DOCSLIB.ORG

Modernizing the Electric Distribution Utility to Support the Clean Energy Economy

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Modernizing the Electric Distribution Utility to Support the Clean Energy Economy Modernizing the Electric Distribution Utility to Support the Clean Energy Economy Carl Pechman, Ph.D. August 25, 2016 i [THIS PAGE INTENTIONALLY LEFT BLANK ] ii Acknowledgments The author wishes to acknowledge Dr. Bernie Neenan at the Electric Power Research Institute; Dr. Peter Fox-Penner and Frank Graves of the Brattle Group; Professor Donna Attanasio of The George Washington University Law School; Clint Vince and Emma Hand at Dentons; David Owens at the Edison Electric Institute; Ralph Cavanagh at the NRDC Council; Charles Zielinski at Bryan Cave; Professor William Kovarik of Radford University; Charles Goldman, Peter Capers, and Andrew Satchwell of Lawrence Berkeley National Laboratory; Andrew Nicholls, Dr. Jeffrey Taft, and Heather Culley of Pacific Northwest National Laboratory; David Jermain of DOJ Consulting; Dr. Levi Tillemann at the New America Foundation; Peggy Welsh; Marianne Smith; and Jeanette Pablo, Larry Mansueti, Dr. Jonathan Pershing, Roland Risser, Dr. Karen Wayland, Joe Hagerman, Dr. Henry Kelley, Greg Gershuny, Ben Steinberg, Alex Breckel, Eric Hsieh, Joe Paladino, Heidi VanGenderen, Skila Harris, and Gil Bindewald at the U.S. Department of Energy (DOE). All shared their insights, reviewed drafts and provided helpful comments and criticism. Many thanks to Dr. Kathleen Ratcliff for her invaluable research support. Last but not least, a very special thanks to Secretary Ernest Moniz and Melanie Kenderdine, who gave me the opportunity to work with a great team to craft the first Quadrennial Energy Review. It was an honor to be part of the team, and this report is a background paper produced as part of that process. I would also like to acknowledge the Federal Energy Regulatory Commission, my host agency, which provided me the opportunity to work with DOE on detail. The comments and observations within this document are solely my own and do not represent the views of the USDOE, the FERC, individual FERC Commissioners, or the U.S. Government. iii Disclaimer This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference therein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views of the authors do not necessarily reflect those of the United States Government or any agency thereof. iv Table of Contents Acknowledgments .............................................................................................................................. iii Disclaimer........................................................................................................................................... iv Table of Contents ................................................................................................................................ v Table of Figures ................................................................................................................................ viii Table of Tables ................................................................................................................................. viii List of Acronyms ................................................................................................................................. ix Abstract ............................................................................................................................................... x Key Findings and Insights ................................................................................................................... xi Policy Implications and Options ........................................................................................................ xii Executive Summary .......................................................................................................................... xiii Chapter Summaries .......................................................................................................................... xiv 1.0 Introduction ................................................................................................................................ 1 1.1 The Current Situation—A Strategic Inflection Point .......................................................... 2 1.2 Overview ............................................................................................................................ 3 2.0 Defining a Utility, What It Does, and Its Structure ..................................................................... 6 2.1 Edison’s Central Station Generation Concept .................................................................... 6 2.2 Defining Utilities ................................................................................................................. 6 2.3 Ownership Taxonomy ........................................................................................................ 7 2.4 Interplay of Economies of Scale and Utility Taxonomy .................................................... 10 2.5 Federal/State Jurisdiction and the Regulation of Utilities ............................................... 12 3.0 The Benefits that Utilities Enable ............................................................................................. 15 3.1 Benefits of Diversity of Demand ...................................................................................... 15 3.2 The Value of Interconnection ........................................................................................... 15 3.3 The Continuing Importance of Utilities ............................................................................ 18 The Prospect of Electric Utility Obsolescence: The Death Spiral in the Context of Distributed Energy Resources ............................................................................... 18 Reports of the Death Spiral Are Premature .......................................................... 19 Lessons from Obsolescence in Other Industries ................................................... 21 v 4.0 Economic Regulation of Utilities ............................................................................................... 23 4.1 The Right Costs for Rate Design—A Balancing Act ........................................................... 