Including the consumer in the grid

With the National Association of State Utility Consumer Advocates (NASUCA) mid-year meeting having happened last week, a significant topic to keep in mind is how to integrate new technologies like distributed generation (DG) into our electricity system in a fair and open manner, given that this is a major issue facing utility consumers across the country. 

There’s no denying that new technologies like DG, while exciting and indicative of a robust and innovative electricity future, are changing the way that customers interact with and use the grid.  And although not everyone agrees on how these technologies should be deployed, CCIF – a collaboration of consumer advocates, state commissioners and utility representatives – believes there is a unique opportunity for the various players to come together and think about an appropriate path forward.  This path hinges on the idea that consumers should be empowered to make their own choices when it comes to electricity, but in a way that does not upset the delicate balance that exists within the electricity grid – a balance that ensures a reliable and sound energy supply. 

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As quick background, DG sources are non-centralized means of electricity generation that are generally connected to the electricity grid and located at or near consumers’ homes or businesses.  Examples of DG include things like solar panels, energy storage devices, fuel cells, and small wind turbines.  Consumers can take advantage of these new technologies, and it’s worth acknowledging that they may play an important role in our country’s – and each state’s – energy mix.  

However, as consumers exercise their choice to install these kinds of new technologies, we need to balance consumer choice with reliability and effective maintenance of the electricity grid.  DG sources, because they aren’t connected to the electricity grid in a centralized manner, require changes to utility system planning and operations.  For example, new technologies are driving “two-way” flows of electricity, versus one-way.  As exciting as it is that the electricity grid enables the use of these DG technologies, they may impose additional costs and challenges on grid operators. So as DG takes off, we need to look at who bears the brunt of these extra costs. 

It’s also worth noting the critical role that the grid plays in ensuring electricity is delivered to consumers reliably and safely.  We often take the grid for granted – but to keep the lights on for all of us, electric companies have to maintain the poles, wires, meters, advanced technologies, and other complex infrastructure – all of which represent fixed costs for grid operators.   These fixed costs should be shared by all consumers, and DG customers should not be exempt.

Given that many of these technologies are  new, state regulators, utilities and consumer advocates like the members of NASUCA, should work together to ensure that the proper consumer protections are in place and that consumers are provided with transparent and reliable information as they make decisions related to DG.  For example, DG technology companies should clearly communicate with consumers about the risks and costs involved in their systems.  Consumer protection policies should also be periodically reviewed and updated to ensure consumer interests are always kept in mind and that there is a clear avenue to resolve complaints.

DG technologies are changing the game when it comes to electricity production and distribution. As more consumers install DG systems, we must accommodate consumer choice while also ensuring the reliability of the grid.  Through more discussions like those at NASUCA’s Mid-Year Meeting this week, we can ensure that DG energy sources are integrated in a safe, fair, cost-effective and reliable manner. 

McMurrian is executive director of the Critical Consumer Issues Forum (CCIF), a unique national forum in which state regulators, consumer advocates, and electric utilities – via a series of facilitated, interactive dialogues – engage in productive debate and develop consensus on key issues of importance to consumers and policymakers.  She is a former Florida Public Service Commissioner (2006-2009).