Between the Poles

Call for Between the Poles Editorial Committee Members

Between the Poles (BTP) is looking to create an Editorial Committee.

Between the Poles is an engaging blog created by the late Geoff Zeiss to discuss everything about infrastructure and underground utilities in the construction process. Zeiss strongly advocated on issues of importance in utilities, infrastructure and other industries. The blog also addresses issues and updates. It currently continues under the care of GoGeomatics Canada.

We are asking the community to join us as we work on various projects together.

Our goal is to meet once a month online to manage and coordinate content in line with Geoff Zeiss’s efforts. This group will also vet submitted articles.

Articles can also be submitted even if people don’t want to join the committee.

There are two efforts, where you can get involved.

1. "BTP Editorial and Writing Committee" to help generate and vet content for Geoff's Between the Poles Blog. It is envisioned that the BTP committee would meet once a month on Zoom to discuss story ideas and coordinate content.
2. Join the Geoff Zeiss Infrastructure Research endowment efforts to help steer that.

The goal is this group will work within the Canadian Underground Infrastructure Register (CUIR) umbrellas initiative as a subcommittee.

Sign-up to volunteer

 

Geoff Zeiss' Memory Lives on in Urban Infrastructure Mapping Fund | Carleton FutureFunder

For over 30 years, Geoff Zeiss devoted his life to the Geospatial industry and community all over the world.

It was a life focused on the utility and construction sectors, mapping underground utility infrastructure, BIM, CAD, Geospatial interoperability, machine learning, and substation design among other interests. Zeiss was responsible for multiple large and prosperous implementations of records management software and locator-aware enterprise designs.

Zeiss was a knowledgeable, busy, productive, and inspirational individual. He was an author, speaker, creator, leader, and so much more. Holding a Doctorate from McGill University and a Bachelor’s Degree from Cornell University, Zeiss gained experience working in various positions (President, Vice President, Director) for companies such as Tydac Technologies, VISION, DPA, and Autodesk.

Zeiss was an active advisor to National Underground Asset Registry, Minnesota Geospatial Advisory Council Emergency Preparedness Committee, and Singapore Digital Underground Initiative. He wrote articles that appeared in LIDAR Magazine, was Editor for Energy and Building with Geospatial Media (2014-2016) and was involved in founding the Open Sources Geospatial Foundation from 2005-2006.

Throughout his life, Zeiss was a man dedicated to promoting the awareness and evolution of geospatial data, underground utilities, and technology. He often spoke about the importance of mapping underground utilities and infrastructure issues. Zeiss supported open standards as a director of the Open Geospatial Consortium.

With enthusiasm, Zeiss often spoke at events and forums all over the world. He made time for participating in, as well as being a founder and Conference Chair of, SUMSF. Throughout his life, Zeiss also participated in the Geospatial World Forum, Where 2.0, Location Intelligence, MundoGeo Connect, India Geospatial Forum, Middle East Spatial Geospatial Forum, Asia Geospatial Forum, and GITA events.

Zeiss was recognized for his dedication and efforts. During the years 2007 through 2009, he received Speaker Excellence Awards at GITA. He also received one of ten global technology awards from Oracle Corporation for ‘technical innovation and leadership in the use of Oracle’ in 2004. Zeiss continued his work, and at the Geospatial World Forum in 2014, he was yet again recognized for his efforts to increase the awareness of geospatial data and utility awareness. Zeiss received the Geospatial Ambassador Award.

Besides speaking, Zeiss created Between the Poles, a thought leadership blog where he advocated on issues of importance to the community. The blog addresses infrastructure issues and updates, and continues today under the care of GoGeomatics Canada, keeping Zeiss’ life mission of awareness and information moving forward.

Sadly, Geoff Zeiss passed away Sept 14, 2022. 

The Geoff Zeiss Urban Infrastructure Mapping Fund builds on decades of innovation by Dr. Zeiss in developing effective and
sustainable urban infrastructure through research and development supporting urban information systems.  The goal will be to focus on the democratization of utility mapping, creation of infrastructure digital twins, and modernization of data workflows in global construction and infrastructure management. The potential for new technologies and methods to facilitate crowd-sourced mapping and more equitable data access will end the monopoly of publicly funded private assets and improve both efficiency and safety of the construction industry. Depending on the funds raised, several exciting possibilities exist, from graduate student scholarships to post-doctoral fellowships to longer-term and endowed research positions.