24 4.2 Incentive Impacts of Regulation ....................................................................................... 27 5.0 Disruptive Technologies and Innovation Supported by Regulatory Mechanisms .................... 29 5.1 Development of Disruptive Technologies ........................................................................ 29 5.2 Energy Efficiency .............................................................................................................. 30 Development of Energy Efficiency ........................................................................ 30 Implementing Utility Energy Efficiency ................................................................. 31 5.3 The Resurgence of Non-Utility Generation ...................................................................... 33 PURPA as a Transformative Policy ........................................................................ 33 5.4 Distributed Energy Resources .......................................................................................... 35 Distributed Energy Resources as a Disruptive Technology ................................... 35 Net Metering as a Transformative Policy .............................................................. 35 5.5 Getting the Price Right ..................................................................................................... 37 Where Price is Determined ................................................................................... 37 The Importance of Product Specification .............................................................. 39 It’s Time to Re-Evaluate Costs and Rates .............................................................. 41 6.0 The Scope of Distribution Utilities ............................................................................................ 43 6.1 Limitations on the Scope of Utility Activities ................................................................... 43 6.2 PUHCA and Industry Restructuring .................................................................................. 43 Restrictions on Utility Scope in Industry Restructuring ........................................ 45 6.3 Energy Efficiency, Distributed Energy Resources, and the Scope of Distribution Utility Business Models ............................................................................................................... 47 Models for Provision of Energy Efficiency and Demand-Side Services ................. 47 Models for Integrating Distributed Energy Resources into the Grid .................... 49 6.4 When Limitation of Scope Is Warranted .......................................................................... 51 7.0 The Path Forward ....................................................................................................................
Load more

Recommended publications
  • Vanishing Power Lines and Emerging Distributed Generation
    5-WARREN FINAL.DOCX (DO NOT DELETE) 5/15/2014 2:53 PM VANISHING POWER LINES AND EMERGING DISTRIBUTED GENERATION GINA S. WARREN† I. INTRODUCTION “Right now, I’d put my money on distributed resources.”1 xperts predict that distributed energy will contribute as much Eas twenty percent of the U.S. power supply by 2020.2 While no one will wake up tomorrow morning to an entirely new energy distribution system—complete with solar panels on the roof and a wind turbine in the back yard—distributed generation is receiving significant attention as the disruptive technology that will ultimately revolutionize the way energy is delivered in the United States. The reason for this shift is, in part, due to new technology that allows for more flexible localized generation of energy, and in part due to a changing climate resulting in frequent and violent storms that destroy large-scale energy infrastructure. A variety of distributed energy technologies are available today, including solar photovoltaic panels, battery storage, and micro turbines. These innovative technologies are not only appealing to today’s tech-savvy customers, they are also becoming more economically accessible to the average customer. This shift in customer behavior will directly threaten the current energy delivery model. The more customers utilize distributed generation † Gina S. Warren is an associate professor at Texas A&M University School of Law. Thank you Professors K.K. DuVivier and Joshua Fershee for your thorough and thoughtful comments and helpful guidance on this article (though any mistakes or overstatements are solely my own). Thank you Catherine Griffith, my brilliant research assistant, for all of your research and hard work on this project.
    [Show full text]
  • The Electrocom
    2013-14 Published Month/Year - March’14 Update yourself with the latest technology, construct some circuits, try some brain teasers,& check your knowledge with… THE ELECTROCOM An Initiative by SOCIETY OF ELECTRONICS ENGINEERS(SEE-MIET) Department of Electronics and communication Engg. Meerut Institute of Engineering and Technology, Meerut Contents EDITOR’S CUT TECH NEWS The ELECTROCOM is a platform for the students who want to enter the vast world of electronics. It helps you to acquire the knowledge and to ROCHAK TATHYA develop innovative thoughts and motivate you for the perseverance. We just want to give you the path to explore the electronic boom. Soon we BRAIN TEASERS are going to organize a national level quiz competition. We are also going to provide you with test series for GATE, notes of the required subject, help against the queries and blog for CONSTRUCTION the details of electronics. You can visit electrocom.see on Google to download the material required. This issue is primarily focusing on the WORDS OF WORTH new era of technology in the field of electronics, circuit analysis, E- crossword and live project with revolutionary ideas which can be implemented in the institute. We are EXPRESSIONS looking forward to hear from you in the form of your articles, suggestions, ideas and queries to make our endeavour better in every form. Editorial Team 2 How Water Could Help Make Better Batteries Water could be the key to producing a cheaper, more environmentally friendly and less dangerous way of making the lithium-ion batteries that power so many everyday gadgets, researchers say.
