Critics say the plans lack spending accountability and advanced technologies to support distributed generation.
Michigan’s two largest utilities plan to spend $7.2 billion over the next five years to improve electric reliability while preparing for more electric vehicles and distributed generation.
Clean energy groups, however, have raised concerns about the cost-effectiveness of the proposed plans and the extent to which DTE Energy and Consumers Energy are truly preparing a grid of the future instead of just updating old equipment.
“For quite a while the commission and the utilities have paid relatively little attention to distribution investments,” said Douglas Jester, partner at 5 Lakes Energy, a Lansing-based clean energy consulting firm.
The Michigan Public Service Commission required five-year grid modernization plans from Consumers and DTE based on the companies’ anticipated spending on increasingly out-of-date distribution assets. While upgrading equipment and tree-trimming are among the utilities’ top priorities, regulators also want to see a roadmap that accounts for more advanced grid interaction.
“We’re going to need a significant rebuild of the existing electric distribution system,” Michigan Public Service Commissioner Norm Saari said at a conference in Grand Rapids last month. “We’re talking about a significant financial resource that comes from only one place: customers’ bills.”
Until now, most distribution investments have been reactionary, like adding substations to meet new loads. The growth of electric vehicles and distributed generation are forcing utilities to be more proactive. Utilities are also looking more to distribution projects as a revenue source since demand for generation has flattened in much of the country due to increased energy efficiency.
“Particularly with distributed generation, it’s definitely at the forefront of our thinking about what we have to do in the future,” said Tim Sparks, Consumers’ vice president of electric grid integration.
In its 20-year integrated resource plan, Consumers is calling for at least 5,000 megawatts of new solar throughout its distribution system.
“We have to get that distribution in place where it can accept that resource,” such as allowing for two-way power flows, Sparks said. “The infrastructure and technology it takes to do that is certainly top of mind. We have got to change how the system operates.”
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