Over the past few years, utilities around the country have been pitching a lot of grid modernization plans. But not all are created equal in the eyes of regulators.
Last month, the North Carolina Clean Energy Technology Center released its latest 50 States of Grid Modernization report, summing up the collective $25 billion in grid modernization plans pending or decided in the second quarter of 2018. Many of plans are centered on smart meters, distribution automation, volt/VAR optimization, and other technologies that fairly clearly fit the definition of “modernization.”
In other cases, they’ve expanded to include grid resilience efforts like undergrounding circuits and trimming trees, which are usually paid for through other, more traditional proceedings. And in many cases, they’re pushing for alternative ratemaking treatment — either under "grid riders" and other additional charges subject to annual adjustments outside the traditional rate case, or through performance-based ratemaking that aligns investments and utility incentives with customer benefits.
The big news from the report? To date, most of the “grid mod” plans that have spent more on resilience and hardening than on technology, or have sought alternative rate treatments that benefit the utility, have been turned down by regulators.