    [Show full text]
  • DC Power Production, Delivery and Utilization
    DDCC PPowerower PProduction,roduction, DDeliveryelivery aandnd UUtilizationtilization An EPRI White Paper June 2006 AAnn EEPRIPRI WWhitehite PPaperaper DC Power Production, Delivery and Utilization This paper was prepared by Karen George of EPRI Solutions, Inc., based on technical material from: Arshad Mansoor, Vice President, EPRI Solutions Clark Gellings, Vice President—Innovation, EPRI Dan Rastler, Tech Leader, Distributed Resources, EPRI Don Von Dollen, Program Director, IntelliGrid, EPRI AAcknowledgementscknowledgements We would like to thank reviewers and contributors: Phil Barker, Principal Engineer, Nova Energy Specialists David Geary, Vice President, of Engineering, Baldwin Technologies, Inc. Haresh Kamath, EPRI Solutions Tom Key, Principal Technical Manager, EPRI Annabelle Pratt, Power Architect, Intel Corporation Mark Robinson, Vice President, Nextek Power Copyright ©2006 Electric Power Research Institute (EPRI), Palo Alto, CA USA June 2006 Page 2 AAnn EEPRIPRI WWhitehite PPaperaper DC Power Production, Delivery and Utilization Edison Redux: The New AC/DC Debate Thomas Edison’s nineteenth-century electric distribution sys- Several converging factors have spurred the recent interest in tem relied on direct current (DC) power generation, delivery, DC power delivery. One of the most important is that an in- and use. This pioneering system, however, turned out to be im- creasing number of microprocessor-based electronic devices practical and uneconomical, largely because in the 19th cen- use DC power internally, converted inside the device from tury, DC power generation was limited to a relatively low volt- standard AC supply. Another factor is that new distributed re- age potential and DC power could not be transmitted beyond sources such as solar photovoltaic (PV) arrays and fuel cells a mile.
    [Show full text]
  • Pennsylvania Coal Fired Power Museum
    Pennsylvania Electric Company Front Street Generating Station Erie, PA Rich Hall Western Mining Electrical Association (WMEA) May 28, 2015 Erie Maritime Museum The museum tells the story of the fleet of ships built in Erie that defeated the British during the “Battle of Lake Erie” in the War of 1812; about a time when Erie was the largest fresh water fishing port in the world; about the USS Michigan (later USS Wolverine), the first iron hulled ship and longest serving powered ship in the US Navy that served out of Erie; and about the many shipwrecks off Erie, etc. The US Niagara, a working replica of the vessel built in Erie in 1812 - 1813 Photo by John Baker Erie Maritime Museum But the museum has other stories to tell, related to the coal mining industry. Erie Maritime Museum The building that houses the museum was formerly the generator building of the Pennsylvania Electric Company Front Street Generating Station, a coal-fired steam power plant. Coal-fired power plants are the main customers of the coal mining industry, of course. The museum contains some vintage equipment, including a steam turbine generator set (Unit #3) of 1926 vintage. This plant was in operation from 1917 until the plant closed in 1991. Penelec Front Street Generating Station Source: Erie Maritime Museum Web Site Conveyor to Smoke Stack Pulverizer and Boilers Boiler Buildings Turbine/Generator Building Coal Stockpile Pennsylvania Electric Company’s Front Street Generating Station c. 1960 Coal arrived at the Front Street Station in railroad cars or trucks. Conveyor belts moved it to storage bins, then to pulverizers which crushed it into dust.