Carleton University is an ideal place to house such a research fund. The Department of Geography and Environmental Studies excels at integrative scholarship, bringing together expertise in geomatics, physical and human geography, and environmental studies, while working closely with the researchers from engineering, architecture, industrial design, public policy, law, communications, and urban planning. This multi-sector, interdisciplinary approach is necessary to innovate across the complex socio-technical domain of urban information systems.

Please consider marking Geoff’s legacy with a contribution in his honour to advance this important research.

 

Author: Jon Murphy

Jonathan Murphy is the founder and Managing Director of GoGeomatics Canada, the most popular communications hub for the Canadian geomatics sector. Jon is the founder and chair of GeoIgnite - Canada's national geospatial leadership conference.

Jon has created Canada’s largest professional geospatial network, with the goal of strengthening and empowering our geospatial ecosystem. Jon has had broad range of global experience in marketing and sales for geospatial businesses across a number of sectors and regions globally. He holds a bachelor's degree in Archaeology from the University of Calgary and advanced diplomas in GIS and geomatics from COGS. Jon is a Fellow of the Royal Canadian Geographical Society. In 2020 he joined the ISO/TC 211 Geographic information/Geomatics Technical Committee responsible for the ISO geographic information series of standards.

 

 

An update on the Canadian Underground Infrastructure Register initiative

In this blog last month, Geoff introduced the Canadian Underground Infrastructure Register (CUIR) initiative to his readers and outlined the basic intent and reasoning for the CUIR (rhymes with “cure”) initiative and other similar initiatives underway or already in service in jurisdictions outside of North America. Although the intent of each of these initiatives is essentially the same, to reduce the risk and cost associated with working on or near buried infrastructure by providing better information to the stakeholders, each one has its own set of variables that will impact or have impacted the functional design of the delivered solution.  

This article intends to update the CUIR Team’s progress and to provide details on the proposed process and its similarities with aspects of other current international initiatives including how the data is managed, and how system access and database security concerns are addressed.

The CUIR project started in earnest at the beginning of the year, and we currently have over forty individuals on the team representing various stakeholder groups at the Federal, Provincial, and Municipal levels, non-government organizations, and various industries and service providers. Our primary focus areas are continued stakeholder identification and engagement, research activities related to like initiatives, business requirements gathering, and preliminary architectural and process design work. 

Focus area findings and opportunities

The project team is growing each month, however, we still need to ensure that every group in the stakeholder community is represented. If you work for a firm with underground assets and you are involved in damage prevention or other EHS activities in your company, we would like to hear from you so that we can ensure that your industry group is adequately represented in the project.

As mentioned above, there are like initiatives either underway or deployed in other countries. We are reviewing each of these initiatives with the view of engaging with them to work together to exchange design ideas and functionality, and to support each other by working on elements that are common in nature such as the data exchange agreements, formats, and processes.

For example, the National Underground Asset Register project in the UK, the Cable and Pipeline Information Portal (KLIP) in Flanders (Belgium), and others are using the Open Geospatial Organization’s (OGC) Model for Underground Data Definition and Integration (MUDDI) as the basis for the integration of datasets from different models. The OGC MUDDI is the model that we propose to use for the exchange of data in the CUIR initiative.

We intend to provide registered users the asset location information, but due to data security concerns, we will not be providing users access to a separate database or access to a system of record. Very much like the Belgian KLIP initiative, we will employ a process where the registered user draws the area of interest on a map to initiate the information request. Below is an excerpt from the article “Nobody Knows What Lies Beneath New York City” written by Bloomberg’s Greg Milner, and provided to us by Alan Leidner currently working on the New York University’s Underground Resilience Measures (UNUM) project in New York City.  

Not just anyone can gain access to the Belgian map. A contractor who wishes to dig underground must submit the coordinates of the work area via a computer portal called KLIP. The request goes out to all stakeholders with infrastructure running beneath the area, which is required to turn over their data. The information is then synthesized and sent to the requester as a single document. 

“We have a decentralized architecture concept,” says Jef Daems, a KLIP official. “All network utility companies have their master database, and it is only a very small part of the network that is provided to the contractor.”

State and Provincial One Call Centers

We are hoping to engage with the One Call Centers and have them become the backbone of the system and employ their “Click before you dig” process to create a ticket showing a polygon of the area of interest and when each affected member receives the notification, they would use the extents of the polygon as a spatial filter to identify the infrastructure, if any, that they have in the area identified in the ticket.  As each utility owner sends the requested data, much like the NUAR and KLIP systems, the information from each asset owner would be imported as a layer and conflated onto a common base map that the requestor can then view by selecting the One Call ticket on a computer or mobile device as a set of layers that can be switched on or off. 

