto the grid, where and on what levels should utilities be allowed to compete? Should utilities be allowed to own specific distributed devices, such as smart meters, inverters or electric vehicle charging infrastructure?
• With evolving business and regulatory models, who will be the electric power provider of last resort, and what will that mean on a distributed grid?
"As an intelligent energy storage company, we have to understand the fundamentals of how the power industry will evolve," said Karen Butterfield, Stem's Chief Commercial Officer.
"It is imperative that the roles of all market participants are clearly defined, so we can make decisions about when to partner, and when to go it alone."
Submissions are due no later than Sept. 22. SEPA is also requesting that potential participants notify us, no later than Aug. 18, of their intent to submit a paper. More information, including complete guidelines, is available at SEPA51.org.
"By bringing together the best ideas from across the electric power sector, the 51st State is exploring some of the most innovative and interesting concepts for a modern grid," said Rob Caldwell, President of Duke Energy Renewables and Distributed Energy Technology. "This kind of collaboration often produces the most relevant and promising results.
Following the deadline, SEPA will be discussing the range of ideas submitted -- and common themes emerging from the papers -- at several industry forums. Sessions are being planned for the annual meeting of the National Association of Regulatory Utility Commissioners, and at Solar Power International and its regional Solar Power conferences. The qualifying papers submitted for this phase will also be publicly available on the 51st State website.
"We know that these are complex issues that likely have no definitive answers," said Tanuj Deora, SEPA's Chief Content Officer. "But lack of clarity about utilities' future role in the industry means some companies are delaying or simply not making core investments in grid modernization, distributed technologies and organizational change that can provide the foundation and momentum for ongoing transition."
About the 51st State
Since its inception in 2014, SEPA's 51st State Initiative has provided an open platform for envisioning the future of the energy system. More critically, the initiative is focused on developing practical tools and sharing information that can help industry stakeholders -- utilities, regulators, technology firms and consumers -- work together to find the collaborative solutions for energy transformation that will benefit all. In 2016, the Keystone Policy Center honored the 51st State with its Leadership in Energy Award.
The Smart Electric Power Alliance (SEPA) is an educational nonprofit working to facilitate the utility industry's transition to a clean energy future through education, research, standards and collaboration. SEPA offers a range of research initiatives and resources, as well as conferences, educational events and professional networking opportunities. SEPA is founder and co-sponsor of Solar Power International and winner of the Keystone Policy Center's 2016 Leadership in Energy Award. For more information, visit www.sepapower.org.