On Oct. 27, 2016, the CPUC hosted a conversation
between former New York Public Service Commission Energy Advisor, Rudy
Stegemoeller, and CPUC Commissioner Mike Florio. Paul De Martini of ICF International
moderated the two-hour discussion at the CPUC’s San Francisco headquarters. Describing California’s Integrated Distributed
Energy Resources (IDER)
proceeding and New York’s Reforming the Energy Vision (REV)
initiative, the pair discussed differences between the California and New York
approach to the modernization of the electric distribution grid in their
respective states.
While the necessity of upgrading New York’s electric system
became apparent in the wake of Hurricane Sandy, in California the change has
been more policy driven. Commissioner Florio pointed to aggressive mandates
adopted by the Legislature for renewable energy and climate targets, including
passage of Assembly Bill (AB) 327 in 2013, which directed the CPUC to conduct distribution
resource planning. In the past, California had made certain efforts to address
distributed generation, but was treating these resources “like dessert.” AB 327
moved preferred resources “front and center.”
“This is not an add-on to the real stuff,” Commissioner
Florio explained about the increasing reliance on distributed energy resources
(DERs), “this is the real stuff.”
To displace the need for capital grid improvements, DERs
need to be able to come online at the right time, place, and right assurance of
performance. For this, information communication is critical. In California,
the California Independent System Operator has adopted tariffs to allow
providers of distributed resources (large customers and/or aggregators) and
ancillary services to bid into the electricity supply market.
Both speakers agreed that aggregation of DERs will become
increasingly essential. Mr. Stegemoeller described a future in which the line
between wholesale and retail providers will begin to blur. Dynamic load
management – with demand responsive to availability of supply – will likely
require a leveling out of the value streams in order to resolve conflicts
between hours of operation that would benefit transmission over distribution
needs. Utilities are well-positioned to serve as the aggregator of aggregators,
under a new business model where they are the owners of the wires and
connections – but are no longer the primary generators. Imagining such a future, Commissioner Florio
predicted jurisdiction will become increasingly important as the wholesale
power system is regulated by the Federal Energy Regulatory Commission - with
the transmissions systems owned and operated by the utilities.
Though the two states have taken different paths, they are
now at a point of convergence towards a strikingly similar vision. Both states
have adopted a target of 50 percent renewable electricity by 2030, and a 40
percent reduction in greenhouse gas emissions from 1990 levels by 2030 - in
addition to comparable building energy consumption reduction goals.
Many stakeholders are participating in both processes,
working together - and on regional matters to develop an integrated, 21st
century approach to grid management, resiliency, efficient utilization of existing
resources, and regulation of an evolving utility business model.
An archived video
of the IDER REV discussion is available online. For more information on the California and New
York programs, please see:
This discussion was held as part of the CPUC’s Thought Leaders Speaker Series,
which was designed to stimulate thought on and discussion of some of the most
pressing challenges facing California utility regulators and the private sector
industries impacted by state policies.