For Designers, using this information will provide them with a basic appreciation of the location of existing buried infrastructure to help them make better design decisions. Capturing accurate infrastructure location data to ASCE 38:22 Standards during subsequent pre-construction site investigation in support of the design work and providing it back to the asset owners will provide Owner’s a great opportunity to improve the accuracy of their records at virtually no cost.

For Locate Service Providers, receiving a locate request containing a showing the extent of the excavation site, and the location of each utility by the owner will allow them to ensure that during the mark-outs using stakes or paint, nothing is missed. By capturing the precise location of each infrastructure item electronically using GPS, the locate technician will also be able to provide an “as-found” file back to each asset owner to improve the accuracy of their records at little to no additional cost. 

In both of the above scenarios, the information captured electronically prior to the start of construction can be made available to the contractor as a map showing the work site and an overlay of the various layers depicting the existing utilities. The provision of an electronic map to the contractor showing the location of each facility on the work site will improve the situational awareness and safety of personnel.  As Geoff mentioned in a post last August, a contractor on a Colorado DOT Highways project estimated that the ability of their excavation crews to see an electronic map showing the accurate location and nature of buried facilities on a job site has translated into an over 90% reduction in the number of lines strikes, cost of damages, schedule delays, and risk of injury to personnel. Every project that involves soil disturbance not only presents an element of risk for excavators, but also provides an opportunity for asset owners to benefit from that work in the form of data gathered that can be utilized to improve the records in their database.

We continue to reach out to other like initiatives underway to engage with them and see if there are opportunities to collaborate to learn from, and support, each other.

 

Submitted by: SteveSlusarenko,Process Design Consultant

"I am working with some like-minded individuals that are proposing a major improvement to the damage prevention process here in Canada. Our intent is to virtually eliminate line strikes on buried infrastructure during any type of excavation or other ground breaking activity.

 

Accelerating disruption in the electric power industry

Back in 2016 Gartner predicted that by 2020 the largest electric power company will be an Uber-like behemoth that will not own assets but will simply manage energy suppliers and energy consumers in an open market.

At that time I blogged about three large Las Vegas casinos' plans to leave the NV Energy utility grid.  MGM Resorts left the grid in 2016 even though required to pay $86.9 million in exit fees to do so.  This trend has accelerated.  In 2018, 10 companies began efforts to leave Nevada’s utility monopoly, NV Energy.

Regulators in some jurisdictions have recognized that the traditional business model for electric power no longer works in this age of decentralized power generation.  New York's REV initiative and Texas' ERCOT deregulation initiative have become models for other states for modernizing power generation, transmission, distribution, and retail.  The central tenet of modern utility regulation is to restrict traditional utilities to owning and maintaining power transmission and distribution lines.  Matching power generation and consumption power is through an open, unregulated transactive energy market.  Open markets tend to encourage decentralized, renewable energy generation.

In 1999, the Texas Legislature began restructuring the state’s electric industry which allowed consumers to begin choosing their retail electricity provider. As of Dec. 31, 2001, deregulation of the ERCOT electricity markets required investor-owned utilities to unbundle their operations. The provision of service to end-use retail customers became competitive. There are over 100 retail electricity providers of which more than a quarter offer a 100% renewable plan to their customers as an option. Since 2002, approximately 85% of commercial and industrial consumers have switched power providers at least once.

In Illinois in 1997 the Customer Choice Act mandated that state utilities could no longer own generation facilities. During the Mandatory Transition Period 1997–2007, utilities were required to sell their electricity generation assets to other energy companies. Utilities no longer sold power and became responsible for delivering electricity only. Since 2002 in the deregulated market, customers were permitted to buy electricity from competing retail electric providers. In 2006 the Retail Electric Competition Act encouraged residential and small business customers to switch to alternative electric providers.

in July 1999, Ohio restructured its energy market to give consumers choice with their energy provider. The law took effect on January 1, 2001. Customers could now choose to buy energy from retail electric suppliers instead of automatically receiving it from the utility company (primarily AEP Ohio, Dayton Power & Light, Duke Energy, and FirstEnergy) in their area. In May 2008, each incumbent utility was required to shed its power generation operations and become a purely electric distribution utility.

