Selected category: Utility Business Models

New Report: Competition Leads to Savings and Cleaner Energy

spring-sunset-pixabayBy: John Finnigan and Dick Munson

To compete, or not to compete – that is the question facing today’s electricity industry.

On one side of the debate are utilities with uneconomic power plants, which are unable to prosper in regional, competitive electricity markets. Faced with low natural gas prices and dramatically declining renewable energy costs, these utilities want bailouts for their aging coal fleets, or they want to relive their glory days as monopolies with guaranteed profits and no pesky corporate rivals. Ohio-based FirstEnergy – which has long waged war on clean energy and campaigned for a bailout – serves as the poster child of this camp.

On the other side are those that recognize the myriad benefits of competition. This includes power companies that didn’t double down on coal and do operate their plants efficiently. There are also nontraditional players – like cleantech entrepreneurs and renewable energy producers – who desire access to the market and a level playing field.

Fortunately, the pro-competition side just got a big endorsement from the nation’s largest grid operator, PJM Interconnection. PJM issued a newly-revised report that confirms bailouts and re-monopolization are not the solution, and competitive markets are the best path for lower-cost, cleaner energy. Read More »

Posted in Utility Business Models| Read 1 Response

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.

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Also posted in Electricity Pricing| 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 »

Also posted in General, Grid Modernization| Comments are closed

A Tale of Two Utilities: One Illinois Power Provider Looks Ahead, while the Other Won’t Budge

TaleOfTwoAs a utility executive, it is the best of times, it is the worst of times. It is the age of innovation, it is the age of stagnant tradition. With a nod to Charles Dickens, it is the epoch of environmental improvement, it is the epoch of continued pollution.

Perhaps no state better represents those extremes than Illinois, where Commonwealth Edison (ComEd) in the north is considering new business models and embracing greenhouse-gas reductions, while Ameren in the south is rejecting change and virtually anything related to clean energy.

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Also posted in Energy Efficiency| Comments are closed

New Tool Measures Smart Grid Benefits. A Game Changer for Our Power Industry?

SmartGridWe all know exercise is good for our hearts and bodies, and who doesn’t enjoy stepping on the scale after weeks of good workouts to confirm progress was made?

In a way, power companies are just like people.

As they begin to invest in smart meters and other grid modernization efforts, utilities want to know how well they do. Can they measure success and prove to investors and regulators they’re making smart decisions?

To that effect, Illinois’ largest electricity provider, Commonwealth Edison, is the first in the country to adopt a new tool that calculates clean air benefits from investments such as advanced meters.

Beyond bringing tangible rewards to ComEd, this little-noticed milestone can have major implications for the entire power industry.
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Also posted in Grid Modernization| Comments are closed

Indiana Formally Approves Duke Energy’s Grid Modernization Plan

grid

UPDATE: Since the March 2016 publication of this original blog post, the Indiana Utility Regulatory Commission (IURC) last week issued an order officially approving a settlement agreement Environmental Defense Fund, along with several other stakeholders, helped negotiate for Duke Energy’s grid modernization plan. The IURC’s order approved the settlement (details of which are outlined in the post below) without change. Now Duke Energy can proceed with the $1.4 billion plan, which will bring many clean energy benefits to Duke’s 800,000 customers.

Help is on the way to reduce harmful pollution in Indiana, which has the seventh highest level of greenhouse gas emissions in the country.

Environmental Defense Fund (EDF) joined a settlement filed this week for Duke Energy’s grid modernization plan. The settlement calls for Duke – the largest utility in the country, which serves over 800,000 Indiana households – to invest $1.4 billion over the next seven years to improve its electric grid. Doing so will deliver major benefits for Duke’s customers. Read More »

Also posted in Demand Response, Grid Modernization, Voltage Optimization| Comments are closed
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