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Greentech Media: Top 10 Utility Regulation Trends of 2019

Posted by Coley Girouard on Dec 26, 2019

Greentech Media published an abridged version of AEE's Coley Girouard's annual Top 10 Utility Regulation Trends of 2019 blog post. Read excerpts below and the entire GTM piece here.

From the realignment of utilities’ performance incentives to the ongoing rise of DERs, regulators had their work cut out for them this year. In August, we published the top 10 utility regulation trends of 2019 — so far. With 2019 wrapping up, we look at the 10 trends and actions that stand out above the rest. From the falling cost of renewables and storage driving utilities' resource planning, to the realignment of utility performance incentives with evolving policy goals, it was a busy year. Below is an executive summary of the complete roundup, which has specific examples of state public utility commission action. (You can read AEE's full version with details and links to proceedings here.)

1. Implementing 100% clean energy commitments

As renewable energy and energy storage resources become increasingly cost-competitive, states have become more ambitious in their clean energy targets. At least 13 states plus Puerto Rico and Washington, D.C. have now set 100 percent clean energy targets. Washington, D.C. codified the most aggressive target, setting 2032 as the deadline for powering its grid with 100 percent renewable energy. A few others, including Illinois, Maryland, Michigan and Oregon, have announced initial plans to transition to 100 percent clean energy... 

2. Falling cost of renewables and storage drives resource plans

In most states, it is now often cheaper to build new wind and solar plants (in some cases even when paired with storage) than to operate existing fossil-fuel power plants. The data bears this out. The average levelized cost of energy for large-scale solar PV and onshore wind without subsidies is now as low as $32 and $28 per megawatt-hour, respectively. This compares favorably to the marginal cost of operating existing coal plants — now at about $33 per megawatt-hour. Falling costs have led to an estimated $2.6 trillion in new investments in clean energy, as defined by Bloomberg New Energy Finance, in the past decade. Renewables are now dominating utility long-term planning, as we saw this year in Colorado, Georgia, Indiana, Michigan, Mississippi, New Mexico and Utah...

3. Aligning utility performance with policy goals

Traditional cost-of-service regulation favors utility capital investment in long-lived assets rather than rewarding utilities for performance against desired policy objectives. But as utilities grapple with a changing energy landscape, many state public utility commissions have started to look at performance metrics and incentives to spur utility innovation in meeting policy goals. A range of proceedings this year tackled setting metrics, mechanisms, and other guidance in Colorado, Hawaii, Minnesota, and Pennsylvania...

4. Utilities planning for electric transportation

Electric vehicle charging infrastructure and EV integration have continued to dominate conversations before state public utility commissions as improvements in technology and model offerings have dramatically expanded the market...

Read the entire GTM piece here.

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