All of the big technology players (Google, Apple, Amazon, Facebook) are already indirectly disrupting the electric power generation industry with commitments to billions of dollars of renewable power generation which has driven over $15 billion in investment in wind and solar power generation.

The latest battleground is Virginia where Costco's and Walmart's requests to leave Dominion Energy's grid have been rejected by the Virginia's State Corporation Commission (SCC) Division of Public Utility Regulation. Kroger, Harris Teeter, Target, Albertsons and Cox Communications all currently have exit applications pending at the commission.

The Virginia Energy Reform Coalition (VERC) includes policy experts from across the ideological spectrum aimed at breaking the monopoly held by two utilities, Dominion Energy and Appalachian Power in favour of a deregulated energy market.   VERC cites ERCOT as an inspiration, for restricting utilities to owning transmission and distribution lines and no longer selling electric power.

I remember back in 2013 John Wellinghoff, then Chairman of FERC, saying that these changes in the electric power industry are driven by power consumers - industrial, commercial and consumer.  "People are going to continue to drive towards having these kinds of technologies available to them. And once that happens through the technologies and the entrepreneurial spirit we are seeing with these companies coming in, I just don't see how we can continue with the same model we have had for the last 100 or 150 years...You need whatever you do need - it may be a wind system providing power remotely, it may be a battery system for storage, it may be a local generation system, solar PV or natural gas, or a combined heat and power system. But whatever it is, it is what the consumer needs at the cost level that is appropriate and the reliability level they think is appropriate based upon their choices."

Consumers wanting to be in control of their energy, corporations wanting to reduce their power costs and reduce their emissions, the world wide drive for more sustainable energy, and dropping wind and solar energy costs are all making the traditional business model unsustainable.  Regulators who see the future as a transactive energy market with traditional utilities providing infrastructure such as New York and Texas are prepared for the future.  Others are going to experience increasing pressure from consumers and corporations who want the freedom and flexibility of going off the grid.

Next generation weather satellite will support nowcasting

As the electric power industry generates increasing amounts of renewable energy from intermittent sources such as wind and solar PV, the ability to nowcast radiance and wind velocity with km resolution up to 25 minutes in advance has become essential to balancing electricity demand and supply.  This is the newest area where geospatial technology (wind at different altitudes, radiance, and temperature mapping) November 4 of this year NOAA and NASA will launch the GOES-R geostationary weather satellite which will provide support for nowcasting across the continental U.S..

GOES-R's Advanced Baseline Imager (ABI) will collect three times more data and provide four times better resolution and more than five times faster coverage than current GOES. The GOES-R series satellites will also carry the first lightning mapper flown from geostationary orbit. The Geostationary Lightning Mapper, or GLM, will map total lightning (in-cloud and cloud-to-ground) continuously over the Americas and adjacent ocean regions.  GOES-R will provide coverage over a 1000x1000km box with a temporal resolution of 30 seconds, and spatial resolution of 0.5 to 2 km. It will completely scan the continental U.S. every 5 minutes, providing coverage of the 5000km (E/W) and 3000km (N/S) rectangle over the United States.

The Advanced Baseline Imager (ABI) supports a wide range of capabilities relating to weather nowcasting and climate monitoring including aerosol detection and measurement, including smoke and dust, clear sky masks, properties of clouds and moisture, downward shortwave radiation,  fire/hot spot characterization, hurricane intensity estimation, land surface temperature, radiances, rainfall rate, reflected shortwave radiation, sea surface temperature, snow cover, total precipitable water, and volcanic ash properties.

GEOS-R enables “nowcasting” of severe storms across the continental United States. GOES-R will fly the first operational lightning mapper flown in geostationary orbit.  It will cover land and oceans. Total lightning (in-cloud, cloud-to-cloud, and cloud-to-ground) information from GOES-R will increase lead time for severe storm warnings because it will make it possible to observe areas of severe weather every 30-60 seconds. This will enable more reliable warnings and evacuations.

Transactive energy may be based on blockchain

There is little doubt that "transactive energy" is in the future of electric power in North America, which already has continental grids, and in the EU with the development of the EU's supergrid.  The world is rapidly developing the technology that allows energy flows to be  determined by market forces (transactive energy).   By analogy with Uber and Airbnb, Gartner has predicted that by 2020, the largest energy company in the world (by market cap) will not own any network (grid) or generation assets.  It will manage information about energy sources and consumers.  Another option is a decentralized,distributed transaction system that allows generators such as you and I as well as traditional large scale utility generators to sell energy to you and me and other users, but without a centralized transaction manager.

