Power sector speakers stress consumer choice as Ill. communities go 100% green

Source: Nathanael Massey, E&E reporter • Posted: Monday, March 10, 2014

Utilities need to prepare for a more engaged, responsive consumer base, one that in some places is pushing for more distributed energy in the form of renewables, according to power sector leaders who spoke yesterday at an event hosted by the Edison Foundation’s Institute for Electric Innovation (IEI).”As a country, we’re in a period of profound changes to our energy landscape,” said Heather Zichal, former deputy assistant to President Obama for energy and climate change. The rapid deployment of renewable resources is adding new power to the grid even as electricity demand is peeling away from economic development for the first time, she said.”There’s no question that [utility power] is a business-intensive industry, and we have to be clear-eyed,” she cautioned. Consumer demands have at times stressed traditional business models, she said, and utilities will have to come up with new and dynamic ways to meet those demands in the future.

Zichal and other speakers made their comments on the same day a consortium of groups, including the World Wildlife Fund and the Environmental Law and Policy Center, released a report detailing how 91 communities in Illinois now provide 100 percent renewable energy to their residents. That move was primarily driven by the communities themselves, according to the report.

“The findings of today’s report are an example of Illinois leading our country’s movement to a more sustainable future from the community level,” said Sen. Dick Durbin (D-Ill.), in a statement. “Communities up and down the state have banded together to pursue renewable electricity, reducing both their utility costs and the state’s environmental footprint.”

He added, “Illinois is showing what can happen when change at the local level is harnessed to create a collective movement, and I hope other states take notice.”

The change was made possible through a mechanism called community choice aggregation (CCA), which allows communities to solicit bids from specific energy providers. In those bids, communities can specify their preferred energy mix, offsetting electricity consumption with credits from solar, wind or other renewable resources. CCA is currently permitted in six states.

Give the people what they want

Aside from limited actions by the executive branch of the federal government, the transition to a green economy has fallen primarily to states, cities and individuals. State renewable energy mandates have helped propel the transition, but communities like those in Illinois have also been part of the push.

Ultimately, customers and their choices set the menu of what utilities can provide in terms of power, according to speakers at IEI’s Powering the People event.

“In Nevada, we’ve seen something of a policy debate over what our reasons are for having a renewable portfolio standard in the first place,” said Michael Yackira, CEO of NV Energy. “Is it to create markets? To reduce fossil fuel consumption? Or to give our customers options? We’re trying to push that last argument.”

He added, “If a customer wants to put solar on their roof, irrespective of whether or not it makes economic sense for the customer, that’s an option you should be able to offer them.”

The work of utilities should be to advance power systems to accommodate growing distributed generation, as well as to find new ways of pricing services, like grid maintenance, that have been traditionally structured into rates.

But speakers cautioned that customer choice, if not carefully planned out, could backfire. Florida Light & Power Co. President Eric Silagy cited the example of Gainsville, Fla., where an ambitious bid to implement a feed-in tariff — modeled on Germany’s tariff for solar energy — has led to some of the highest electricity bills in the state.

“You have to have an honest conversation about the benefits and realistic cost” of any plan, he said. “Otherwise, those folks may be turned off of doing renewables in the future.”