Position Statement on The Utility's Role in Distributed Energy Resource Deployment, Ownership, and Integration
Distributed Energy Resources (DER) are, and will increasingly be, a key resource in the portfolio of power system resources. DER are capable of delivering or offsetting energy, capacity, and ancillary services in a manner that fulfills both the legacy and the evolving regulatory compact.
This policy statement should not be viewed as endorsing any single technology, business model, or industry; rather, it should be taken as a basic set of principles that can be applied to the various scenarios related to the expanded deployment of DER. In order to reach their optimal potential, the following points should be considered:
1. Optimal deployment of DER will require proactive engagement and cooperation among utilities, technology providers, energy service providers and developers, financial entities, regulators, and consumers.
2. When DER assets and technologies are deployed in front of the meter, considerations for the safety, stability and reliability of the grid must be taken into account. When DER assets are located on the customer side of the meter, these same considerations should be taken into account to the highest degree feasible and reasonable. In both cases allocation of costs and benefits should be transparent.
3. Incumbent utilities possess unique detailed technical and operational knowledge of the grid, critical for optimizing the benefits from DER for all electric power customers both, individually and for the system overall. To realize the full value of DER, utilities will need to participate in:
- Evaluating the benefits and costs of DER, to ensure all stakeholders derive cost and benefits from integrating DER.
- Guiding the deployment - including location on the grid, wires upgrades, combinations of technologies per site, and details such as panel orientations – of DER to account for the current capabilities and conditions of the system as well as anticipated future needs.
- Developing standards for autonomous, semi-autonomous and direct control of DER. Utilities and owners will need to collaborate in the development, testing, and execution of those standards.
- Supporting additional technological advancement, with demonstration and pilot projects facilitated by incumbent utilities, in a manner in which costs and benefits are shared by the widest range of stakeholders.
4. Utilities can also bring additional benefits for deployment beyond grid integration, based on utilities’ access to and cost of capital, rate stability, relationships with their customers, expanded consumer education, and holistic experience with all types of DERs. These capabilities may be leveraged either through direct ownership, joint ventures, or advisory roles. They may include community solar, customer choice through targeted incentives and or tariffs, energy audits, on-bill financing, and utilities’ credit support to back the development of DER with a power purchase agreement. Utility involvement in DERs should be under terms that foster fair and reasonable competition among DER providers.
5. Non-utility DER ownership models, including direct customer ownership and third party ownership, can provide additional benefits. These benefits include diversity of customer choices, cost stability, and broader access to resources, including additional streams of capital, expanded consumer education, innovative customer acquisition models, and provision of complementary goods and services.
6. Proper policy safeguards are needed to ensure a vibrant and competitive DER market evolves ensuring that non-utility ownership models have equal and open access to the interconnection processes, clear direction from grid operators on deployment preferences, and transparency on the cost and benefits of the services provided.