Increasing penetration of renewables and the associated overproduction risk will require innovation in traditional solar power purchase agreement (PPA) structures. In January 2017, the Solar Electric Power Association and ScottMadden released a report analyzing potential alternative approaches to curtailment for PPA structures in Hawaii.
On March 9, 2017, in the final open session with chair Audrey Zibelman at the helm, the New York Public Service Commission (PSC) issued an Order regarding the utilities’ Distribution System Implementation Plans (DSIP). The DSIPs are the plans through which each utility will establish a Distributed System Platform (DSP) to more effectively integrate Distributed Energy Resources (DER), a foundational element of New York’s Reforming the Energy Vision (REV).
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Partially driven by securitization and strong investor appetite, property assessed clean energy (PACE) loans are forecasted to double over the next year and potentially become the fastest growing method of financing in the United States. However, as these loans have ballooned they have come under criticism by consumer and real-estate industry groups.
On February 13, 2017, the Southwest Power Pool (SPP) became the first regional transmission organization (RTO) in North America to serve more than half of its load from wind energy.
Due to new economic and political priorities, increasing interest and investment in renewable energy, growth in distributed energy, and cheap natural gas, power systems are being forced to adapt. Reduction in the share of electricity generated by coal is occurring and it is expected to continue. How can baseload coal plants thrive when they are not always in the money?
In December 2016, Illinois passed the Future Energy Jobs Bill (SB 2814) that covers many sectors of the power industry and establishes a zero emissions credit (ZEC) that will help nuclear plants. There are also several other aspects of the bill that will impact the Illinois utilities, including new incentives for energy efficiency and renewables development. These elements of the bill are forecasted to increase intermittent generation from renewables, add more distributed generation, and increase energy efficiency through targeted spending programs.
Several weeks into the new administration, Trump’s energy policies, including those expressed in the “An America First Energy Plan,” are showing favor to the use of fossil fuels, indicating the potential for a rebound in coal use within the energy sector. While many in the coal industry have expressed a promising future, analysts have questioned whether the changes in direction from the Obama administration, including the repeal of the Clean Power Plan and other regulations, will result in any sustainable gains for coal.
Earlier this month, the Illinois Commerce Commission (ICC) approved a proposal from Commonwealth Edison (ComEd) that will allow the utility to share anonymous customer energy usage data it collects through its installed smart meters. ComEd will be one of the first utilities in the country given the authority to make its usage data available to researchers, energy management specialists, and other companies in the energy space to enable them to develop new products and services to benefit ComEd customers. According to Val Jensen, Senior Vice President of Customer Operations at ComEd, “One of the great benefits of smart meter technology is the availability of data that will enable a growing sector of energy tech companies to design new products and pricing programs that will help customers save money and meet the growing interest for more choice and personalized services.”
In January 2017, California’s investor-owned utilities filed proposals with the California Public Utilities Commission (CPUC) to spend a combined $1.07 billion over the next five years to accelerate adoption of electric transportation.
Kauai Island Utility Cooperative (KIUC) recently signed a power purchase agreement (PPA) with AES Distributed Energy to purchase energy from a solar-plus-storage facility consisting of 28 MW solar capacity coupled with a 20 MW five-hour duration energy storage system.
Within two weeks of the termination of its proposed merger with Hawaiian Electric Industries (HEI), NextEra announced a separate deal to purchase the regulated T&D wires company Oncor Electric Delivery Co. LLC (Oncor) from the bankrupt Energy Future Holdings (EFH). The two deals, each representing $4.3 billion and $18.7 billion in total transaction value respectively, provide a stark contrast in M&A transactions in a very brief period of time. Though the HEI transaction ultimately fell apart, the EFH transaction is on track to achieve the required regulatory approvals, clearing the way for the deal to close in the first half of 2017.
Cloud computing’s myriad advantages, including reduced costs, more frequent updates, and greater flexibility/mobility, are part of the reason why Software as a Service (SaaS) solutions are experiencing rapid growth in many industries. However, for most regulated utilities, the current regulatory/accounting treatment of investments in cloud-based computing solutions discourages their deployment. Unlike in-house software solutions that are typically classified as capital investments and eligible for inclusion in rate base, cloud-based computing is typically considered an operating expense. Given the disparate accounting treatment, there is an incentive for a utility to select an in-house software solution that may be more costly and less beneficial for the customer, simply because it can be included in rate base.
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