SMART GRID A Regulatory Perspective Matt Baker CommissionerColorado Public Utilities Commission
Types of Colorado Electric Utilities Colorado Energy Sales by Type of Utility Public 17% Investor-Owned 55% Cooperative 28%2
Electric Generation Fuels in Colorado 1990-2008 Colorado Electric Generation by Fuel Source 1990-2008 70,000 60,000 Renewable 50,000 Gigawatthours NG 40,000 30,000 Hydro 20,000 Coal 10,000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20083
History of Colorado’s RPS• Amendment 37 (2004) – Voter initiated; 10% renewable energy by 2020; separate solar requirement; net metering• HB 1281 (2007) – 20% renewables by 2020; 10% for municipal utilities and cooperatives; solar requirement• HB 1001 (2010) – 30% by 2020; carve out for DG of 3% by 2020 (~650 MW PV)4
Xcel Energy• ~7000 MW peak load• 2004-present – 1,200 MW wind capacity – 60 MW solar capacity• By 2015 – Additional 750 MW wind capacity – >250 MW new solar thermal – >160 MW new photovoltaic5
Smart Grid Defined Source: Electric Power Research Institute. “The Green Grid: Energy Savings and Carbon Emissions Reductions Enabled by a Smart Grid.” May 2008.
What is Smart Grid? A Broad Definition: Overlay of Bi-Directional Communication and Control Mechanisms onto the Electricity Grid Marriage of Electricity Grids with Information Technology Involves the entire electricity value chain: Generation Transmission Distribution Consumption Smart Grid is an enabler: Demand Response Efficiency Renewable Integration (central and distributed) Plug-in Hybrid Electric Vehicle (PHEV) Integration Consumer Choice
Smart Grid Enabled System Electricity providers will have greater access to real-time information about the state of the system from generation to consumption Electricity providers will have greatly increased ability to control both supply and demand Consumers will have information about the cost and environmental attributes of their electricity and the ability to automate efficiency Department of Energy, National Energy Technology Lab http://www.netl.doe.gov/moderngrid/opportunity/vision_characteristics.html
21st Century Electricity System• Information rich• Distributed design and operation• Clean tech priority• Ubiquitous storage• Automated operations• Highly differentiated energy services Source: Steve Hauser, NREL
Transitional Challenges Complex array of potential technology choices. Smart Grid technology (equipment and software) will be a moving target in the near term. Industry consolidation already occurring. Attrition likely as dominant providers emerge. Interoperability standards are critical. Consumer education and adoption extremely important, very uncertain. Regulatory landscape Balkanized regulations (Federal, State, local) will lead to deployment and integration challenges.
The Built Environment• How can smart grid lower costs?• What revenue centers will it provide? – HVAC – Energy management – Energy production – PHEVs . . .• How do codes and regulations enable progress? – Implications to utility law? • vertically integrated versus componentized approach?
Urban Context• T&D efficiency gains – i.e., distribution automation• Building energy efficiency• Microgrids – small, integrated energy systems in which generation and load are co- located – can operate in parallel with the grid or intentionally islanded• Energy Storage – Utility scale or localized• Renewables Integration• Electric Vehicles – Vehicle to Grid (V2G) – Charging infrastructure – Parking Z. Ye, et al. Facility Microgrids, National Renewable Energy Laboratory http://www.nrel.gov/docs/fy05osti/38019.pdf at 1.
Smart Grid: Regulatory Evolution• Regulatory landscape must keep abreast of innovation – Should promote -- not stymie -- investment• Investors – Who has the expertise? – Who takes the risk? – Who owns smart grid infrastructure components?• What codes, standards will apply?• How to ensure cyber security?
Regulatory Incentives• As with EE and DSM, utilities need incentives to invest in technology that decreases sales – Decoupling – Dynamic rate structures – But cost recovery for infrastructure investments• Which investments require a CPCN?• Which do not?• Who pays? – Minimize risk to ratepayers
Conclusions: Going Forward• Smart grid offers promise and benefits – But also some risks• Do what makes economic sense now – T&D upgrades are cost effective• Come to us with pilots• Allow third parties to work with business owners and homeowners to achieve greatest gains