Distributed Energy Resources

Keeping up with distributed energy resources

In the past few years, as distributed energy resources — including energy storage, microgrids, and rooftop solar — have become more prevalent, utilities are seeing an increased impact on load management, electric rates, and customer interaction.

Meanwhile, nearly every state has introduced legislation that may affect the cost and feasibility of implementing DER, particularly policies related to reforming rate design, net metering, and utility ownership of community solar. In particular, many states are considering changes to their net metering policies, and Indiana already passed legislation to reduce net metering compensation rates.

Then there are major state initiatives, such as New York’s Reforming the Energy Initiative, the Minnesota e21 Initiative, the Massachusetts Grid Modernization Plan, and California’s Distribution Resources Plan, which plan for a future grid that incorporates more distributed resources. These state initiatives all discuss the role of the utility in managing the integration of these new resources – from investing in specific infrastructure to shifting toward time-of-use pricing and balancing power supply.

To help utilities keep up with these changes, we compiled a new report, Distributed Energy Resources and Public Power: Considerations for the Community-Owned Utility of the Future, that reviews the latest DER-related technologies, rate design case studies, and state initiatives.

New or rapidly developing technologies utilities may consider incorporating into operations include energy storage, microgrids, electric vehicles, and blockchain. The report helps utilities to consider the cost, benefits and drawbacks, operational considerations, and potential rate design implications for each resource.

Whether a utility chooses to adopt a new technology or not, utility leaders need to be fully informed about their benefits and costs. Distributed energy policies and developments can change rapidly, and there are more changes to come. As developments impact our industry, and shift the vision for the “utility of the future,” we will continue to share how states and utilities form new business models and take new approaches in serving their customers through our Public Power Forward initiative.

As the report notes, the convergence of new and old business models “present an opportunity for public power utilities to develop new revenue streams and better connect to and engage with customers.” While new customer expectations may place demands on public power utilities, utilities will retain most core functions, and expand into services only where there is a clear customer demand.

Read more

Distributed Energy Resources and Public Power: Considerations for the Community-Owned Utility of the Future, is available on our product store. Members of the American Public Power Association can download the report at no cost.

Find more information and reports related to distributed energy resources, and additional resources to prepare your utility for the future on our Public Power Forward page.