    [Show full text]
  • 2338 [New York, September 5, 1882] EDISON's ILLUMINATORS.A In
    2338 [New York, September 5, 1882] EDISON’S ILLUMINATORS.a Anonymous Article in THE FIRST DISTRICT BRILLIANT WITH THE the New York Herald INCANDESCENT LAMP—THE ISOLATED SYSTEM IS IN SUCCESSFUL OPERATION.1 In stores and business places throughout the lower quarter of the city there was a strange glow last night. The dim flicker of gas, often subdued and debilitated by grim and uncleanly globes, was supplanted by a steady glare, bright and mellow, which illuminated interiors and shone through windows fixed and unwavering. From the outer darkness these points of light looked like drops of flame suspended from the jets and ready to fall at every moment. Many scurrying by in the preoccupation of the moment failed to see them, but the attention of those who chanced to glance that way was at once arrested. It was the glowing incandescent lamps of Edison, used last evening for the first time in the practical illumination of the first of the dis- tricts into which the city had been divided. The lighting, which this time was less an experiment than the regular inauguration of the work, was eminently satisfactory. Albeit there had been doubters at home and abroad who showed a disposition to scoff at the work of the Wizard of Menlo Park and insinuate that the practical application of his invention would fall far short of what was expected of it, the test was fairly stood, and the luminous horseshoes did their work well. For a long time the company have been at work preparing for the lighting of the dis- trict.
    [Show full text]
  • Renewable Energy Technologies: an Overview 11
    Mirage and oasis Energy choices in an age of global warming The trouble with nuclear power and the potential of renewable energy nef is an independent think-and-do tank that inspires and demonstrates real economic well-being. We aim to improve quality of life by promoting innovative solutions that challenge mainstream thinking on economic, environmental and social issues. We work in partnership and put people and the planet first. nef (the new economics foundation) is a registered charity founded in 1986 by the leaders of The Other Economic Summit (TOES), which forced issues such as international debt onto the agenda of the G7/G8 summit meetings. We have taken a lead in helping establish new coalitions and organisations, such as the Jubilee 2000 debt campaign; the Ethical Trading Initiative; the UK Social Investment Forum; and new ways to measure social and environmental well-being. Nuclear power is being promoted as the answer to climate change and energy insecurity. But, as a response to global warming, it is too slow, too expensive and too limited. And in an age of terrorist threats, it is more of a security risk than a solution. Instead, the characteristics of a flexible, safe, secure and climate friendly energy supply system apply to renewable energy. In comparison, it leaves no toxic legacy and is abundant and cheap to harvest both in the UK and globally. Contents Summary 2 Overview 5 Renewable energy technologies: an overview 11 Microrenewable energy: flexible, secure, clean and effective 15 The prospect for nuclear power 25 Nuclear power: what are the real costs? 34 Conclusion 42 Glossary 46 Endnotes 47 Summary Individually renewable energy sources like wind, solar and geothermal could, in theory, meet all of the world’s energy needs.
    [Show full text]
  • Guide to the Postcard File Ca 1890-Present (Bulk 1900-1940) PR54
    Guide to the Postcard File ca 1890-present (Bulk 1900-1940) PR54 The New-York Historical Society 170 Central Park West New York, NY 10024 Descriptive Summary Title: Postcard File Dates: ca 1890-present (bulk 1900-1940) Abstract: The Postcard File contains approximately 61,400 postcards depicting geographic views (New York City and elsewhere), buildings, historical scenes, modes of transportation, holiday greeting and other subjects. Quantity: 52.6 linear feet (97 boxes) Call Phrase: PR 54 Note: This is a PDF version of a legacy finding aid that has not been updated recently and is provided “as is.” It is key-word searchable and can be used to identify and request materials through our online request system (AEON). 2 The New-York Historical Society Library Department of Prints, Photographs, and Architectural Collections PR 054 POSTCARD FILE ca. 1890-present (bulk dates: 1900-1940) 52.6 lin. ft., 97 boxes Series I. Geographic Locations: United States Series II. Geographic Locations: International Series III. Subjects Processed by Jennifer Lewis January 2002 PR 054 3 Provenance The Postcard File contains cards from a variety of sources. Larger contributions include 3,340 postcard views of New York City donated by Samuel V. Hoffman in 1941 and approximately 10,000 postcards obtained from the stock file of the Brooklyn-based Albertype Company in 1953. Access The collection open to qualified researchers. Portions of the collection that have been photocopied or microfilmed will be brought to the researcher in that format; microfilm can be made available through Interlibrary Loan. Photocopying Photocopying will be undertaken by staff only, and is limited to twenty exposures of stable, unbound material per day.
