The Missouri Public Service Commission recently laid out a path for considering possible changes to how the state handles distributed energy resources, or DERs, such as rooftop solar, energy storage and energy efficiency.
The decision was in response to a report filed by PSC staff in early April that made a series of recommendations related to DERs.
“The commission accepts the recommendations offered by staff and determines that they promote good public policy, and that it would be advisable to further consider the specific merits of each in the appropriate case where the impacted parties will have an opportunity to be heard,” the PSC’s April 18 decision said.
In its report, PSC staff defined DERs as including solar photovoltaic resources, wind, combined-heat-and-power, energy storage, demand response, electric vehicles, microgrids and energy efficiency.
Missouri has about 210 megawatts of DERs, including 186 MW of customer-owned resources, according to the report.
PSC staff called on the state’s regulated utilities to collect DER-related information that could be used during their integrated resource planning processes.
The information includes: aggregate information characterizing the distribution circuits where retail-scale DER are connected; aggregate capacity of retail-scale DER for each feeder or load; and, relevant interconnection standard requirements that specify DER performance.
PSC staff also said the commission should reconsider a 2010 decision temporarily prohibiting the aggregation of demand response retail customers. The commission should consider an approach taken in Indiana that allows customers to subscribe to utility-run demand response programs, the report said. The Indiana utilities bid the demand response resources into the Midcontinent Independent System Operator market.
Missouri has almost no demand response that is registered as a resource with MISO compared with about 600 MW that is registered in Iowa, according to the report.
The PSC should direct Kansas City Power & Light and sister-utility Greater Missouri Operations to propose demand response programs following the Indiana model in pending rate cases, according to PSC staff. Ameren Missouri and Empire District should be encouraged to make similar proposals, staff said.
In looking at possible changes to cogeneration and net-metering rules, the utilities should also be directed to study the effects of raising standard offer contracts for generation at 1 MW, 2.5 MW and 5 MW, according to PSC staff.
Instead of conducting a study looking at the value of DERs, stakeholders should focus their efforts on the resource planning process, which could provide a framework for valuing DERs, PSC staff said.
The PSC should consider rate mechanisms to spur DER adoption, according to PSC staff. “Because appropriate rate structures and rate designs are unique to each utility and that utility’s costs, movement toward specific rate design objectives must occur within that utility’s rate cases,” PSC staff said.
Commission staff proposed several steps that could be taken for DER-related rate mechanisms that would provide incentives to customers and ensure cost recovery for utilities.
Steps to be taken for residential rates include improving customer education, reviewing rates on an unbundled basis, implementing a low-differential time-of-use rate design and studying an on-peak demand charge, according to the staff report.
For non-residential rates, utilities should include an on-peak adder in rates while cutting other energy and demand rates, the report said.
Utilities should also identify locations on their systems where DERs may be an alternative to distribution and transmission infrastructure and develop strategies for strategically deploying DERs, according to staff.
In comments on the staff report, KCP&L and GMO said the Indiana model for aggregating demand response would likely work in Missouri as long as the tariffs aligned with those of the Southwest Power Pool.
The utilities warned that it may be hard to gather the information PSC staff wants them to assemble for their IRP processes. The utilities, for example, don’t know which of their customers have electric vehicles, they said.
Ameren Missouri also raised questions about potentially being required to collect the information. “Maintaining such information (in fact, to maintain it would require creating it) would entail the commitment significant resources and costs,” the utility said.
In its response to the report, the PSC said it intends to seek comments on staff’s recommendations concerning possible changes to the IRP process before beginning a rulemaking process.
On the demand response aggregation and rate design recommendations, the PSC said it plans to ask for more information from stakeholders in pending and future rate cases, and in cases filed under the Missouri Energy Efficiency Investment Act.
