The ‘Energy System’ as we know it is being transformed by rapid growth in the form of distributed energy resources (DERs), decentralized forms of distribution and power generation, and emerging technologies that support a bidirectional, transactive grid for energy consumers to interact with their electricity grid. The deployment en masse of these products has created the opportunity to evaluate public utility commission’s regulatory regime in this changing landscape.
For decades, utilities’ economic viability has been based on maintaining a vertically-integrated, monopoly position by generating, transmitting, and distributing electric power. Ohio law separated power generation from grid transmission and distribution services in the early part of the century. This puts Ohio in a timely position to balance the interests of the utilities and the public who can now act as users, sellers, and creators of multiple interactions with the electric grid.
With the PUCO recently declaring that its purview is limited to the grid itself – leaving regulation of generating power in the hands of the Ohio legislature and the FERC (federal) – adapting to this energy transformation can be defined, in this context, as grid modernization. As such, the PUCO’s emerging opportunity is to create free and open access to the grid as an energy highway for a diverse set of energy generators, including DERs, distributed energy storage, and the advent of electric transportation.
To chart a path forward for future grid modernization, as put forth by the PowerForward initiative, the PUCO could adopt three basic principles equivalent to those adopted in “Smart Rate Design for a Smart Future”, prepared by the Regulatory Assistance Project (Montpelier, VT).
These principles include:
- A customer should be able to connect to the grid for no more than the cost of connecting to the grid.
- Customers should pay for grid services and power supply in proportion to how much they use these services and how much power they consume.
- Customers who supply power to the grid should be fairly compensated for the full value of the power they supply.
These principles build a foundation on which the PUCO can understand how changes to regulation and revenue models could enhance overall customer experience. To articulate the regional voice of Southeast Ohio, a coalition of organizations led by UpGrade Ohio and the Athens Energy Institute has developed a set of priorities to share with the PUCO as they consider new regulatory measures that facilitate grid modernization. This strategy, called A Community Approach to Grid Modernization: 5 Key Priorities, will highlight how a new regulatory regime can work to localize the grid to improve energy resiliency.
A Community Approach to Grid Modernization
- Support for Microgrids:
- Define microgrids and nanogrids in Ohio
- Allow non-utility sale of electricity
- Simplify interconnect rules
- Allow greater access to electric utility data for microgrid installation, zoning, and planning
- Allowing community microgrids to cross roads (city/county/township)
- Community Solar:
- Support for Virtual Net Metering
- Allow on-bill financing and payment
- Resources and technical support for low-income community solar
- Electric Vehicles (EV):
- Integrate Electric Vehicles (EV) into grid modernization efforts
- Use Transactive Grid technologies to facilitate EV integration, charging, and automation
- Support equitable distribution of public and private EV infrastructure
- Battery Storage:
- Remove barriers that prevent behind-the-meter resources such as battery energy storage from providing multiple, stacked services to the electricity grid
- Require that distributed energy resources (including storage) be considered as alternative, potentially lower-cost solutions to problems typically
- addressed by traditional “wires” investments and/or centralized peaking generation investments.
- Across all markets, require utilities to use a standardized, best-fit, least-cost benefit methodology that compares energy storage providing a full suite of stacked services with incumbent technologies.
- Advanced Meter Infrastructure:
- Assure data security in the deployment of Smart Meters
- Support Appliance automation with data security
- Support Transactive grid capability to support locally generated and/or stored power to access local and regional markets and serve ancillary functions for the grid.