Blockchain is a decentralized, distributed database for managing transactions.  Blockchains provide a global infrastructure untethered from the stability or permission of governments and institutions.  It is the technology underlying Bitcoin. The generalized version is often referred to as blockcoin 2.0.  Blockchain supports smart contracts.  Nasdaq and other financial institutions including banks have been experimenting with and developing applications based on blockchain technology. Nasdaq has opened its blockchain services framework to more than 100 of its market operator clients around the world. The blockchain services are part of what Nasdaq calls its "Core Services" component which serves as a hub for its financial applications.  Late last year an issuer was able to use Nasdaq Linq blockchain technology to successfully complete and record a private securities transaction - the first of its kind using blockchain technology.  Chain.com, a Nasdaq Linq client and blockchain developer, documented its issuance of shares to a private investor using Nasdaq's blockchain-enabled technology.

Earlier this year Nasdaq demonstrated a blockchain service that lets solar power generators sell energy certificates (Nasdaq Explores How Blockchain Could Fuel Solar Energy Market).  The project is part of a collaborative effort between Nasdaq and design firm IDEO's CoLab to facilitate partnerships that take a design-based approach to creating human-usable technology.  Internet connected solar panels have been developed with technology provided by Filament , a Nevada-based blockchain startup. Its technology allows traditional electronic devices to be connected online.  The solar panel is actually hard-wired into the IoT device through a converter which enables Nasdaq to measure the wattage the panels are generating into the grid.  Using the API of Nasdaq's blockchain-based private markets platform, anonymous certificates are created which can be sold to anyone who wishes to subsidize solar energy.  The cryptographically verified certificate, representing solar power generated in the western US, appeared live on the screen in New York City.

Nasdaq is not the only organization exploring blockchain for energy transactions.  Brooklyn-based startup LO3 has partnered with Consensus Systems on TransActive Grid which is combination of ​software ​and hardware ​that enables members to buy and sell energy from each other securely and automatically, using smart contracts and the blockchain.

In Vienna, Grid Singularity is using blockchain to support energy-related transactions. "Damit haben wir (fast) alles beisammen, was in der neuen Energiewelt relevant ist oder kurzfristig wird: dezentrale Energieversorgung, Digitalisierung, disruptive Geschäftsmodelle, Smart Contracts, Blockchain, Kryptowährung.  Als Wegweiser in die neue Energiewelt, haben wir am 23. Mai 2016 den 1. Blockchain-Tag in Deutschland veranstaltet." (We've just about got everything we need for the new energy world, decentralized energy distribution, digitization, disruptive business model, smart contracts, blockchain, and cryptographic security.  As a signpost to the new energy world, we have instituted May 23, 2016 as the first Blockchain Day in Germany.)

Australian startup Sun Exchange has developed a platform that lets investors back small-scale solar projects and receive monthly dividends. 

MIT start-up SolarCoin (SolarChange in the US and EU) pays people with an alternative digital currency for generating solar energy.  SolarCoin is based on Bitcoin technology.  The original concept for SolarCoin required a central bank. Blockchain is decentralized making the central bank unnecessary.  People earn coins as a reward for generating solar energy.  People with solar panels on their house receive solar renewable energy certificates from their energy company in return for feeding a megawatt-hour of electricity back into the grid. These certificates are already traded for cash, but if you present them to SolarCoin you will get a coin. SolarCoins are now given in 23 countries. The SolarCoin market cap is currently estimated to be about $2 million.

MGM Resorts agrees to pay over $80 million to leave the grid

MGM Resorts is planning to leave the NV Energy grid in October even if it has to pay $86.9 million in exit fees to do so.  Wynn is also planning to leave the NV Energy Grid late this year, but is challenging the legality of the calculation of exit fees.  The casinos plans to leave NV Energy under a law passed in 2001 law that allows corporate customers to leave the power grid. MGM's plan to exit still requires Public Utility Commission (PUC) approval.  Another casino Las Vegas Sands Corp has dropped plans to leave the grid, presumably deterred by the large exit fee.

Reportedly a number of states in the U.S. have legislation allowing large corporate customers to leave the grid. In about 18 of these like Texas and Georgia there are no exit fees.  In others such as Nevada there are exit fees though the legality of large exit fees is being challenged.