    [Show full text]
  • 2012 Calendar Dear Friends and Colleagues, Including the History of the New York City Council and the Origins of Public Housing
    The Unforgiving Economy During the Great Depression, the federally-sponsored W.P.A. hired thousands of unemployed artists to beautify public buildings across America, including the High School of Needle Ernest Fiene: “Harmony Trades in New York. Above, backed by the words of the poet Walt Whitman, artists Ernest Fiene celebrated garment industry workers, unions, and business and government leaders. and Achievement,” 1940. LaGuardia and Wagner Archives 2012 Calendar www.cuny.edu/unforgivingeconomy Dear Friends and Colleagues, including the history of the New York City Council and the origins of public housing. For the past seven of those years, the archives has produced the I am very pleased to introduce the CUNY/New York Times in College 2012 CUNY/New York Times in College calendar projects, consisting of printed calendar, “The Unforgiving Economy.” Published in the aftermath of the calendars, websites and curricula focused on the following topics: voting worst economic crisis since the Great Depression, it is a timely look at the rights and citizenship, women’s leadership, immigrants, city life, freedom, economic history of the United States, helping readers to understand the public higher education, and health. patterns of economic growth and crises in our nation’s history. The commitment of the calendar’s sponsors has been particularly The calendar describes not only past periods—such as the Great important. CUNY offers special thanks to JPMorgan Chase Chairman and Migration, when many African-Americans left the “Jim Crow” South for C.E.O. Jamie Dimon, President Kimberly Davis of the JPMorgan Chase job opportunities in northern cities, only to find new and different forms Foundation, Senior Vice Presidents Leonard Colica, Michael Nevins and of racism—but looks to the future, toward a global economy that will be Timothy G.
    [Show full text]
  • The Configuration of the Rock Floor of Greater New York
    Bulletin No. 270 . Series B, Descriptive Geology, 73 DEPARTMENT OF THE INTERIOR UNITED STATES GEOLOGICAL SURVEY CHARLES D. VVALCOTT, DIHECTOK THE CONFIGURATION OF THE ROCK FLOOR OF GREATER NEW YORK BY WILLIAM HERBERT HOBBS WASHINGTON GOVERNMENT. PRINTING OFFICE 1905 CONTENTS. Page. LETTER OF TRANSMITTAL .................................................. 7 PART I. STRUCTURAL STUDIES ............................................. .9 Introduction......................................................... 9 Aids to geological studies on Manhattan Island..................... 9 Engineering enterprises that have pierced the rock floor............ 10 Keview of structural geological studies of the New York City area.... 12 Boroughs of Manhattan and the Bronx ........................ 12 Gale .................................................... 12 Mather.................................................. 12 Cozzens ................................................. 12 Stevens.................................................. 12 Credner................................................. 13 Newberry ............................................... 13 Dana.................................................... 14 Russell.................................................. 14 Kemp ................................................... 14 Merrill .................................................. 15 Eckel ................................................... 16 Gratacap ................................................ '16 Julien ..................... i.............................
