The Illinois General Assembly introduced legislation on Thursday that would allow ComEd to invest more than $400 million in communitysolar along with grid-edge assets such as microgrids and public electric-vehicle charging infrastructure.
The bill has bipartisan sponsorship in the state legislature and is expected to leverage the investment ComEd has already made in smart grid technologies, while increasing investment in renewable energy and increasing the resiliency of the grid.
“Our legislation maximizes the critical investments that are being made in Illinois’ energy and economic future, such as the Smart Grid program,” ComEd president and CEO Anne Pramaggiore said in a statement.
There are seven major elements to the bill, some of which are likely to spark intense debate. ComEd said the proposals would be cost-neutral to customers -- over the course of 10 years.
“This is not quite the scale of the $1.5 billion in infrastructure funding given to ComEd a few years back,” said Ben Kellison, director of grid research for GTM Research, “but with over $400 million in potential new build, rate changes, incentive changes and regulatory changes, this is a major piece of legislation.”
A heated debate over efficiency and rate plans
By far the most contentious part of the legislation will be the proposal to move residential customers to demand charges, a tariff structure currently in place for commercial and industrial customers. Customers would pay for distribution services through a fixed fee, with a kilowatt-hour rate based on peak demand instead of overall consumption. The proposal calls for demand-based rates to start in 2018.
ComEd would still have to work out the details of exactly how that peak demand would be calculated, but the utility has already thrown a bone to the consumer groups that will be first in line to fight it. The legislation would extend the money ComEd puts into financial assistance as part of its existing smart grid program -- with $10 million per year in contributions through 2021.
Another potentially contentious issue is moving energy-efficiency programs from being an expense for the utility into an earnings opportunity for ComEd. The legislation would allow ComEd to meet some of its energy-efficiency targets through voltage optimization. By allowing the utility to earn a rate of return on energy efficiency, it would also be able to invest further in efficiency while mitigating rate impacts, according to ComEd.
The Natural Resources Defense Council has argued that voltage reduction should not be a replacement for end-use efficiency programs, and that voltage optimization should be a part of ComEd’s basic obligation.
“Shouldn't utility financial rewards be based on performance, in terms of amount of energy saved, rather than on how much they spend?” Rebecca Stanfield, deputy director for policy in NRDC’s Midwest office, argued in a blog post.
There is a middle ground to allow for voltage optimization without abandoning demand-side programs. GTM Research's Kellison noted that implementing a return on energy efficiency investments through voltage optimization could go a long way to unlocking additional efficiency by creating and aligning incentives that could then move marginal investment dollars toward customer efficiency. A handful of other states allow for credited savings from conservation voltage reduction, but they have come in concert with continued end-use efficiency efforts.
Investment on the grid edge
As part of the legislation, ComEd is also looking to invest in microgrids, electric-vehicle charging, and community solar.
The utility wants to invest $300 million in six microgrids at various critical facilities. The utility did not specify which types of energy would supply the microgrids, but it is seeking "to explore different types of generation,” according to Pramaggiore.
Similar to the approaches taken by many other states building microgrids under the banner of resiliency, the microgrids would service a medical facility, police station and water treatment plant. However, the ComEd microgrids would likely be “drastically larger facilities than existing and planned community microgrids” in other locations, said Kellison.
Kellison also said ComEd could be the first utility to coordinate and utilize grid-connected microgrids to further enhance the overall distribution network.
ComEd also proposes leveraging its smart meter investment to offer community solar to customers that cannot install solar at their homes. “This proposed bill in Illinois falls under a broader trend we're seeing across the U.S. to scale up community solar via statewide legislation. Passage of this bill would put Illinois in a league of just seven of other states with legislation targeting development of community solar,” said Cory Honeyman, a solar analyst with GTM Research.
Currently, there is more than 60 megawatts of community solar in the U.S., but this legislation, along with notable legislation in California, Colorado, Minnesota, and Massachusetts, “is poised to push community solar further into the mainstream as one of the largest growth segments in the broader non-residential solar market,” added Honeyman.
The utility also wants to invest up to $100 million in public EV charging in multi-family buildings, workplaces, municipal parking lots, long-term parking and disadvantaged areas. Each station would also be powered, in part, by solar energy.
Kellison said this proposal was potentially another wildcard in the legislation. “The current proposal to co-locate solar with each of these stations may undergo some changes, as offsetting the energy requirement for these stations only tackles the net impact of the increase in demand from electric vehicles,” he said. Other states, including, Indiana, Massachusetts and California, are also determining the role of regulated utilities in public charging networks, but including solar co-generation is atypical.
The bill comes at the same time that the legislature will be debating the Illinois Clean Jobs Act, which calls for increased energy efficiency standards, a more robust renewable portfolio standard, and more market-based solutions to cut carbon emissions. One of the bill’s co-sponsors, Rep. Bob Rita (D-Blue Island), told the Chicago Tribune that the various energy legislation proposals on the table are not necessarily in opposition.
NRDC’s Stanfield echoed the sentiment. “We hope ComEd's bill represents a starting point for negotiation,” she said, “and not a bottom line for the company.”