NV Energy has a green tariff program, called Green Energy Choice in northern Nevada, that offers customers the choice of using 100 percent or 50 percent renewable energy but they have to pay an additional amount on their monthly bill for using renewables. But MGM Resorts has signed 20 year power purchase agreements (PPAs) with independent power suppliers who can supply renewable power much cheaper than NV Energy can.  So much cheaper that MGM is willing to pay over $80 million to leave the grid.

New York PSC takes major step toward transactive energy with REV

Gartner has predicted that by 2020 the largest electric power company will be an Uber-like behemoth that will not own assets but will simply manage energy suppliers and energy consumers in an open market.  This business model requires transactive energy, where energy flows are determined by market forces.

The New York Public Service Commission (NYPSC) has taken a major step toward a future of transactive energy.  New York's "Reforming the Energy Vision" (REV) is moving the New York state electric utility industry toward a radical redefinition of utilities as we have known them over the past hundred years since Tesla and Edison created the electric power industry.  In the future in New York State the utility industry will be comprised of distributed system platform (DSP) providers, basically providing the grid but not directly selling energy, and a competitive energy market with consumers and many energy providers including bulk power generators and distributed energy generators including you and me with rooftop solar panels.  This model has similarities with the UK model which is disrupting the traditional energy market in the UK..  The development of the REV model is being closely watched by many utilities who see the writing on the wall and hear the death knell of the utility business model we have known for the past 100 years.

In 2014, Governor Cuomo announced REV with the intention to develop an integrated energy network able to combine a central grid and distributed power generation.

May 19, 2016 the New York State Public Service Commission (NYPSC) adopted Order Adopting a Ratemaking and Utility Revenue Model Policy Framework (Download New York REV Ratemaking May 2016 NYPUC {D6EC8F0B-6141-4A82-A857-B79CF0A71BF0}), an order that outlines ratesetting for a multi-year regulatory-driven process to reform the electric power utility business model in New York State.  The NYPSC has made it clear that this process has to occur much more rapidly than regulators and utilities are accustomed to. The order states that the historic pace of regulatory change is inadequate, because recent developments in this and other industries demonstrate that slow and deliberate progress is not always an option and may no longer be acceptable.   The NYPSC intends to establish a regulatory environment that encourages faster adoption of business model change that it sees as necessary.

For the electric utility industry which is facing large infrastructure needs, decreasing system efficiency, environmental demands, weather and customer driven resilience requirements, customers who want more choice, and technology that is decentralizing the grid, the current utility and regulatory model could lead to grid defection, stranded investments and increasing financial challenges.  The NYPSC has recognized that the structure of competitive markets outside of the utility industry has changed dramatically and the utility sector, which has been insulated from the opportunities and the competitive pressures of the modern information economy, is now going to have to change rapidly.  Technology in a competitive market reduces excess inventory, increases asset utilization, and makes possible innovative marketing strategies.  As a result, the traditional utility’s role has evolved to a platform service that enables transactive energy in the form of a multi-sided market in which buyers and sellers interact. 

In February 2015 the NYPSC adopted a regulatory policy framework Regulatory Policy Framework and Implementation Plan ( Download New York REV Framework NYPUC {0B599D87-445B-4197-9815-24C27623A6A0}) for REV which defined the framework for changing regulatory rules for ratemaking.   The key elements of the framework are

• The reformed electric system will be driven by consumers and non-utility providers, and it will be enabled by utilities acting as Distributed System Platform (DSP) providers. Utilities are responsible for reliability, and the functions needed to enable distributed markets are integrally bound to the functions needed to ensure reliability.
• It is our conclusion that requiring the utilities to serve as DSPs under our regulatory authority and supervision is in the best interests of New York consumers.
• By expanding the role of the utilities to include DSP functions, utilities will have the regulatory obligation, operational capability, and economic incentive to optimize the use of DER (distributed energy generation).
• As the platform provider, utilities will not participate as owners of DER where a market participant can and will provide these services. Thus, with the few exceptions discussed, DER will remain a non-utility service provided by the competitive market.
• In order for distributed generation to compete on an equal footing, interconnection with the grid must be enabled through technical rules and processes that are not only safe but also efficient and expeditious.
• Each utility will serve as the platform for interface among its customers, aggregators, and the distribution system. Utilities will respond to new trends by adding value, thereby retaining customer base and the ability to raise capital on reasonable terms. Simultaneously the utility will serve as a seamless interface between aggregated customers and the NYISO (The New York Independent System Operator (NYISO) operates competitive wholesale electric power markets).

