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Creating a 21 st Century Electricity System

Creating a 21 st Century Electricity System. Lisa Frantzis, Advanced Energy Economy Symposium on Reforming the Energy Vision Albany, NY May 22, 2014. EXPECTATIONS OF WHAT THE GRID MUST DELIVER ARE CHANGING. Core Grid Attributes. Emerging Grid Attributes. Universal access Safety

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Creating a 21 st Century Electricity System

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  1. Creating a 21st Century Electricity System

    Lisa Frantzis, Advanced Energy Economy Symposium on Reforming the Energy Vision Albany, NY May 22, 2014

  2. EXPECTATIONS OF WHAT THE GRID MUST DELIVER ARE CHANGING

    Core Grid Attributes Emerging Grid Attributes Universal access Safety Reliability Affordability Environmental sustainability Resiliency Adaptability/flexibility Greater customer control More service options Additional Pressures Need to replace/renew aging infrastructure (rising costs) Minimal to declining load growth (falling revenues) Variable renewable energy integration (wholesale & retail) Cyber and data security Some utilities and commissions recognize that new regulatory & business models are needed.

  3. 21ST CENTURY ELECTRICITY SYSTEM INITIATIVE – CONVENING FOR ACTION

    * http://info.aee.net/21st-century-ny-energy-industry-wg-position-paper provided leadership/input to policymakers, regulators, and other stakeholders on potential electric industry changes needed to achieve the “utility of the future” Vision.

  4. NEW YORK WORKING GROUP

    Working Group Members Advanced Energy Economy* BRIDGE Energy Group Central Hudson Con Edison/O&R Conservation Services Group EnerNOC Environmental Defense Fund General Electric GridCo Systems IberdrolaUSA Johnson Controls, Inc. Landis+Gyr National Grid USA New England Clean Energy Council New York Independent System Operator New York Power Authority New York Smart Grid Consortium Opower PSEG Long Island Verizon *Advanced Energy Economy (AEE) served as the facilitator

  5. NEW YORK GROUP VIEW:THREE “PILLARS” OF FUTURE INDUSTRY

    Customer Products & Services Regulatory Framework Network Infrastructure & Operational Model

  6. CUSTOMER PRODUCTS & SERVICES

    Basic service from the utility Standard for all customers May vary by customer class, utility and geography Customer Products & Services Value-added services Optional (for a fee) Provided by utility and/or non-utility companies Some may migrate to basic service over time

  7. BASIC UTILITY SERVICE

    Customer Products & Services Provide access to the distribution system and DG interconnection Meet reliability requirements, and use EE, DR, DER in combination with traditional investments to do so Billing, collection and customer service relating to utility bill/services Metering services and associated data/information Cyber and data security Outage services (restoration and anticipated outages) Transactions to buy/sell from/to the grid

  8. VALUE-ADDED SERVICES

    Customer Products & Services Examples Enhanced customer and grid management services Commodity and distribution-level ancillary services Billing services for third parties Behind the meter supply services Microgrids Energy storage facilities Back-up supplies (emergency and non-emergency operation)

  9. KEY CONSIDERATIONS

    Customer Products & Services

  10. NETWORK INFRASTRUCTURE & OPERATIONAL MODEL

    Network DER integration to support, not hinder, grid operation Two-way, low latency communications network to give greater visibility/control, including behind the meter Distribution Management Systems/Outage Management Systems for better management and control Coordination with and participation in the wholesale market

  11. GUIDING PRINCIPLES

    Regulatory Maintain effective aspects of the current regulatory approach that will serve as the foundation for the future Supplement traditional cost of service with symmetrical incentives Create greater clarity for long-term investments and cost recovery Adjust ratemaking, including rate design, to allocate costs equitably and address structural changes in utility load profiles Improve rate design to allow customers to make informed choices to enhance their value of service, aligned with policy objectives

  12. OUTCOME-BASED REGULATION

    Regulatory Currently utilities are measured on the ability to maintain reliability safety, and adequate service. In the future, utilities should be measured by outcomes that go beyond these metrics.

  13. BUSINESS CASE APPROACH

    New Benefit-Cost Analytical Framework Broader business case approach needed for benefit-cost assessment that: Accounts for benefits/costs broadly, including value to customers, quantifiable and difficult to quantify benefits, system benefits to utility, and societal benefits that contribute to state policy goals More fully accounts for the effects of new technologies Considers risk and uncertainty

  14. NEXT STEPS

    AEE intends to be an active participant in the REV process – ensuring the voice of the advanced energy industry is heard AEE will interface with the NY Position Paper Working Group and other stakeholders, as appropriate AEE will continue to engage with other states through CEO Forums and Working Groups to communicate lessons learned to date
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