Electricity Policy

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The Net Metering Riddle

The Net Metering Riddle

By Karl R. Rábago

Net metering opponents have done a masterful job in casting the debate around mistaken assumptions. As regulators conduct NEM 2.0 and Value of Solar proceedings, those errant assumptions should be exposed and the real questions addressed.

 

A

fter 25 years in the electric utility rate-making business, I have come to the conclusion that most rate “fairness” can be better understood if you keep this old math riddle in mind:

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Are Regulators’ Heads in the Cloud?  Primary Challenges to Utility Adoption of Cloud-Based Solutions

Are Regulators’ Heads in the Cloud?  Primary Challenges to Utility Adoption of Cloud-Based Solutions

By Brien Sheahan, Elizabeth McErlean, and Anastasia Palivos

While companies like Amazon, Google, Netflix and Uber are using the cloud and IoT to disrupt entire industries, offering dynamic pricing and services, utilities are lagging behind. As the energy landscape evolves, regulators must consider whether the technical and functional merits of the cloud can create value for utilities and ratepayers.

I.  Introduction 

I

ncreasingly, unregulated businesses are adopting cloud-based information technologies to improve service while leveraging back-office scale and security to generate greater value for consumers and shareholders.  Burdened by outdated accounting rules that incentivize investments in legacy technology, cloud adoption by public utilities is relatively low due in large measure by the failure of regulators to consider forwarding looking policies.  As the electricity grid evolves, cloud-based services will become necessary to manage a smarter, more efficient, and more distributed network and regulators will have to overcome antiquated views regarding how we think about rate-base and cybersecurity.

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An Economist’s Dilemma: To PV or Not to PV, That Is the Question

An Economist’s Dilemma: To PV or Not to PV, That Is the Question

By Ahmad Faruqui

In seeking to reduce $500 monthly utility bills in the most economic way, this Californian found himself engaged in an odyssey of the mind. Why couldn’t I accept the subsidy rooftop solar offers utility customers in a high-cost state? Could I do as well simply pursuing energy efficiency?
D

uring the past 12 months, my wife and I paid up to $500 a month for our combined electricity and gas bills during some summer and winter months.  The annual average was $300 a month.  The high bills hit the pocketbook hard.  But they also caused angst.

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The Policy Aspects of Benefit-Cost Analyses for Distributed Solar Generation and Net Metering

The Policy Aspects of Benefit-Cost Analyses for Distributed Solar Generation and Net Metering

 By Charles J. Cicchetti

Based on the analyses here, rooftop solar should be expanded and NEM practices continued.  If utilities propose another path, state regulators should carefully weigh the reasonable alternatives, including the one presented here.

I. Introduction

T

he purpose of Benefit-to-Cost Analysis (BCA) is to formulate and instruct policies.  Good BCA are objective, but seldom sufficient or determinative.  The first step in a BCA is perhaps the most critical because this is where the policies are defined and assumptions that constrain policy choices are made.  This discussion focuses on two rather interdependent policies related to incentives to increase rooftop solar generation and a relationship, not always uniformly defined, between customers that invest in solar generation on their premises and the utility that has the capability and the duty to distribute electricity from the grid to that customer.

Click here to view article as fully-formatted PDF file.

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Cybersecurity: IT vs. OT, and the Pursuit of Best Practices

Cybersecurity: IT vs. OT, and the Pursuit of Best Practices

 By Paul Feldman and Dan Hill

In a cyber environment, where new threats to our power systems emerge daily, the processes, systems, and compliance frameworks we employ for protection, detection, and recovery must constantly evolve as well.

I. Introduction

P

reviously, we have written on the subjects of “A New Responsibility for Boards of Directors: Cybersecurity”[1], and on “Cyber-Risk, Standards, and Best Practices”[2].  The former was an effort to assist Boards of Directors in their thinking and approach to cybersecurity.  The latter was a discussion of risk and the need for the industry to pursue cybersecurity best practices as a superior objective to simply being compliant.  Here we offer thoughts related to future directions for compliance, as well as a specific best practice whose time has come.

Click here to view article as fully-formatted PDF file.  

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Electricity Daily

Dominion wants permission to plan 3rd nuclear unit at its North Anna (Va.) plant

Dominion wants permission to plan 3rd nuclear unit at its North Anna (Va.) plant

May 3, 2016 -- Dominion officials want to continue exploring proposals for a third nuclear reactor at its North Anna plant in Virginia despite potentially massive costs, concerns over the rate impacts and cheaper renewable or natural gas alternatives, according to a Washington Times article and an AP report. In a filing with the Virginia State Corporation Commission , Dominion said a new r...

