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

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Let the Debate Begin resource and financial planning. This can be accomplished by considering a number of key questions, including: These developments have triggered debates in regulatory proceedings in a growing number of states. For example, How much are different types of customers willing state regulators recently authorized Arizona Public Service to pay for greener energy? Is that willingness to pay (APS) to temporarily charge net metered solar PV higher, lower, or the same if the energy is provided by customers a 70 cent-per-kilowatt ($5.00 per month) fixed distributed generation resources, rather than utility scale generation resources? charge, and deferred the broader issue to the utility's next general rate case. "I view Arizona as a victory for the What is the total actual cost of different distributed vs. utilities," said Gimigliano. "In their attempt to recapture utility-scale renewable energy generation resources, cost from solar customers, establishing a fee sets a and how do those costs compare with the cost of precedent as one way to tackle recouping some cost. electricity generated by conventional resources?What Arizona's$5 fee may well set the floor, not the ceiling, is your company's plan for communicating these costs for the magnitude of fees in other states." However, as to your customers and regulators, and how will it measure the success of those efforts? Perlstein noted, "The debate is far from over, if only because the actual cross-subsidy solar PV customers of Are net metering and other public policies in the APS are receiving is more than $5 per month." jurisdictions in which your company serves The issue is being debated in a growing number of states customers subsidizing certain generation technologies and/or energy providers over others?Are those with significant solar generation potential. The discussion differences consistent with public policy, and/could is particularly vigorous in Colorado and California where a those incentives be provided in a more efficient way? 2013 California PUC-sponsored study concluded that What is your company's strategy for engaging the current$1 billion cross-subsidy received by net regulators and other key stakeholders on these issues, metered solar PV customers will reach $20 billion by and what policy changes would your company like to 2020. This debate is growing, and is unlikely to be see? How would your company articulate and measure resolved for some time. the benefits of those policies? Regardless of the magnitude of the impact of distributed What role(s), if any, should your regulated utility or its and utility-scale generation on retail electricity prices, it nonregulated subsidiary play in the growth of distrib- may be time to be much more direct and transparent uted generation within and/or outside your regulated with customers regarding the actual costs of distributed service area? Should it own, lease,and/or help custom- generation. Direct customer communications, rate design ers finance their purchases of distributed generation changes and tariffs could be adjusted to accomplish this. systems?What is your company's strategy for engaging Adding the correct pricing signals may have the added regulators and other key stakeholders on these issues, and what policy changes would you like to see? benefit of encouraging energy management and conservation efforts by customers, mitigating rising What impact is the design of your current electricity energy costs. Ultimately these actions should result in rates having on the strength of customer preferences more sustainable greener energy strategies and policies. for or against distributed generation, as opposed to purchasing power produced by conventional generation Therefore it's important for utilities to be active in working resources? Should certain retail rates be redesigned to with regulators and other key stakeholders in refreshing remove unintended incentives,or add incentives, energy policies in areas they serve and to take a fresh look in light of public policy and utility goals?What is your at their own strategies for enhancement. company's strategy for engaging regulators and other Key Considerations for Your Distributed key stakeholders on these issues, and what policy changes would you like to see? and Green Energy Strategy How will your company's renewable and distributed In light of these developments, it may be time for your 6 energy resources and/or policies be affected by foresee- company to focus more on its green and distributed able innovations in energy storage, fuel cell, and/or energy generation policies and strategies in doing microgrid technologies or changes in natural gas prices? KPMG Regulatory Issues Associated with Distributed Generation and Renewable Energy 17 115