Why the power grid of the future is in California and New York

Why the power grid of the future is in California and New York

In The Tipping Point Malcolm Gladwell popularized the processfirst described by Everett Rogersby which innovative ideas, policies, and products start with a small but influential minority of early adopters and then spread rapidly to a much wider segment of the market. The planning and design of the electric grid could be at just such a tipping point, with New York and California leading the chargeon how to integrate significantly higher amounts of distributed energy resources (DERs) onto a grid historically built around centralized assets like large power plants.

While New York and California have different existing levels of DER adoption, electricity policy objectives, history, and market structures, the two initiatives share common drivers. Both states recognize the importance of fundamental changes to the regulated investor-owned utility business model and distribution planning process. Both processes are designed to position the electric system to succeed in an environment of changing technology costs and capabilities, improve system resilience and customer opportunities, and address the electric systems impact on climate.

NY and CAS initiatives at a glance

In April 2014, the New York Public Service Commission launched the Reforming the Energy Vision (REV) proceeding. The ambitious initiative is the first in the nation to propose an entity to perform the role of a distributed system platform (DSP) provider. The DSP model gives life to a new market for distributed resources to provide energy services, similar to a distribution-level independent system operator (ISO) but focused on DERs rather than central grid assets.

The DSP in NY will interface between the bulk power system, utilities, DER providers, and retail customers. While much is yet to be decided, the REV proceeding envisions DSPs as platforms for innovation and market-based deployment of DERs.

California launched a rulemaking proceeding in July 2014 pursuant to Assembly Bill 327, which requires the states investor-owned utilities to develop distribution resources plans (DRPs) to better integrate DERs onto the grid. California is the national leader in installed capacity of solar PV, and therefore faces unique challenges related to an existing, scaled deployment of DERs that has not yet materialized in New York.  Moreover, due to the California statutory requirement to focus on DRPs, the process is focused on technical matters related to DER integration, and does not explicitly explore how utility business models may need to change to better integrate DERs. The California initiative does not create a new distributed resource market like the one envisioned in NY. However, like NY, the California process intends to mov(e) the IOUs towards a more full integration of DERs into their distribution system planning, operations and investment.

Source: The Christian Science Monitor

SMART GRID Bulletin March 2017

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