Murtha Means More

November 2014 - The Future of Utilities and Renewables - How Will Your Bottom Line Be Affected?

Introduction:

On Thursday, December 4, 2014, the Clean Energy Finance and Investment Authority (CEFIA) and the Renewable Energy and Efficiency Business Association (REEBA) will be co-hosting a special summit regarding “The Future of Renewable Distributed Energy Resources” in Connecticut.  This is an important Summit for anyone who is a stakeholder or policy maker in the renewable distributed generation industry.  It will provide a unique opportunity to listen to the experts from around the country discuss alternative rate design and net metering approaches in connection with the future of renewable energy distributed generation in Connecticut.   

What is the Summit about?

Over the last several years, there has been a strong emergence of renewable energy distributed generation in Connecticut as a result of the ZREC/LREC Program and other financing programs.  The major renewable technologies involved include rooftop and ground mounted solar photovoltaic (PV) systems, including both residential and commercial systems, fuel cells, battery storage, geothermal energy systems, small hydropower and wind systems. The Edison Electric Institute (EEI), which represents the interests of the electric utilities, recently published a report identifying these emerging renewable energy distributed generation technologies as “disruptive technologies” that may “compete with utility-provided services.”  Click here for the EEI report.

EEI argues that as renewable energy distributed generation increases, the demand for utility system power declines. As a result, fixed system costs, such as the costs of transmission and distribution services, will be recovered over fewer kilowatt-hour (kWh) sales by the electric utility, and this could put upward pressure on electricity rates.  A result is that the electric distribution utilities are proposing to modify their traditional rate design by placing more of the kWh related costs in the “fixed” customer charge.  Changes to net metering may also be on the horizon.

Why is the Summit important to renewable energy and policy makers?

Fundamental changes to electric rate structures will impact all customers, not only those who install distributed generation.  Increasing the fixed component of electricity bills can have a devastating impact on low-income customers and others trying to lower their monthly bills by using less electricity.  That’s anti-conservation.  What’s more, rate structure changes can erode future savings that customers who installed distributed generation were counting on to pay back their investment.  Going forward, changing utility role structures may put many renewable energy companies out of business in Connecticut. 

Is there a solution to the rate design and net metering problem?

The good news is that there are a number of regulatory models and rate design alternatives available to address the challenges posed by the transition toward increased adoption of renewable energy distributed generation.  The purpose of the Summit is to provide a forum for the experts from around the country to discuss rate design and net metering alternatives that will keep the renewable energy industry in Connecticut robust, while at the same time allowing the electric distribution utilities to continue to thrive.

Why renewable energy stakeholder and policy makers should attend the Summit:

Anyone who is a stakeholder or policy maker in the renewable distributed generation industry should attend the Summit because this will be a highly informative debate and will provide a unique opportunity to listen to the experts from around the country discuss alternative rate design and net metering approaches for the future of renewable energy distributed generation in Connecticut.

 

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