Reforming ratemaking

The NYPSC cites three principles of the Framework Order as particularly relevant to the reform of ratemaking.

1. The unidirectional grid must evolve into a diversified distributed model engaging customers and third parties.
2. Ensuring universal, reliable, resilient, and secure delivery service at just and reasonable prices remains a function of regulated utilities.
3. The overall efficiency of the system and consumer value and choice must be improved by achieving a more productive mix of utility and third-party investment.

The NYPSC states that utilities will remain regulated, but will have new ways of generating revenue and creating investor value:

1. traditional cost-of-service earnings
2. earnings tied to achievement of alternatives that reduce utility capital spending and provide consumer benefit
3. earnings from market-facing platform activities
4. transitional outcome-based performance measures.

The new ways of generating revenue are intended to create a regulatory environment where utilities can create shareholder value, comparable to or superior to conventional investments, by integrating third-party solutions and capital that improve the efficiency, resiliency and flexibility of the physical networks, reduce consumer total costs and achieve the State’s policy objectives.

Specifics

The specific measures that the NYPSC intends to mandate for the utility sector in New York State includes

• Platform service revenues - new forms of utility revenues associated with the operation and facilitation of distribution-level markets.
• Earning Adjustment Mechanisms- there are temporary, short-term measures that are intended to bridge the transition form the current business model to the new model.
  • System efficiency: Each utility will propose a peak reduction target and a load factor improvement target.
  • Energy efficiency: The Clean Energy Advisory Council will develop targets for energy efficiency.
  • Customer engagement:  Utilities will be able to propose positive opportunities based on customer uptake in innovative engagement programs.
  • Interconnection: A positive earning opportunity will be developed based on satisfaction surveys of DER providers regarding utilities’ progress in timely and cost-effective interconnection approvals.
  • Affordability: To assist low-income conumers, affordability metrics will be established as scorecards, and financial incentives will be established in rate cases as appropriate.
• Greenhouse Gas reductions: The NYPSC is considering a Clean Energy Standard to achieve the State’s target of 50% renewable generation by 2030.
• Competitive market-based earnings: Unregulated utility subsidiaries are authorized to engage in competitive value-added services.
• Data access. The conditions under which utilities may charge for individual customer usage data are established. Standard reporting of aggregate customer data is provided for. Certain basic levels of information will be free of charge, while utilities may charge a fee for provision of more refined data or analysis.
• Opt-in rate design: Voluntary participation in advanced rate design will be encouraged by financial incentives and scorecard metrics
• Mass-market rate design:  An analytic approach will be used to examine bill impacts, for different types of consumers, Programs will be targeted toward different categories of consumers
  • Traditional consumers — customers who don't actively manage their energy consumption
  • Active consumers — customers who use DER with the purpose of reducing their bills
  • Prosumers — those customers who install solar PV generation or other technologies that allow them to sell energy to the grid

It was also recommended that a method be developed for valuing the contributions of distributed energy generation (DER).  This is intended to be used in valuing DER such as solar PV.  It would be used to reform net energy metering (NEM).  Net metering allows solar users to receive credit for excess power back to the grid at retail rates. In the immediate future it is recommended that the current NEM policy should be continued for small rooftop installations.  (A partnership of solar providers and utilities has just filed a proposal for maintaining NEM with the NYPSC)

Nevada PUC transitions residential customers to cost-based net metering over 12 years

The Public Utilities Commission of Nevada (PUCN) has announced new net metering rules and rates for residential customers. The order implements a structured transition to cost based rates for net metering customers over twelve years.

Customers will be required to pay a fixed basic service charge plus a charge per kWh of power they consume. If they generate power with rooftop solar PV panels, NV Energy will provide a credit per kWh that the customer delivers. 

The rates that the PUCN sets for services provided by NV Energy, as well as the value of the credit for excess energy delivered by net metering customers, will be reset by the PUCN periodically. The  forecast for these rates in Southern Nevada are listed below.

Date	Basic service charge	Cost/kWh (cents)	Credit/kWh (cents)
Prior rate	$12.75	11.3
Jan 1, 2016	$17.90	11.1	9.2
Jan 1, 2019	$23.05	10.6	7.4
Jan 1, 2022	$28.21	10.6	5.7
Jan 1, 2025	$33.36	10.4	4.2
Jan 1, 2028	$38.51	10.2	2.6

Residential electricity consumption in Nevada averages 935 kWh/month. 

