It’s been a busy week for grid policy developments, some in states on the forefront of the distributed energy revolution, and others in states without much of a track record.
Virginia’s big energy bill: Grid modernization, clean energy, efficiency
Late Thursday, Virginia passed a law with major implications for the state’s energy efficiency and renewable energy landscape -- and hundreds of millions of dollars for grid modernization investment.
The law was the result of a contentious legislative battle over how investor-owned utility Dominion Power would manage hundreds of millions of dollars it had collected from ratepayers since a 2015 rate freeze, instituted to defray costs of the EPA’s Clean Power Plan. After much outcry, a plan to allow Dominion to reinvest the money in grid modernization projects of its choice was amended to add a lot more for efficiency and renewables.
That includes a commitment from Dominion to bring 5,000 megawatts of solar and wind power online over the next 10 years. That’s an order of magnitude greater than the state’s current 290 megawatts of solar and negligible share of wind power supply, said Harrison Godfrey, executive director of Virginia Advanced Energy Economy, a nonprofit organization that worked with the stakeholder group that emerged with this week’s legislative compromise.
Specifically, the bill declares that this target, which also includes 50 megawatts of distributed energy, is “in the public interest,” opening the State Corporation Commission (SCC), which oversees Dominion, to allow it to compete against cheaper fossil fuel alternatives. Dominion is entitled to own up to 75 percent of this total, but the remaining 25 percent is to be awarded through a competitive bid process, Godfrey said.
Dominion also committed to invest $1 billion in energy efficiency, roughly triple its current spending, as part of the legislative compromise, he said. And in a critical addition, the new law bars the SCC from using a very restrictive cost-benefits analysis, known as the ratepayer impact measure test, that it has used to bar many efficiency proposals in the past, he said.
Dominion is also entitled to reinvest a portion of the $300 million to $700 million addressed in the law for grid modernization. The law describes that term expansively, with a list that includes everything from smart meters and distribution automation to electric vehicles and DERs, according to Godfrey.
“We think this is a sea change when it comes to investment in advanced energy in Virginia,” he said. “One of the ongoing stories here will be the implementation process for this legislation. Will the utilities stand up for what they committed to, or will they try to wiggle out of this?”
SDG&E goes big into emergency backup with 166 MW energy storage proposal
Batteries struggle on cost against diesel- and natural-gas-fired generators when it comes to reliable, always-on power for industrial and commercial facilities that want to ride through power outages. But in California, where utilities are mandated to procure hundreds of megawatts of energy storage over the coming years, they could make sense -- particularly if they can be of service when the grid’s still running.
This week, utility San Diego Gas & Electric proposed a plan that would see it become an energy storage provider to hundreds of fire and police stations, emergency operation centers, evacuation sites and other “critical public-sector facilities." The plan would start with seven test sites in rural San Diego County, and would expand to add up to 166 megawatts of energy storage by 2024, pending approval by the California Public Utilities Commission.
SDG&E is also proposing an Energy Storage Customer Program Pilot, a test tariff of sorts, along the lines of other specialized rates that SDG&E has proposed for owners of batteries or other DERs. The program would provide incentives for nonprofit care facilities such as hospices, nursing homes, or group living homes for the physically or mentally disabled. Pending CPUC approval, SDG&E would issue a solicitation for a third-party administrator for the pilot program, and expects to launch it within one year of CPUC approval.
“This is a big deal,” GTM Research analyst Brett Simon said. “It's the first I've heard of a utility investing this heavily in energy storage for the purpose of critical infrastructure resilience.” But it’s not surprising, given the rash of natural disasters last year and the toll they took on utilities unprepared for them.
“Utilities are increasingly thinking about ensuring resilient infrastructure, while end customers and communities are initiating such conversations and discussing options as well. Such an action by a major investor-owned utility indicates a recognition that energy storage can serve as a cornerstone for resilience,” he said. SDG&E has proposed its program under the authority to “accelerate widespread deployment of energy storage” given to it and other investor-owned utilities by 2016 state law AB 2868.
“Diesel gensets remain much cheaper than solar-plus-storage today,” Simon noted. “However, the interesting piece of the conversation comes from the fact that these storage systems can provide services at non-outage times, and thus have the opportunity to add additional value from services like demand-charge management or, where applicable, grid services. Each year, we're going to see solar-plus-storage become increasingly competitive with incumbent backup power technology.”
Integrated planning for Hawaii's island grids
Last month we covered Hawaii’s new demand response tariff, and its major implications for behind-the-meter aggregated distributed energy resources. This week, the renewable-energy-rich state has taken another milestone step, with the filing of investor-owned utility Hawaiian Electric’s integrated grid planning (IGP) process. The 21-page document (PDF) lays out multi-year system planning, sourcing and approvals to connect its grid investment planning with the Hawaii Public Utilities Commission’s demand for “integrating a variety of generation sources and customer-sited resources in an economically and operationally efficient manner.”
Paul De Martini, a former Southern California Edison and Cisco smart grid executive who worked with HECO on the IGP, called the plan a “fully integrated resource, transmission and distribution planning analysis with an integral resource, T&D grid services sourcing steps that utilize market solutions in the evaluation of the final action plan.”
As befitting an island utility with several unique grids, HECO will work with the companies providing these services directly to determine the optimal mix of costs to accomplish its goals, he said. That approach won’t necessarily work in states with restructured energy markets, where different entities do the resource, transmission and distribution planning and related sourcing. Still, it’s a “a significant leap forward for Hawaii in response to customer needs, the state's objectives and extensive stakeholder feedback,” with certain aspects that could be useful to utilities outside its boundaries, he said.
NV Energy and Bidgely expand the playing fields for disaggregation data
It’s a poorly kept secret that Silicon Valley energy disaggregation startup Bidgely has been working with Nevada’s largest investor-owned utility NV Energy for some time now. But last week the two officially announced their partnership, along with an interesting expansion of Bidgely’s initial contract into different aspects of the utility’s customer service operations.
Last year, Bidgely won an RFP to provide home energy assessments, explained Leesa Lee, Bidgely’s vice president of marketing. These are the questionnaires that utilities ask homeowners and business owners to fill out to determine their buildings' typical energy profile, as a precursor to making recommendations for efficiency upgrades, DER investments, or the like.
Bidgely’s assessment differs from this model in that it uses the company’s disaggregation algorithms to fill in all of this data on its own, down to the share of bills caused by different energy-using systems or appliances. That’s a big plus for customer engagement and retention.
NV Energy’s new contract expands Bidgely’s data for use in a broader set of its operations, she said. Now its auditors will have access to the data when they visit for inspections, as will the service reps who answer customer phone calls.
“One of the problems they’re trying to solve is, each utility has various departments, and many of them collect data from consumers but they don’t always talk to each other. The thing that NV Energy was excited about was this single source of truth for customer data, based on this disaggregation,” she said.