Category Archives: Ratemaking

Utilities Risk Losing
 Commercial Customers
 Without New Approach

Distributed Generation, Ratemaking, Solar, Utilities,

The U.S. commercial sector spent just under $146 billion on electricity in 20141, and that has prompted business leaders across the country to sit up and take notice.

In a fascinating study released late last month, Deloitte’s Center for Energy Solutions reported that 79 percent of the businesses it surveyed viewed cutting their electricity expenditures as “essential to creating and maintaining competitive advantage.” To this end, the survey (which is available here) found that 57 percent of the businesses surveyed have formal energy reduction goals—up significantly from the 46 percent that said they had such goals the year before.

This transition is occurring even though electricity prices are relatively low currently, and businesses do not expect substantial increases in the near term. In other words, energy management is quickly moving from the realm of reactive cost cutting to active planning and forward thinking: what can we do as a business to curb our energy consumption and improve our competitiveness?

The answers to that question may surprise you. Conventional measures such as sensors to raise/lower heating and cooling controls are still the go-to choice. But increasingly, Deloitte said, businesses are forging a path of their own, pushing ahead with options such as in-house batteries and onsite generation. Specifically, 39 percent reported installing some form of onsite generation (solar panels or other options) during the year, up from 31 percent in the previous year. Similarly, 26 percent said they installed batteries during the year compared to just 15 percent in 2014. In addition, 34 percent reported installing recovery equipment to capture previously lost energy used in production and other processes.

Deloitte

The moral of the story? Companies are increasingly concerned about their energy costs and looking for ways, both conventional and not so, to reduce their usage and boost their competitiveness. The question is, who is going to step up supply those needs?

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 Commercial Customers
 Without New Approach →

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Xcel’s Can-Do Attitude
 A Refreshing Approach
 In Utility Industry

Environment, Ratemaking, Utilities, ,

 

Attitude is everything. In business, when confronted with a new proposal, you essentially have two options, look at the issue and say—`No, we can’t do that, because….’—or—`That’s an interesting idea, let’s take a look.’ In the utility industry, far too often and for far too long, the prevailing attitude has been to just say no. However, if the industry is to survive in something like its current form, that attitude simply has to change—every new idea isn’t by default a good idea, but dismissing all new ideas out of hand is a recipe for disaster.

One utility that has gotten this message is Xcel Energy, the Minneapolis-based company that serves 3.5 million electric customers through four operating companies in eight states, including Minnesota. Long a proponent of renewable energy—Frank Prager, then the company’s vice president of environmental affairs told me in an interview in 2007 that the company’s wind resources were “a beautiful thing”—the company last month outlined a progressive approach to dealing with changing customer expectations, new technologies and tightening environmental standards in a filing with the Minnesota Public Utilities Commission. The filing—titled Upper Midwest Resource Plan, 2016-2030—should be required reading for executives across the industry (a copy can be found here).

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 A Refreshing Approach
 In Utility Industry →

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Time For Utilities
 To Rethink
 Ratemaking Process

Distributed Generation, Ratemaking, Utilities, ,

The utility industry has launched what amounts to an all-out attack on net energy metering, under which customers receive credit for power they generate on-site and feed back into their utility’s distribution system.

In a report issued earlier this month, the Edison Foundation’s Institute for Electric Innovation (offshoots of EEI, the industry trade association) took aim at the net energy metering program in California, where roughly 120,000 customers (both residential and non-residential) are enrolled in the state’s NEM tariff, and found it, shall we say, lacking.

“The legitimate purpose of a subsidy is to provide an incentive to pursue a desirable public policy. Subsidies should not be overly generous; the amount of the subsidy should be transparent; and the recipient of the subsidy should be clearly identified. As our analysis demonstrates, the current NEM regulatory approach in California fails all three tests,” IEI concluded. The report, Net Energy Metering: Subsidy Issues and Regulatory Solutions, can be found here.

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 To Rethink
 Ratemaking Process →

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