6.1.a. ERMUSR 11-18-2014 - Laserfiche WebLink

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Power to the People and Impact of Emerging Technologies Emerging technologies are presenting the sale of excess generation produced by customers back power and utility industry with a series of to the grid under net energy metering(NEM)policies. Lower electricity sales volumes(i.e., kWh)due to NEM opportunities and challenges in an era of means that utilities will have to charge higher prices or decreasing retail sales and increasing customer impose bigger fixed charges in order to maintain and invest expectations. Recent innovations will undoubt- in T&D infrastructure. edly spur the evolution of the utility business • Microgrids could also play a role in developing new utility model for both regulated and nonregulated business models in which pockets of customers are companies, as well as open the door for interconnected and supplied from smaller, local generation nontraditional service providers such as utility- resources, rather than continuing to obtain power from the scale and distributed solar energy companies. grid that has been produced by utility scale power plants. Microgrids could provide an answer for companies needing At the forefront of this industry transformation are a group less high voltage transmission but a stronger local distribution of disruptive technologies including smart grid, distributed network. Many utilities are looking at microgrids as a way to generation (e.g., solar photovoltaic (PV), combined heat avoid and/or better manage weather-related power outages, and power (CHP), fuel cells), and microgrids. and help differentiate what is otherwise a homogeneous product.They are also investigating the role microgrids could • Smart Grid Technologies include a group of software play in the utilization of distributed generation. and hardware technologies that enhance the measurement, management and delivery of energy on electric grid. Utility regulators generally are favorable towards Examples include real-time two-way metering, advanced communication systems and load monitoring devices.The distributed technologies and microgrids, and often promise of smart technologies and systems includes more provide incentives for them, which present competitive efficient operations, more rapid recovery from unplanned challenges. This can also be an opportunity for the outages, the integration of intermittent(wind and solar) distribution utility to make investments in smart grid tech- renewable energy, and the ability for customers to better nologies that improve grid stability and optimize variable leverage energy management systems and distributed resources. Enhancements in both large scale and distrib- energy sources. Smart grid systems are still in the process uted energy storage, cloud computing, and data analytics, of realizing their full potential.Various regions have begun also have the potential to transform utility operations. initial implementation of certain technologies, and the product offering themselves continue to rapidly evolve and improve. Weighing Delivery Choices and Technology • Distributed Generation (DG) is not a new concept. However, recent cost declines in the solar energy supply Within the past decade, there has been an industry-wide, chain, and a series of government incentives like federal government-supported call to action for utilities to invest and state investment tax credits (ITCs)and state-level net in new technologies that drive progressive business metering policies have made distributed generation more strategies. However, there is also consistent pressure to ubiquitous over the last several years. DG can create both focus on traditional priorities including providing reliable technical and financial challenges for utilities. Increased service without the need to increase customer rates. reliance on intermittent generation from distributed renewable resources like rooftop solar PV require careful interconnection While inaction could ultimately result in a decreasing and asset inventory planning studies by distribution utilities customer base and declining shareholder value, allocating to ensure that grid reliability and frequency stability can be capital and personnel to technologies that do not support maintained. From a financial perspective, the majority of a utility's core business model can result in capital expen- states in the United States have enacted laws to support the ditures that increase the risk of an insufficient return on KPMG Power to the People and Impact of Emerging Technologies 14 112