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Renewable Energy Systems Americas Inc. 11101 W. 120th Ave. | Suite 400 %URRPÀHOG&2| 303.439.4200 )RUPRUHLQIRUPDWLRQRQ our energy storage solutions res-americas.com [email protected] please scan the QR code. features JANUARY/FEBRUARY 2015 • VOLUME 40, NUMBER 1 24 24 Building the 21st-Century Power System The electric utility industry will use technology, innovation, and creativity to build the safe, reliable, and affordable grid of the future. BY THEODORE F. CRAVER, JR. 34 34 The Evolving Distribution Grid As the distribution grid of the future evolves, new business opportunities for utilities will emerge—driven by changing customer expectations. BY PAUL DE MARTINI 42 Energy Outlook 2015 As the 114th Congress convenes, 42 Electric Perspectives asked four energy association CEOs to offer their insights and outlook for energy policy in the New Year. www.eei.org JANUARY | FEBRUARY 2015 3 ELECTRIC PERSPECTIVES STAFF Clare James Johnson DIRECTOR OF STAKEHOLDER COMMUNICATIONS [email protected] departments Bruce Cannon ASSOCIATE EDITOR JANUARY/FEBRUARY 2015 • VOLUME 40, NUMBER 1 [email protected] Nhu Mai Le SENIOR GRAPHIC DESIGNER [email protected] Suzette Herchig 6 52 SUBSCRIPTION COORDINATOR [email protected] president’s message innovation EDITORIAL BOARD A look to the future. Partnerships transforming the Edward Comer VICE PRESIDENT, GENERAL COUNSEL, power sector. AND CORPORATE SECRETARY Richard McMahon VICE PRESIDENT, ENERGY SUPPLY 8 AND FINANCE Jim Owen powering change EXECUTIVE DIRECTOR, MEMBER RELATIONS AND MEETING SERVICES Meeting tomorrow’s demands today. David Owens EXECUTIVE VICE PRESIDENT, BUSINESS OPERATIONS AND REGULATORY AFFAIRS 10 Quin Shea VICE PRESIDENT, ENVIRONMENT 56 Stephanie Voyda editor’s note MANAGING DIRECTOR, Striking up a conversation. environment COMMUNICATIONS EPA’s proposed greenhouse gas Brian Wolff EXECUTIVE VICE PRESIDENT, PUBLIC POLICY emissions guidelines. AND EXTERNAL AFFAIRS 12 CIRCULATION Suzette Herchig 202.508.5607 news + trends 58 [email protected] Driving innovation in electric Subscriptions are $100 per calendar year; transportation… and more. distribution however, the cost is prorated throughout the year. Please contact Unlocking the opportunity in smart Ms. Herchig for the current inverters. prorated amount. ADVERTISING SALES Marshall Boomer THE YGS GROUP 62 717.430.2223 [email protected] Justin Wolfe plugging innovation THE YGS GROUP A bright future for Tucson community 717.430.2238 23 solar program. [email protected] Mailing label corrections: send old label and correct title and energycareers@work address to Subscription Coordinator, Electric Perspectives at EEI. Diversity is key in energy workforce 64 Allow 12 weeks. recruitment. Postmaster: send address changes to the edge Subscription Coordinator, Electric Perspectives, EEI, Plug-and-play power grid. 701 Pennsylvania Avenue, N.W., Washington, DC 20004-2696. Periodicals postage paid at Washington, DC, and additional mailing office. Electric Perspectives (ISSN 0364-474X) connect with us is published bimonthly by Edison Electric Institute, Inc. On the cover: Ted Craver, chairman, 701 Pennsylvania Avenue, N.W., facebook.com/EdisonElectricInstitute Washington, DC 20004-2696. president, and CEO of Edison International www.eei.org and chairman of the Edison Electric Institute, The title is a registered trademark of discusses the grid of the future. Edison Electric Institute. twitter.com/Edison_Electric Statements of fact and opinion are the (Photo courtesy: Southern California Edison) responsibility of the author(s) alone and do not imply an opinion on the part of EEI, youtube.com/user/EEITV its employees, or members. Each advertiser and advertising agency assumes full liability for all contents of advertisements printed. Copyright © 2015 by 4 ELECTRIC PERSPECTIVES | www.eei.org/ep Edison Electric Institute, Inc. EEI Publication No. 43-15-01. Protect Your Steel Transmission Assets Below-grade corrosion is a reliability risk. Let Osmose help you design and implement a steel pole and tower assessment, remediation, and rehabilitation program to protect your steel transmission assets. What’s below grade may surprise you. 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ASPLUNDH.COM • 1-800-248-TREE JANUARY | FEBRUARY 2015 5 AN INSIGHTFUL LOOK AT WHAT’S AHEAD FOR president’s message THE ELECTRIC POWER INDUSTRY. A Look to the Future By Thomas R. Kuhn, president, Edison Electric Institute. he New Year is upon us, which means that it is not only a time for refl ec- tion, but also an opportunity to look ahead and think about change. Many of you have probably made a New Year’s resolution or two. Here at the T Edison Electric Institute (EEI), we remain resolved to meet the ever-rising tide of changes happening across the electric power sector. With a strategic and renewed focus, EEI will be working with policymakers and stakeholders on issues that impact our member companies, and we will be educating consumers about the critical role of our industry, the value of electricity, and the many customer-focused innovations transforming the electric power grid. I always say that there are three key drivers to change—new technologies, shifts in public policy, and evolving customer and market expectations. How our industry adapts to and leads these changes, while continu- ing to provide value to our customers, will defi ne our long- term success. Two of the drivers of change—technology Utilities have established and public policy—are discussed throughout this edition of Electric Perspectives. But, as we settle into the New Year, relationships with their I fi nd myself thinking about the third element: the import- ant role of customers. customers, and customers As utilities continue to develop and leverage new today are driving innovation technologies to transform how they generate and deliver electricity, customers also are changing how they use our and change. product. The typical U.S. home now has, on average, at least 25 electronic products—99 percent of which must be plugged in or recharged. After all, electricity is the power behind our smart phones, smart appliances, and smart homes and businesses. Indeed, customers want to be able to plug in their new devices or access new services, and they expect that they will commu- nicate seamlessly. Customers also want more control over their energy usage and costs, and smart appliances are communicating with the grid to meet those expectations. In short, customers expect us to develop and sustain a grid that supports all of these needs and that gives them fl exibility and choice in how they use energy. More broadly, every facet of the economy is experiencing a major shift in how it works, how it communicates, and how it serves its customers—and our indus- try is powering the technologies that make this possible. This undeniable trend of increased digitization and automation will only increase the importance of electricity to the economy and consumers. There are many discussions taking place about the evolving distribution grid—or what some call the ”utility of the future”—including what it is, what it will look like, who will be the key players, and what will be the role of customers. 6 ELECTRIC PERSPECTIVES | www.eei.org/ep I fi rmly believe that utilities must continue to operate the distribution system. Since utilities already plan, build, and operate the grid, it makes sense that they should continue to plan, invest in, and operate the distribution system, working in partnership with third-party technology providers, our regulators,