A large well-established US electric utility has set its sights on leading the transition to a distributed energy future, featuring both clean generation sources and new technology from a multitude of private sector providers.
Southern California Edison has filed an application with its regulator to spend $2.3 billion to upgrade its electric grid to make it ready for distributed energy resources (DER). The new General Rate Case (GRC) for 2018 to 2020 was submitted to the California Public Utilities Commission (CPUC) on September 1. Along with the rate application, the utility submitted a white paper “The Emerging Clean Energy Economy.” It says the paper "is laying the groundwork for more constructive conversations with stakeholders about its proposals.”
Southern California Edison (SCE) President Ron Nichols said the utility is expecting 1.5 million DERs to be added to its system by 2025. The investments it proposes to make, if approved, would enable utility operators to see the DERs on its system, and hopefully reduce the cost of upgrades required to meet anticipated load growth. Much of the DER is expected to come from private arrangements between customers and third parties. However new California legislation requires utilities like SCE to develop and own 500 MW of behind-the-meter storage, a category of new investments that would fit into SCE's DER plans.
The utility envisions releasing public Requests for Offers (RFOs) “to see what DER or portfolio of DER could avoid or defer a utility capital expenditure at (a given) location,” said Caroline Choi, SCE Vice President for Regulatory Affairs. "We would choose the DER solution to avoid the utility capital expenditure and that capital could be used somewhere else.”
One of the complexities is devising new rate structures that properly reflect the locational and time-sensitive value of DERs on the grid. The paper explores options for “location- and market-based pricing,” and stresses that an appropriate mechanism would “identify the wholesale, distribution, and societal value of energy injected into a specific part of the grid." It also notes that, "Customer rates must evolve so that all customers of the grid make an equitable contribution to maintaining it, while not disadvantaging existing customers who presently rely on DERs.”
As reported by Herman K. Trabish in Utility Dive, the proposed grid modernization would include upgrading outdated circuits, automation for real-time monitoring and control, new telecommunications capabilities with fiber-optic cable and other systems, new software for grid management by system operators, and technology platforms to do distribution system forecasting, planning, and management.
The proposal has already generated significant controversy amongst ratepayer groups in the region. Public hearings on the application are expected in mid-2017 and a final decision in January 2018.
For more information, the white paper is available at this location: