The U.S. power grid in use today was built in the 1960s and 70s and is hard pressed to handle the extreme weather events caused by climate change, let alone the renewable energy needed to meet energy goals.
According to the U.S. Department of Energy, 70% of transmission lines are over 25 years old and approaching the end of their typical lifecycle. Grid upgrades that deploy modern grid technologies are sorely needed, and federal funding is available through the Grid Resilience and Innovation Partnership (GRIP) program, which recently closed applications for up to $2.7 billion in DOE grant funding under a second round.
Grid modernization has been underway in some states more than others, and the North Carolina Clean Energy Technology Center recently released The 50 States of Grid Modernization: Q1 2024 Quarterly Report, which looks at legislative and regulatory action related to smart grid and advanced metering infrastructure, utility business model reform, regulatory reform, utility rate reform, energy storage, microgrids, and demand response.
In Q1 2024, according to the report, 49 states plus DC and Puerto Rico took a total of 567 policy and deployment actions, the most common related to policies (133), financial incentives (108), and utility business model and rate reform (93).
Five top policy developments
Maryland: Lawmakers passed the Distributed Renewable Integration and Vehicle Electrification (DRIVE) Act in Maryland that directs the Public Service Commission to develop a program for utilities to establish virtual power plant (VPP) pilots to compensate owners and aggregators of distributed energy resources for distribution system support services.
Massachusetts: Eversource, National Grid and Unitil filed final electric sector modernization plans in January 2024. The plans include a variety of programs and investments, such as VPP programs, advanced distribution management system and distributed energy resource management system investments, resilience upgrades, heat pump integration, and non-wires alternative
Connecticut: The Connecticut Public Utilities Regulatory Authority (PURA) issued a set guidelines for utilities’ advanced metering infrastructure plans, including a directive to include advanced time-of-use rates and to use Green Button Connect functionality. Later in the quarter, PURA filed a straw proposal on performance incentive mechanisms (PIMs), which includes four PIMs based on non-wires solutions, equitable reliability, distributed energy resource interconnection, and avoided service terminations.
Colorado: The Colorado Public Utilities Commission (PUC) approved guidelines and directives for VPP implementation in Xcel Energy’s service territory.
Maine: The Governor’s Energy Office in Maine released its final long-duration energy storage (LDES) study that identifies policy considerations and actions for the state to support LDES. The PUC also released a study that examines utility control or ownership of energy storage, finding that utility ownership of storage should only be allowed under certain circumstances.
Top trends
Grid-enhancing technologies can boost the use of any existing transmission system, according to a study by The Brattle Group, which looked specifically at advanced power flow control, topology optimization and dynamic line ratings. The NC State report said use of grid-enhancing technologies (GETs) is a notable trend and noted the following actions:
- Virginia lawmakers enacted a bill requiring utility integrated resource plans to include a comprehensive assessment of the application of GETs and advanced conductors. In
- Maine legislators enacted a bill requiring the PUC to conduct a review of available GETs that large investor-owned utilities may use to reduce investment needs in grid infrastructure.
- Minnesota lawmakers introduced bills requiring utilities to file plans regarding the implementation of GETs to prevent grid congestion at the transmission level.
- New York legislators introduced bills that would allow the Department of Public Service to approve requests from distribution companies to develop GETs.
Other states considering legislation initiating studies on GETs include Connecticut and New Hampshire.
Virtual power plants
VPPs give grid operators a utility-grade alternative to new generation and system buildout by automating efficiency, capacity support and offering non-wire alternatives, according to Jigar Shah, director of the U.S. Department of Energy Loan Programs Office. “By deploying grid assets more efficiently, an aggregation of distributed resources lowers the cost of power for everybody, especially VPP participants,” Shah said in an article in pv magazine USA.
According to the NC State report, a state policymakers and regulators are taking steps to develop frameworks for VPPs in their states:
- Pennsylvania regulators issued an advanced notice of proposed rulemaking seeking input on VPPs as a potential resource for the state.
- Maryland lawmakers passed a bill directing the Public Service Commission to develop a program for utilities to establish VPP pilots, with each investor-owned utility required to propose a pilot or temporary tariff by July 1, 2025.
- Colorado PUC issued a decision outlining rules for VPP pilots and acquisition.
- California and Hawaii regulators are also advancing expansive programs to promote VPPs.
Microgrids
Microgrids are groups of distributed energy resources, such as solar modules on a home, connected to a battery system, that can disconnect from the grid and operate independently during a power outage. The U.S. Department of Energy has a vision that 30% to 50% of electricity generation will come from distributed resources by 2035, with microgrids playing a key role in the transition.
The NC State report found that a growing number of states are evaluating the potential for microgrids to provide resilience or other benefits in their states.
- Colorado Energy Office is currently developing a microgrid roadmap, which will examine how microgrids can improve grid resilience and reliability in the state.
- New Hampshire lawmakers recently passed a bill requiring the state’s Department of Energy to study the potential benefits, risks and other factors of developing a microgrid framework.
- Rhode Island PUC issued request for proposal for a study related to microgrid program design.
- Puerto Rico Energy is examining revisions to its existing microgrid revisions.
- Arizona regulators issued a decision prohibiting Arizona Public Service from providing microgrid services.
Lawmakers in California, Iowa, New Jersey, and New York also considered legislation related to microgrid studies during the quarter.
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