The above scenario projects that the average monthly bill (for customers without rooftop PV) would rise from $118/month in 2015 to $134/month in 2028, which is about 1% per year, likely less than inflation, so that represents a small decrease in the monthly bill. 

If the customer generated, say, half of his/her own power with solar PV, the bill would increase from $26.63/month in 2016 to $73.71/month in 2028, which is an increase of nearly 10% per year for the same amount of grid delivered power.  Of course if the customer took advantage of time-of-use pricing and other programs, this would be different, but the most important factor is the difference between what the customer pays for power and what NV Energy pays for customer generated power.

For comparison, Sacramento Municipal Utilities District (SMUD) currently charges $18/month as a  flat infrastructure fee, but has calculated it needs to increase that to $28/month to cover the cost of maintaining the grid.  SMUD either pays for net-surplus electricity generated by the customer at SMUD's average cost of generation, which may be below the retail rate, or alternatively SMUD will provide credits at the retail rate.

Future of Utilities: Competition is disrupting the U.K. energy retail market

The U.K. electricity industry has been through privatization and changing regulation. From privatization to consolidation to expansion the market has seen cyclical consolidation and expansion. The structure of the industry that has evolved has become a model for many others including North American regulators and utilities.

There are many companies in the electricity generation sector, from large multinationals to small, family-owned businesses running a single site.  Transmission in the U.K. is operated by three regulated monopolies. Fourteen distribution companies are responsible for the distribution infrastructure.  There are 39 energy suppliers who compete with each other to supply energy to customers.  Full competition was introduced into Britain’s retail energy markets for large customers in 1990, in 1994 for medium sized entities and in 1998 for domestic customers.

At the Future of Canada's Utilities Summit in Toronto, Lawrence Slade, CEO of Energy UK, gave a fascinating overview of the evolution of the U.K. energy retail market from a market that was perceived as broken, noncompetitive and inefficient, to its present disruptive (to incumbents) state with new entrants into the market almost every week.

Energy UK is the trade association for the UK energy industry representing over 80 suppliers and generators of electricity and gas for domestic and business consumers. 

The energy regulator in the U.K. is Ofgem.  In 2002 Ofgem abolished price caps across the market based on the concept that "competition could deliver more benefits for customers than regulation."  But there was a widespread perception that the market was not competitive.  In 2008 Ofgem announces a probe into energy supply markets.  In 2014 Ofgem referred the energy market to the Competition and Markets Authority.

However, in the last few years, the number of customers switching their energy supplier has increased dramatically.  The number of new energy suppliers has gone up dramatically and the public has shown with its feet that it prefers the new entrants to the incumbents.  More than a million customers are leaving the incumbents for the new entrants every year.  The market share the new entrants has achieved is remarkable, 15% in a couple of years and it continues to rise.

There are price comparison web sites.  Collective switching where customers join together to get a better price from a supplier is commonplace.  This together with government ads has achieved a record level of customers switching, 4 million in 2015 and over 1.1 million in the first quarter of 2016.

The biggest hurdle that had to be overcome and continues to be a challenge is engaging with customers.  When the market was first opened up, many customers didn't understand how the market functions.  Many assumed that all energy companies are the same and it wouldn't be worth switching.  The reality is that customers can save hundreds of pounds a year by switching.  An Ofgem survey in 2014 found that the amount of money that the average customer would have to save to encourage them to switch was £94.  It turns out this is just about the amount that customers save per annum by switching.

But it is not just about price. The new entrants have done a better job of engaging with the customer, by providing green energy, better customer service, a free heater or broadband and energy packages.  The incumbents have realized that they are rapidly losing a major part of their customer base and are starting to fight back.

The future

In the future it is expected that customers will be able to switch in 24 hours rather than the current two weeks.  There will be additional trials to try to engage with late adopters, the customers who still have not seen the value of switching in a competitive market.  The rollout of smart meters will make it easier for innovators to use customer power usage patterns to demonstrate the advantage of smart devices, batteries and load shifting.  It is expected that energy suppliers will get more involved in managing devices on the other side of the meter. 

There is the threat of intermediaries coming between the customer and the energy supplier leading to  disconnect of the relationship between a supplier and their customers.  The continued drop in cost and efficiency improvements from solar PV and batteries may lead to customers going off the grid. This creates a regulatory headache of how to recover costs for stranded network assets that may only carry a small proportion of their design capacity.  On the plus side electric vehicles and the possible decarbonization of heat could potentially reverse the demand decline.