[ad_1]
The role of the electricity consumer is evolving with the adoption of electric vehicles, rooftop solar systems, battery storage systems and smart appliances. Consumers, now able to provide services to support local grid operations, are gradually emerging as important partners for local distribution utilities.
However, our rates, programs and member satisfaction team are all designed around service delivery To Consumers, how will utility models change when procuring services from consumer? And how can utilities prepare to support such changes?
Traditional utility model
The business model of U.S. utilities has historically been centered around providing consumers with safe, reliable, and affordable electricity. Tolls are paid in tariffs and provide utilities with a regulated revenue based on their cost of service.
For investor-owned utilities, their regulated earnings are passed on to shareholders. Shareholders have a fiduciary duty to maximize the value of the utility. For publicly owned communities, profits are often reinvested in the community through capital allowances.
Two megatrends collide
This business model continues to evolve in response to two massive and intertwined changes to the utility landscape: the impacts of climate change and the rapid adoption of consumer-owned distributed energy resources (DERs). I’m here.
Communities Across America Are Facing Increasing frequency and severity of weather-related resilience challengesCommunity members in affected areas have voiced their hopes that utility companies will prepare for these events by preventing outages where possible and restoring power more quickly if needed. .
These community members, and the state legislators who represent them, also Pressing electric power companies to decarbonize Avoid exacerbating climate impacts. 20 states Pass policies to reduce emissions.
In parallel, the utility Watch consumers adopt distributed energy resourcesrooftop solar, batteries, electric vehicles, smart home appliances, etc. at a record pace, independent of utilities.
“Consumers will buy EVs and rooftop solar when it is cost-effective, regardless of whether the system benefits them. We can create market opportunities.” – Chris Villarreal, Plugged In Strategies
As a result, in addition to safety, reliability, and affordability, utility “value proposition” will increasingly include resilience, decarbonization, and ease of DER adoption. Traditional utility business models were not designed to support such expanded goals. New approaches are emerging for how utilities create, deliver and capture value.
New Distribution System Operator (DSO)
the concept of Distribution System Operator (or DSO) It is widely discussed as an attractive model for how electricity is delivered and delivered to local consumers. Visions of how the DSO will actually operate differ greatly, with utilities, research institutes and DER advocates in California, New York, UK and Australia all offering different versions.
“Today, the need for a DSO is more concrete than the concept of a DSO.” – Lorenzo Christophe, The Climate Center
However, regardless of the exact form of DSO, all versions of the distribution system operator model enable consumer-owned resources to provide grid support services at both the distribution and transmission levels.
Public utilities nationwide Experimenting with different approaches to leverage these DERs In many cases, it will support the grid while maximizing consumer benefits as the baby takes steps towards a full DSO model. The most common examples are:
Each of these approaches encourages consumers to coordinate their device interactions with the grid to support the power system. As utilities move to large-scale, real-time dispatch and coordination of his DER, New ways of compensating consumers will emerge, including secondary-level markets – and can have a significant impact on how utilities interact with consumers.
Growing Momentum for Performance-Based Regulation
With the advent of DSOs, regulators and consumer advocates 17 states We are pushing to explore a move from cost-of-service regulation to performance-based regulation (PBR). PBR is a cost-of-service alternative that focuses on desired and measurable outcomes rather than earning revenues based on total capital deployed or a “rate basis”.
usage of PBR aims to better align the utility business model.especially for investor-owned utilities, with an expanding set of goals and responsibilitiesNearly all states pursuing PBR initiatives include a combination of performance indicators of safety, reliability, affordability, resilience, decarbonization, and are often associated with customer satisfaction and Added fairness.
The move to PBR could be one of the most significant changes in how investor-owned utilities benefit shareholders and how community-owned utilities interact with their members.From a consumer perspective, growing interest in metric-driven improvements is driving utilities to New means for decentralized energy resources to play a role and be fairly compensatedUtilities can finally find ways to earn higher returns through decisions such as deferring asset upgrades.
Although it would take years to implement such a change (New York REV started in 2014), Future-proof utilities can get ahead of the transition to PBR By offering new options for consumer participation and evolving our relationship with regulators to better align utility returns with positive community outcomes.
Prepare for change
All these changes combine to create a complex picture of what future utility business models will look like. But regardless of the exact version that appears, Utilities can and should prepare for change.
in Camus, Bring together related utility operating systems – SCADA, GIS, DMS, AMI, etc. – Using DER and customer data is an important step for utilities to take today. To better understand how DER can support grids. Adding grid awareness and market integration to traditional DERMS capabilities, the DER orchestration platform is an important step towards the future of DSOs, enabling grid operators to address today’s challenges and evolve their business models to treat consumers as partners. helps you get started.
Hear live from utility executives on Distributech
Curious about what major utilities and technology providers think about the evolving role of their customers and members?
joining Audrey Gibelmann (Former New York PSC Chairman, former AEMO CEO), James Conrad (PPL Electric Distribution Operations Director), Cyril Brunner (Innovation Lead, Vermont Electric Cooperative), and Astrid Atkinson (Camus Energy CEO) live panel discussion It will be held at Distributech on Tuesday, February 7th.
Can’t you go to San Diego? apply For a post panel summary.
[ad_2]
Source link
