Between the Poles

Distributech2017: Transforming the electric power industry: changing business models, regulation and technology

New York's influential Reforming the Vision (REV) is not only redefining the regulatory model for the State of New York but has become a model for other states.  At this year's Distributech Audrey Zibelman, who was confirmed as chair of the New York Public Service Commission (PSC) on September 3, 2013 and since then has presided over the development of NY REV presented her view of the tranformation the electric power industry is experiencing.   In her view it all starts with the customer who wants more choice, greater reliability and lower rates.  She is convinced that the technology is already there that will enable utilities to  achieve deep decarbonization with improved reliability and efficiency.  The key to all of this is changing the business model for the power network operators.  Distribution companies need to become platform companies (DSPs) that can provide the infrastructure for increasingly dynamic generation as well as demand.  The model has to provide compensation to DSPs who make the network more efficient.  The business model has to encourage innovation that enables transactive energy with technologies such as blockchain and the internet of things.  It has to encourage and attract younger people to the utility industry and encourage third party startups.  In her view being CEO of an electric utility is the best job in the world right now.  Unlike the telecom revolution which led to the digital divide, the electric power transformation has to avoid an energy divide and ensure that lower income folks are included and also experience the benefits of the new power grid.  Very interestingly she said she used to believe this was all going to happen in five to ten years, but with the accelerating momentum in technology and regulation she now believes the transformation of the utility is happening faster than that.  Quite a vision but the NY REV provides a regulatory model that is designed to enable this to happen. New York's utilities are moving rapidly in this direction.

Distributech2017: Transforming electric power industry likened to War of Currents

At Distributech 2017 in San Diego, the opening keynotes used the word "transformation" to refer to what the electric power industry is going through.  Teresa Hansen likened the impact of this transformation to the War of Currents about 100 years ago when George Westinghouse and Nikola Tesla's AC won out over Thomas Edison's DC.  At the Smart Gird Interoperability Panel 2016 Grid Modernization Summit in Washington DC Anne Pramaggiore, President and CEO of ComEd of Chicago, was the first  to call the current business transformation that the electric power industry is experiencing a "revolution".  And many other speakers at the SGIP conference agreed with this characterization. 

Another key theme at this year's Distributech is greater uncertainty.  Philip Mezey, President and CEO of Itron, mentioned regulatory and federal uncertainty specifically referring to the challenge of keeping regulation current with rapidly changing technology and utility business models.  But he sees many opportunities in addition to the challenges.  He mentioned managing deep solar penetration, ensuring cybersecurity, gowing numbers of EV vehicles, transactive energy, the digital grid enabling utilties to optimize power delivery, improved integration with customers, and moving beyond the smart grid by connecting more smart devices all of which are capable of collecting data.  He also believes that this new grid, referred to by some as Grid 3.0, is going to require distributed intelligence because decisions have to be made locally and quickly.

Scott Drury, President of San Diego Gas and Electricity, who aspires for SDG&E to be the best energy utility in the U.S., outlined some of the innovative things that SDG&E is doing to ensure clean, safe and reliable energy for its customers.  It outperforms California's Renewable Energy Portfolio in reducing emissions.  It has over 100,000 rooftop installations in its service territory and boasts that it is able to make the fastest solar interconnections in the U.S.  It is aggressively installing charging stations in its service territory including a target of ensuring 10% of these chargers are in disadvantaged communities.  SDG&E has implemented its own weather network with many realtime reporting stations to help reduce the risk of wildfires.  It has undergrounded 60% of its network.  It has implemented a microgrid in a remote desert community and it is building one of the biggest lithium ion battery projects in the U.S., a substation in Escondido with energy storage capable of delivering 30 megawatts for four hours.