Author Archives: Diane Munns

What the US Electricity Sector Can Learn from the Telecom Revolution

Utilities and regulators are not typically known for innovation. Instead, they tend to focus their efforts and attention on reliability and cost effectiveness. So, when Rob Powelson, new president of the National Association of Regulatory Utility Commissioners (NARUC) kicked off his first national meeting under the theme “Infrastructure, Innovation and Investment,” I was intrigued.

The opening general session focused on how to upgrade aging utility infrastructure in ways that optimize new technology, and introduced a new Presidential Task Force on Innovation to promote modernization. This task force will discover how NARUC members can embrace emerging innovation – like integrated energy networks and battery storage.

This utility-industry focus on innovation marks a new direction. To prepare for the venture, we can learn from the most recent rapid disruption in a related industry, telecommunications: a mere 20-year transition from POTS (plain old telephone service) to PANS (pretty amazing new stuff). This cautionary tale reveals that the winners are grid operators who welcome new ideas and offer customers new services. Read More »

Posted in Grid Modernization, Utility Business Models| Read 4 Responses

Utility Regulators Guided To Set New Rates Deliberately, Using Data

pecan-street-neighborhood-solarDistributed resources – like residential solar, storage, and electric cars – are becoming more mainstream every day. This presents new challenges for utilities and utility regulators who are struggling to capture their benefits, while balancing shareholder interests and reliability.

To help utility commissions around the U.S. navigate the challenges, considerations, and policy developments related to the emergence of distributed energy resources, the National Association of Utility Regulators Association (NARUC) board of directors accepted a rate manual written by its staff subcommittee at its annual meeting. The Distributed Energy Resource Compensation Manual supports a deliberate, reasoned approach to making rate design changes by providing practical guidance to its members. Read More »

Posted in Clean Energy, Electric Vehicles, Electricity Pricing, Energy Storage, Solar Energy| Comments are closed

Distributed Energy Resources to Dominate at Gathering of Nationwide Utility Regulators

rp_Conference-300x200.jpgOn November 13, 2016, the nation’s state and federal utility regulators – also known as the National Association of Utility Regulators Association (NARUC) – will meet for their 128th annual meeting in La Quinta, CA and host over 1000 participants. As a former NARUC president and seasoned observer of these meetings, I study the issues that rise to the top for the limited amount of meeting time available. The topics making the cut offer a snapshot of what is trending nationally in the various regulated sectors.

Distributed resources – like residential solar, storage, and electric cars – not long ago nascent technology, are now mainstream. At this year’s NARUC meeting, issues related to the impact of distributed resources on business models and regulation dominate the electricity agenda as states strive to capture their benefits.

The conversation will tackle next-level questions of grid modernization, interconnection, valuation, business models, and rate design. Utility planners aim to correctly set conditions for continued growth in the transforming electricity sector. The meeting topics reveal changed thinking, from fixing “problems” caused by these technologies to  maximizing their potential  benefits. Read More »

Posted in Clean Energy, Electricity Pricing, Energy Storage, Grid Modernization, Solar Energy, Utility Business Models| Comments are closed

Hot Topics at the Summer’s Biggest Electricity Meeting

NARUCMeetingMore than 1,000 people gathered in Nashville, TN this week for the summer meeting of the National Association of Regulatory Utility Commissioners (NARUC). The meeting is one of three yearly where thought leaders gather to socialize the knottiest issues of the day in regulated utility industries, including telecommunications, electricity, natural gas, and water. Two electricity debates dominated the stage and the halls during this summer’s meeting: nuclear power and rate design.

NARUC meeting participants represent state public utility commissioners and their staffs, federal energy agencies, regulated industries, and special interest groups. The meetings are a place to define issues, float solutions, and begin to understand and narrow disagreements.

Nuclear power and rate design were hot topics at this summer’s meeting because of cracks in the present electricity system created by new technologies and environmental regulation.

Read More »

Posted in Electricity Pricing, Utility Business Models| Comments are closed

The Process Priority: Inspiring Good Rate Design for Our Modernizing Grid

Untitled design (19)New technology is evolving electricity transmission from a centralized, one-way system to a more distributed, interactive one. This system necessitates new electricity rates, and the National Association of Regulatory Utility Commissioners (NARUC) unveiled this week at its annual summer meeting a draft manual that will help states across the U.S. design them.

The Distributed Energy Management Compensation Manual is basically a compendium of rate design options that regulators can consider, and it outlines each option’s pros and cons. NARUC President Travis Kavulla charged his staff with writing the manual – a monumental undertaking – and we commend the organization for this effort.

I was pleased to speak during the Town Hall event at which NARUC rolled out the draft manual, and my remarks focused on one critical need: good rate design process. Choosing the right electricity rate for a state is important, but so too is the process by which regulators arrive at that decision. Early in the document it recognizes, “A jurisdiction will need to identify its current status regarding DER [distributed energy resources], what role it expects DER to have in the future, understand the nature of DER adoption rates, and identify necessary policy developments to accommodate that future.” Now is the time to encourage NARUC to include in the manual a dedicated section that shows states how to build a process for ratemaking that will be sustainable, benefit consumers, and advance in tandem with electricity distribution technology.  Read More »

Posted in General, Grid Modernization, Utility Business Models| Comments are closed

What is Good Rate Design, and How Will We Get There?

Good process blog post imageAs a former state utility regulator, I know the difficulty of balancing competing interests in making decisions and communicating those decisions to constituents. Solutions deemed “fair” by some parties may have harsh or unintended consequences for others.

This challenge of balancing competing interests is playing out with the current debate on electricity rate design as the system struggles to deal with the impact of new, distributed forms of energy like rooftop solar. From Nevada and Arizona, to Kansas and New Hampshire, we’ve seen these debates leave the hearing rooms of public service commissions and enter the public arena. Increases to fixed charges, changes to net metering, demand charges, time-of-use rates, minimum bills, or a combination of these options, are just some of the policies that states have either implemented in response to this debate, or are currently considering.

But many questions remain about the best path forward: What design will adequately compensate utilities for their investments, support the need to upgrade the electric grid, and encourage new technologies and innovation, while being perceived and accepted as fair? To answer these and related questions, a “good” rate design process needs to be put in place – one built on transparency, fairness, accessibility, and accountability. Read More »

Posted in Electricity Pricing, Utility Business Models| Comments are closed
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