    [Show full text]
  • Consolidated Edison Building
    Landmarks Preservation Commission February 10, 2009, Designation List 410 LP-2313 CONSOLIDATED EDISON BUILDING, 4 Irving Place, (2-12 Irving Place, 121-147 East 14th Street, 120-140 East 15th Street), Manhattan., 1910-1911, Henry Hardenbergh, architect; additions: 1912-14, Henry Hardenbergh, architect; 1926-28; Warren & Wetmore, architects, Thomas E. Murray, Inc, engineers; 1928-29 Warren & Wetmore, architects, Thomas E. Murray, Inc, engineers. Landmark Site: Borough of Manhattan Tax Map Block 870, Lot 24 in part, consisting of the land on which the described building is situated, excluding the 1915 addition at 142 East 15th Street and the parking lot to the east. On October 28, 2008, the Landmarks Preservation Commission held a public hearing on the proposed designation as a Landmark of the Consolidated Edison Building and the proposed designation of the related Landmark Site (Item No. 1). The hearing had been duly advertised in accordance with the provisions of the law. A total of seven witnesses, including a representative of the owner, City Council member Rosie Mendez, and representatives of the Municipal Art Society, the New York Landmarks Conservancy, the Union Square Community Coalition, the Historic Districts Council, the Metropolitan Chapter of the Victorian Society in America, and Manhattan Community Board 6 spoke in favor of the designation. There were no speakers in opposition to the designation. Summary The Consolidated Edison Building, constructed in stages between 1910 and 1929 for the Consolidated Gas Company, predecessor to Consolidated Edison, and designed by the leading architectural firms of Henry Hardenbergh and Warren & Wetmore, is a monumental presence in the Union Square neighborhood and has one of the great towers that define the Manhattan skyline.
    [Show full text]
  • Setting Rates: Best Practices for Electric Cooperatives
    Setting Rates: Best Practices for Electric Cooperatives PART 3 JANUARY 4, 2008 INSIDE THIS ISSUE A Brief History of Electric Industry Evolution and the Cooperative Rate Setting Emergence of Federal Power.............. 2 Editor’s Note: The first two parts of this series were included in the April 27, 2007, and REA Retail Rate Regulation............... 2 July 27, 2007, issues of Solutions News Bulletin. Additional articles in the series will appear throughout 2008. U.S. Energy Policy Since the Energy Crises of the 1970s .................. 3 Overview of Part Three State Regulation of Electric This special Solutions insert is the third in a series, “Setting Rates: Best Practices for Electric Cooperatives.” The series examines how electric cooperatives can apply best Cooperatives ........................................ 3 practices when setting rates for their members. Glossary ........................................... 4 This part deals with the historical development of rate setting for electric cooperatives and includes these topics: Additional Resources........................ 4 • Early state regulation of electric utilities • Industry evolution and the emergence of federal power • REA retail rate regulation • U.S. energy policy since the energy crises of the 1970s • State regulation of electric cooperatives • Glossary • Additional resources Early State Regulation of Electric Utilities The world’s first central electricity generating plant, Edison Electric Light Co.’s Pearl Street Station, went into operation in 1882 in New York City. Within a few years, several U.S. cities had multiple, competing investor-owned utilities (IOUs). Chicago alone had 29 electric companies by 1890. Initially, the Pearl Street Station served 59 customers for about $0.24/kwh. By 1900, technology improvements and competition had pushed average national residential rates down to about $0.17/kwh.
    [Show full text]
  • Thomas Edison National Historical Park National Park Service U.S
    Thomas Edison National Historical Park National Park Service U.S. Department of the Interior The Lab Notebook Special Edition WELCOME BACK! Welcome to the NEW Thomas preserved the laboratory’s cultural re- Edison National Historical Park, sources but almost tripled the space that the result of several renovation the public can now enjoy. initiatives at both Glenmont and the Laboratory Complex. The National Park Service did not do all this alone; we had the help of several part- No longer confined to a brief ners. Throughout the National Park sys- ranger-led tour of the first floor of tem, partnerships are essential for the con- Building 5, visitors now have ac- tinued protection and enhancement of cess to all three floors. Ranger- parks and historic sites and have been in- led tours can be arranged by ap- strumental in establishing educational pro- pointment. New exhibit panels grams, living history demonstrations, fund- and video kiosks are on display raising campaigns, habitat restorations, throughout the building. For an and a host of other activities. They supple- additional fee, you can take along ment the federal government’s limited re- one of our new audio tours . sources to help the parks fulfill their stew- ardship responsibilities. The Precision Machine Shop on the second floor features the Our partners include the Edison Innova- birthplace of the first motion pic- tion Foundation, the Friends of Thomas ture camera. Elsewhere on the Edison National Historical Park, Inc., second floor are Room 12, Edi- Charles Edison Fund, Rutgers University/ son’s private experimental room, The Thomas A.
    [Show full text]