When it comes to discussions about things like distributed energy resources, the smart grid and microgrids, cost and equity issues for customers cannot be left by the wayside, said Mike Hyland, the American Public Power Association’s senior vice president of engineering, on Nov. 12, at a gathering of state utility regulators in Baltimore, Md.
“We have to understand that we cannot continue down a path of the reverse Robin Hood,” Hyland said. “You can’t have the poor on the system paying for the rich to have solar panels on their roofs,” he said.
Hyland was one of several participants on a panel, “Believers and Skeptics: A Debate About Distributed Energy Integration on the Distribution Grid,” at the National Association of Regulatory Utility Commissioners’ annual meeting and education conference.
While Hyland was placed into the category of “skeptic” in terms of how the panel was divided up, he made it clear from the outset that he doesn’t consider himself a skeptic. Rather, the Association official said that he is a “realist” when it comes to DERs.
“I don’t believe the glass is half full and I don’t believe it’s half empty,” Hyland told the gathering of state utility regulators. “I’m the engineer who believes the glass is twice the size it needs to be. We need to find the right size of glass – why are you wasting that much room or only filling it up half way?”
He noted that in the public power world, “we do what our customers ask us to do. Plain and simple. They own us. We have no obligation to Wall Street.” If a particular public power utility decides to pursue DERs, “It’s because their customers asked them to do so. But for every one of those utilities, we have a utility that may not be going down that path because their customers didn’t ask them to do so.”
Hyland noted that he just wrapped up a road trip that took him through the Carolinas, Kentucky and Tennessee. “What I found was – and I was trying to explain to my car mates – is cost matters. In some of these communities, you just can’t keep adding costs on to the electric side just because of an emotional vision of what the environment should or shouldn’t be,” he went on to say.
“Costs do matter to some people,” Hyland said. “Every kilowatt hour that does go up, somebody needs to pay that” and in public power communities “we can’t go to investors. We are paying the cost of any increase in our rates.”
He said that there are a lot of consumers that do not want “to be involved in anything beyond turning their lights on and having them come on at a low, reasonable cost. I would say that’s the majority of consumers out there. It’s the mom test. What does your mom want? Your mom wants the lights to come on and she wants them to stay on” and be “environmentally friendly – that’s pretty cool too.”
The Association official also said that “when you look at things like wind and solar, electric vehicles, there is a benefit on the economy of scale.”
Hyland pointed out that public power is “really big” on community solar. “We believe we are uniquely positioned in the municipal world,” adding that existing municipal infrastructure lends itself to solar installations. “What great locations for solar. Matter of fact, in my opinion, they’re no brainers,” he said.
Power quality and resiliency
Hyland also used his remarks to discuss power quality and resiliency issues, starting with microgrids.
“Anytime someone mentions the word microgrid to me, I say, go live on an island for six months and you may change your tune,” he told the audience of state utility regulators.
Noting that the Association has several member utilities that are on islands, Hyland said that if given the choice, those utilities would prefer to be connected to a grid.
“We have 2,008 municipal utilities. We were the original microgrid,” he said. As Sue Kelly, the Association’s CEO has reminded him, “we’ve been there, done that, had the t-shirt, didn’t like it,” Hyland said.
In a 2016 blog, Hyland voiced concern that “there is not enough of a ‘buyer beware’ approach being taken to microgrids, especially those that run on distributed energy resources.”
Meanwhile, Hyland said that “when we look at resiliency of solar panels and wind, I’m all for it, when and where it makes sense.”
But the recent wave of hurricanes that hit the U.S. Virgin Islands and Puerto Rico shows how exposed renewables such as rooftop solar panels can be to extreme weather events, the Association official pointed out.
When discussing resiliency, “there has to be a little bit of maybe old lineman thinking about how we can get out there, how we can keep it there, how we can restore it, how we can use it the right way,” he went on to say.
Hyland noted that after Superstorm Sandy, “everybody talked about solar being the answer. After Sandy, most of the solar panels would probably be ripped off your roof if it” was a Category 5 hurricane. “Luckily, Sandy wasn’t a Cat 5,” he said.
With respect to safety topics, Hyland noted that there is a “huge debate” going on between the National Electrical Safety Code and the National Electrical Code.
“I used to always remind people – what is the first thing that linemen used to do when they went into a restoration effort? They’d turn off their engines” and try to determine where the backfeed is coming from.
“The key with solar and electric vehicles is they have no sound,” Hyland pointed out. Backfeeding, therefore, is a big issue.
“We also have the issue of do we install it through one code or the other?” he said. This is an issue that Hyland has raised in front of state utility regulators in the past.
“Who’s in charge of those codes in your state?” Hyland asked in his Nov. 12 appearance before NARUC. “The legislatures have to get involved at the NARUC level. They have to ensure that the right code is being used. We’re talking about rooftop solar? We definitely want the NEC. You’re talking a 550 megawatt, eight million panel system? You want the NESC. And we can’t confuse the two, especially if we go down the path of microgrids, or at least fractaling, which is microgrids that can come in and come back out.”
“Four horsemen of the skepticism”
Another panelist, Bob Schulte, a consultant and former utility executive, framed his presentation at the session by referring to the “Four Horsemen of the Skepticism,” which are “over-hype, economics, hyper-complexity and intrinsic indifference,” he said.
He noted that he is not “a skeptic on everything” when it comes to things like electric vehicles and solar energy.
With respect to over-hype, Schulte said that “usually, the term smart grid is used to make us feel guilty about the electric grid, make us feel it’s dumb, when it really isn’t.”
So what’s going on? “Well, someone’s trying to make us feel guilty about what we’re doing because they’re trying to sell us something,” Schulte argued.
Meanwhile, beyond the term smart grid, there has been an explosion of new terminology in the power sector. “If all these terms sound complicated and make you feel dumb, it’s because they’re supposed to,” Schulte said. “They’re trying to kick you out of your quiet life and do something else and that is buy their product or service.”
Schulte also wonders whether customers will ultimately want the products that are being discussed these days in the context of DERs.
“That is a significant risk,” he said, adding that intrinsic indifference “can metastasize into something much more virulent and I call that malignant indifference,” he said.
Another panelist, Chris Villareal, an energy consultant, acknowledged that there are cost concerns, as well as whether “people will do any of this.”
But on the other hand, some consumers have already dived into the DER fray, he said. “People will find the value in something that’s important to them. We’ve all decided to buy our own phones because there’s value to them,” he noted.
Villareal said that energy efficiency stands out as a successful DER example. He said that energy efficiency has offered a success story for decades. “That is a DER that has resulted in a tremendous amount of savings to the consumer, which is not only individual but societal,” he said.
“Consumers are going to increasingly invest in things that make sense to them. Nobody’s asking them to buy this, they are buying it themselves,” Villareal said.
At a later point, he argued that consumers “are more than happy to start bearing some amount of risk on their investments that not only will provide them an immediate benefit, but if priced and valued appropriately will provide a societal benefit.”
He said, “why should we continue to allow the utilities to burden the rate base with these risks around large investments on transmission or generation or other infrastructure, when the consumers in the market are more than happy to bear the risk themselves.”
John Farber, a former staff member with the Delaware Public Service Commission, said that an overarching public policy decision needs to be made “as to whether to treat these decentralized resources as threats or opportunities.”
Farber said that once that decision is made, “then all of the practical applications of treating these resources as threats or opportunity can follow through.”