Category Archives: Ratemaking

U.S. Battery Storage Nears Tipping Point, Drives Energy Transition

Distributed Generation, Ratemaking, Solar, Utilities, , , , ,

Merriam Webster defines tipping point as “the critical point…beyond which a significant and often unstoppable effect or change takes places.”

While by definition it is impossible to identify a tipping point as it is happening, developments over the past several weeks certainly seem to be pushing the electric power storage industry to or past that landmark. In a couple of years, the last couple of weeks may stand out as the point when storage morphed from being an interesting add-on to an essential piece of the grid, providing backup power, smoothing variable generation and participating in various other ancillary markets.

This transition is projected in the latest forecast from the Energy Storage Association and GTM Research. In their Q1 review (executive summary is available here), they project that annual storage installations in the United States will jump from just 215 megawatts in 2017 to more than 3.3 gigawatts by 2023. Just as telling, AES, which has partnered with Siemens in a storage joint venture dubbed Fluence, said in a presentation (available here) accompanying its annual results that it expected the global market to hit 28 GW of installed capacity by 2022—a tenfold increase in five years.

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Storage Puts Utilities
 In A Big Bind
 On Demand Charges

Distributed Generation, Forecasts, Ratemaking, Solar, Utilities, , , ,

Electric utility executives already fretting about slow/no growth in their service territories have another item to add to their growing list of worries: the prospect that many of their commercial customers could begin installing behind-the-meter storage to lower their demand charges.

A recent white paper from DOE’s National Renewable Energy Laboratory and the Clean Energy Group, a nonprofit advocacy organization, shows that it could be economic for almost 28 percent of commercial customers across the country to install batteries at their business sites to cut their electricity consumption during specific periods of the day, thereby reducing their exposure to utility-imposed demand charges. This would amount to a one-two punch for utilities: electricity sales would drop if the batteries were linked with solar and the amount of revenue collected from these charges would fall, not a pretty picture for the utility industry.

Continue reading Storage Puts Utilities
 In A Big Bind
 On Demand Charges →

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Do You Hear That?
 It’s The Fat Lady Singing;
 Nuclear Revival Ends
 Almost Before It Starts

Nuclear, Ratemaking, Utilities, , , ,

Five years ago almost to the day (Feb. 9, 2012, actually), the Nuclear Regulatory Commission voted 4-1 to issue a construction and operating license to Southern Company for the 2,234 megawatt Vogtle 3&4 project—the first of the new generation of reactors that was touted as the beginning of the industry’s long climb back from 30 years of dormancy.

At the time, Marvin Fertel, then president and CEO of the Nuclear Energy Institute, the industry’s trade association, sounded almost euphoric: “This is a historic day. [The NRC decision] sounds a clarion call to the world that the United States recognizes the importance of expanding nuclear energy….” Fertel’s optimism was hardly unique: A year earlier, Jim Miller, CEO of Southern Nuclear, the company’s operating subsidiary, told Scientific American: “The nuclear revival is under way in Georgia.”

My, how much has changed in just five years. Today, we are waiting for the other shoe to drop in the Westinghouse-Toshiba fiasco, which is expected later this month. When that happens it will serve as the end point of the revival that never really took place—five years from start to finish, not quite the long-running blockbuster the industry had hoped for.

Continue reading Do You Hear That?
 It’s The Fat Lady Singing;
 Nuclear Revival Ends
 Almost Before It Starts →

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Dominion, SCE
 A Continent Apart
 On Distributed Energy

Distributed Generation, Forecasts, Ratemaking, Solar, Utilities, Wind, , , ,

Dominion’s 2016 integrated resource plan is on the docket at Virginia’s State Corporation Commission this week: The hearings would be a perfect time to explore the utility’s plan for addressing the massive changes sweeping across the electricity industry, but it’s not going to happen. Instead, Dominion will defend a document seemingly developed in a time warp, when there were no options other than central station, utility-generated power and the term distributed energy resources was still a twinkle in Amory Lovins’ eye.

Here’s all you really need to know: In the Richmond, Va.-based company’s 307-page IRP (which can be found here), the term distributed energy resources only shows up once, on page 112, when the company references the federal Department of Energy’s definition of a microgrid: “…a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid…”

Now, to be fair to Dominion, the utility does talk about distributed generation, but generally in terms designed to underscore its potential risks while downplaying any possible benefits. Its discussion of future energy resources, for example, which begins on page 88, includes a number of standard beefs about renewable resources—they aren’t dispatchable, they are intermittent and they add uncertainty to system operations. The topper, though, appears on pages 95-96 when the company talks about distributed photovoltaics: “While the grid may not be adversely impacted by the small degree of variability resulting from a few distributed PV systems, larger levels of penetration across the network or high concentrations of PV in a small geographic area may make it difficult to maintain frequency and voltage within acceptable bands. On a multi-state level, it is possible that the resulting sudden power loss from disconnection of distributed PV generation could be sufficient to destabilize the system frequency of the entire Eastern Interconnection.” [Emphasis added]

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 A Continent Apart
 On Distributed Energy →

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Time For A Reality Check:
 More Delays Are Coming
 For Georgia Power’s
 New Vogtle Reactors

Nuclear, Ratemaking, Utilities, , ,

Georgia Power executives certainly won’t say it and Georgia’s utility regulators certainly won’t acknowledge it, but the reality is there are going to be additional delays at Vogtle 3&4—the already delayed and over budget new nuclear project being built by Westinghouse for the Southern Company subsidiary and a consortium of Georgia municipal utilities south of Augusta.

In a process that resembles a Kabuki dance, every six months Georgia Power is required to file a construction monitoring report with the Georgia Public Service Commission detailing its progress and justifying its expenditures in the last reporting period. (Georgia Power filed its 14th such report, covering the six months from June-December of 2015, in February 2016; it is now pending before the PSC.) Intervenors get to comment during this process, but once that is done, like clockwork, the commission signs off on the report, the utility gets to charge ratepayers for the approved expenses and the whole process starts anew. However, when you look closely it is clear that all is not well with the long-running Vogtle production.

In particular, it is worth taking a long look at the testimony presented by Dr. William Jacobs and Steven Roetger, who represent the Georgia PSC’s public interest advocacy staff in overseeing construction activities at Vogtle. Jacobs is the project’s independent construction monitor and has raised questions about the plant’s construction schedule virtually since the first dirt was turned (see this story). Roetger is the leader of the staff’s oversight team and has been involved with the project since the beginning. We will get into the details of their testimony below, but their conclusion is striking:

“We conclude that the company has not demonstrated to staff that the current CODs [commercial operation dates] have a reasonable chance of being met.  It is our opinion that there exists a strong likelihood of further delayed operation dates for both units.”

Continue reading Time For A Reality Check:
 More Delays Are Coming
 For Georgia Power’s
 New Vogtle Reactors →

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