AEE Institute, NECEC Offer Advice on Rhode Island’s Comprehensive Power Sector Transformation
National and regional business groups say R.I. can update the utility business model to integrate more renewable energy, increase system efficiency, and give customers more options to control energy use
Boston, Mass., and Washington, D.C., May 31, 2017 — Today Advanced Energy Economy Institute (AEE Institute) and Northeast Clean Energy Council (NECEC) shared comments they recently filed in support of Rhode Island’s Power Sector Transformation Initiative (PST). As requested by Governor Gina M. Raimondo on March 2, this comprehensive regulatory proceeding to modernize Rhode Island’s electric system is being conducted jointly by the Rhode Island Public Utilities Commission, the Office of Energy Resources, and the Division of Public Utilities and Carriers. AEE Institute and NECEC are partner organizations.
“We applaud the comprehensive, disciplined, and integrated approach Rhode Island is taking to modernize its electric grid and update its utility business model to deliver secure, clean, and affordable energy for customers,” said Lisa Frantzis, senior vice president of 21st century utility system at Advanced Energy Economy, a national business group affiliated with AEE Institute. “This process provides an opportunity for Rhode Island to align the utility business model with the state’s energy goals, remove market barriers so that customers can benefit from advanced energy technologies, and be a role model for the rest of the country.”
“Rhode Island has several advantages that make it an ideal state to lead the nation in modernizing its electric power system,” said Janet Besser, executive vice president of Northeast Clean Energy Council. “With one electric utility serving the vast majority of the state, and strong leadership from the Raimondo Administration to drive innovation in the energy sector, Rhode Island is well-positioned to take lessons learned from other grid modernization efforts, implement changes quickly, and take the vision further.”
In comments filed jointly on utility business models, AEE Institute and NECEC made the following recommendations, among others:
Market Structure and Roles
- The utility should operate the grid as both a physical platform and a market platform, integrating and coordinating assets and services owned and provided by third parties and customers.
- The regulated utility should be limited to owning assets and providing services that are truly monopoly functions.
- Utilities should be increasingly compensated based on their performance, or the outcomes they achieve, rather than the inputs or investments they make to achieve them.
- To align utility incentives and maximize the use of existing utility infrastructure, utilities should be allowed to earn the same return on procured services as on capital investments.
The stated goals of the PST initiative are to integrate renewables, give customers options to control their energy use, and increase system efficiency to control costs. To address these areas, the regulatory proceeding is divided into four work streams examining critical topics, with a series of related technical conferences and comment periods: (1) utility business model (conf. held Apr. 24); (2) distribution system planning; (3) beneficial electrification of transportation and heating; and (4) grid connectivity functionality (conf. held May 9). Upcoming meetings are May 26 on distribution system planning, and May 31 on beneficial electrification of transportation and heating.
After each technical meeting, Rhode Island officials are receiving stakeholder comments to consider for an initial draft proposal will be issued this summer for further comment. In late fall, they will present regulatory proposals, taking input into account. Then, in the first half of 2018, they will finalize proposals through a formal Public Utility Commission process.
- Details on Rhode Island’s Power Sector Transformation (PST) Initiative are here with summary slide deck here.
- AEE Institute, NECEC comments on Utility Business Models are here.
- Video of Apr. 24 technical conference, at which NECEC’s Janet Gail Besser testified, is here: http://www.ustream.tv/channel/WqQyXw296dg.
About Advanced Energy Economy and AEE Institute
The Advanced Energy Economy Institute is a 501(c)(3) charitable organization whose mission is to raise awareness of the public benefits and opportunities of advanced energy. AEE Institute provides critical data to drive the policy discussion on key issues through commissioned research and reports, data aggregation and analytic tools. AEE Institute also provides a forum where leaders can address energy challenges and opportunities facing the United States. AEE Institute is affiliated with Advanced Energy Economy (AEE), a 501(c)(6) business association, whose purpose is to advance and promote the common business interests of its members and the advanced energy industry as a whole. AEE and its State and Regional Partner organizations are active in 27 states across the country, representing more than 1,000 companies and organizations in the advanced energy industry. Visit AEE Institute here and AEE here.
NECEC is the premier voice of businesses building a world-class clean energy hub in the Northeast, helping clean energy companies start, scale and succeed with our unique business, innovation and policy leadership. NECEC includes the Northeast Clean Energy Council (a nonprofit business member organization), and NECEC Institute (a nonprofit focused on industry research, innovation, policy development and communications initiatives). NECEC brings together business leaders and key stakeholders to engage in influential policy discussions and business initiatives while building connections that propel the clean energy industry forward. www.necec.org