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Great River Energy, long in hot water, pioneers with affordable energy storage

Great River Energy, long in hot water, pioneers with affordable energy storage

Great River Energy , a Minnesota-based rural electric G&T cooperative, will admit that Tesla’s  Powerwall battery offers a fine storage option, for example for homeowners with solar panels to store their energy for use at night and to help utilities manage the grid. But, as Midwest Energy News reported , Great River Energy has pioneered for 30 years a much more affordable though less flashy st...

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Data giant Oracle acquires energy analytics company Opower for $532M

Data giant Oracle acquires energy analytics company Opower for $532M

Computing giant Oracle announced  Monday that it has struck to acquire energy analytics company Opower for $532 million, at a 30% percent premium to Friday’s close for OPWR. “Together,” crowed Oracle’s news release yesterday, “Oracle and Opower will become the largest provider of mission-critical cloud services to the $2.3 trillion utilities industry.” Opower sells data services that tra...

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Oncor, Texas’s largest utility, still in play as bankruptcy-related deadline passes

Oncor, Texas’s largest utility, still in play as bankruptcy-related deadline passes

The fortunes of a utility under a holding company structure—or, more accurately, the plight of its customers—are not necessarily secure. They may hang on the financial dealings of the parent company. Case in point: Oncor , Texas’s largest utility, serving 3 million residences and businesses in north and west Texas, with 119,000 miles of transmission and distribution lines, and worth some $18 billion...

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UBS: FirstEnergy needs balance sheet fix

UBS: FirstEnergy needs balance sheet fix

Between American Electric Power and First Energy , financial analysts see FE as having the heaviest lifting to do after a Federal Energy Regulatory Commission decision scotched the companies’ plans, blessed by Ohio utility regulators, to shift the economic risk of their money-losing generating plants to Ohio retail customers via power purchase agreements (PPAs). UBS on Monday made it clear that balance sheet ...

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California ISO, policy makers scope out alternatives for western ISO governance

California ISO, policy makers scope out alternatives for western ISO governance

By Bill Henry

May 2, 2016—A  Western Interstate Energy Board   conference on April 26 provided the latest window into the slowly evolving metamorphosis of the  California Independent System Operator  into a west-wide organization operating a huge regional wholesale market. For many that day, the process—feeling to some like an express train driven by PacifiCorp and the ISO—seemed to be ...

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Editorials

Arizona parties back away from cliff to consider the possibility of compromise

Arizona parties back away from cliff to consider the possibility of compromise

We were pleased—and a little surprised—to learn the Arizona pro-solar and pro-utility combatants and their proxies have agreed to put down their legal weapons (is Arizona an open-carry state?) and discuss possible compromises that might advance their respective interests.

The battle of ballot measures was shaping up to be one of competing constitutional amendments, divisive and costly no matter whi...

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A few things we know about solar

A few things we know about solar

“Where you stand depends on where you sit.” That adage is generally attributed to Rufus Miles, a Department of Labor official in the late 1940s. It has become known as Miles’ Law.

The maxim has many applications, few more appropriate than understanding the positions of disputants engaged in debates over America’s policies toward solar energy development. 

I say this with reference to Karl Rábago’...

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Community solar is ‘right-size’. Users, solar firms, utilities should collaborate

Community solar is ‘right-size’. Users, solar firms, utilities should collaborate

Community solar is a most promising resource—practiced in many jurisdictions, but not the same creature in any two of them. The extent of the several rollouts differ, the applicable size and rules differ, and the degree to which benefits are shared—among utility customers who subscribe, solar developers, and utilities—also differ from one jurisdiction to another.

Even the name changes from place to...

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Guest Editorial: What do today’s consumers really want from the Smart Grid?

Guest Editorial: What do today’s consumers really want from the Smart Grid?

What do consumers expect from their electric utility? What programs and services are they likely to be interested in? And how can utilities earn their trust? 

Each year the Smart Grid Consumer Collaborative (SGCC) releases its annual State of the Consumer Report. This report helps smart grid stakeholders gain a deeper understanding of how American consumers think about and engage with grid mod...

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Net energy metering and the ‘missing money’

Net energy metering and the ‘missing money’

Ahmad Faruqui’s article, “An Economist’s Dilemma: To PV or Not to PV,” has just been published on our website, ElectricityPolicy.com . Among many articles we recommend as “must read,” I think it’s a “really must read”—in part because it is a story, a personal tale of our time, well and amusingly told. It’s filled with the mysteries, frustrations, and discoveries of everyday life, and the occasional “a...

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Going nuclear: A tale of two societies

Going nuclear: A tale of two societies

Two news articles below tell a different tale about the prospects for nuclear power.

In one, we report that China , a monolithic society with centralized decision-making capability that US and European technocrats might envy, will by next year finish building an “inherently safe” high-temperature, gas-cooled reactor that it will replicate if its design and operation prove out. China will build other ...

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