Next Monday kicks off the annual Center for Public Utilities’ “Current Issues” conference in Santa Fe, N.M. The conference is an opportunity for those energy and utilities professionals who are engaged in regulatory policies to engage through a series of panel discussions and interactions with industry leaders and Commissioners. I will be in attendance once again and particularly interested to see the extent to which distributed energy resources (DERs) become an unofficial focus of the conference. Along with Senator Jeff Bingaman, former Chairman, Energy & Natural Resources Committee, US Senate and The Honorable Colette Honorable, FERC, speaking Monday morning April 20, the conference will also include the Honorable Lisa Edgar, NARUC President on the program, along with many NARUC Committee members who will also be in attendance.
There are designated topics for discussion, including “the Evolving Distribution System” and the “Regulatory Compact or Tug of War,” in which DERs would be an appropriate focal point. But among a group of state regulatory commissions, I would be surprised if DERs is not top of mind for the group given the policymaking at the state level that continues to gain momentum across the country. The industry news has certainly been flooded with recent state activity in New York, Massachusetts, Colorado, and Minnesota. While certainly different in their approaches and models proposed, it is clear that these states and others are charting the course for necessary DERs policy.
The conference also provides an opportunity for me to introduce a white paper that will be published in the coming week. Several of my WMP colleagues and I have drafted the paper to introduce our perspective on the industry changes that will be necessary to adapt to and drive the DERs market in the coming years. In order for the energy industry to continue to evolve and support this transformation, there are certain action items that are particularly important:
- We need regulatory leadership and flexibility, which include the identification of clear and predictable state regulatory policies that enable development and use of new technologies, and more innovative administrative, fiscal, risk management, and tax policies.
- We need utility leadership and innovation, which include strategic planning, integrated distribution system management, and cost mitigation that will predict and control the impacts on energy delivery associated with investments in DER technologies.
- We need customer-centric regulatory and administrative policies and procedures, which include adding incentives into our regulatory cost-recovery structures that seek to balance the investment risks a utility faces while encouraging innovation.
Moreover, it will be critically important to address how to integrate more distributed energy resources over the coming years, with new rate and utility compensation models that will support that integration. It will be interesting to see how the attendees of next week’s conference are thinking about and planning for the market changes caused by the increase of DERs.