Massachusetts is coming up short in its five-year grid modernization effort, according to several stakeholder groups who recently filed comments on utility plans being reviewed by state regulators.
Trinity Church Boston – Turtle Sculpture. Credit: Bill Damon
At issue is the lack of innovation and vision by Massachusetts utilities, which some critics say will impede the state’s ability to accommodate microgrids, energy storage, solar and other forms of distributed energy.
Criticism of the utility plans came last week from a range of entities including state agencies, consumer groups and environmental organizations in the latest unfolding of grid modernization efforts before the Department of Public Utilities (DPU).
The term ‘grid modernization’ describes strategies by utilities to remake the electric grid to incorporate more distributed energy, improve electric reliability, reduce costs, and embrace software intelligence that advances local energy. Grid modernization also often remakes business models and markets.
Massachusetts got off to a strong start with grid modernization in 2012 (DPU 12-76) when the DPU began investigating a path forward. Since then, however, other states — particularly California, Hawaii and New York — have leapt ahead.
Under a DPU order, Massachusetts’ investor-owned utilities — Eversource, National Grid and Unitil — filed grid modernization plans in August 2015. The plans sought preauthorization to spend hundreds of millions on various grid improvements.
Now two years into the complex review process, the DPU has entered the phase of collecting written comment on the utility plans from industry stakeholders.
Bolt-on improvements
Stakeholders critical of the utility plans say they focus more on old-style central grid improvements than on distributed energy. Only one utility, National Grid (DPU 15-120) included a microgrid in its original plan. The other utilities said microgrids are too nascent or expensive.
Eversource came under particular criticism after it modified its grid modernization plan (DPU 15-122/15-123), removing $400 million in grid improvements, and moving them into its rate cause (DPU 17-05). Its grid modernization plan now largely focuses on $138.2 million dollars for meters/time-varying rates, cybersecurity measures and some research and development.
The Cape Light Compact, an aggregation of towns that manage their own power in southeastern Massachusetts, charged that Eversource’s sees the future in “retrospective terms.”
“Its future entails twenty-year-old metering technology and an even older legacy billing system that cannot handle a full rollout of advanced metering,” wrote the Cape Light Compact.
The organization went on to say that “instead of planning for a data-driven grid, Eversource is stalling, relying on expensive bolt-ons and other substitutions.”
Value of microgrids in grid modernization
Among other things, the organization called for Eversource to include microgrid pilot programs in its grid modernization plan. Doing so would allow the utility to target a range of grid modernization goals at once, Cape Light said.
“The wide variety of research opportunities on microgrids includes: demonstrating their use as refuge centers, thereby reducing health and safety risks posed by major storms; quantifying various distribution system benefits; reducing energy usage and costs; reducing emissions; and promoting local economic development,” said Cape Light, quoting work by the Pace Energy and Climate Center.
The organization said that its territory – Cape Cod and the island of Martha’s Vineyard – are particularly well suited for microgrids given the region’s locational constraints, capacity limitations and other issues.
Cape Light added that microgrids would benefit customers and market participants more than allowing Eversource to build its own grid-scale batteries, as is now the plan (D.P.U. 17-05).
“Allowing Eversource to build large batteries across the Commonwealth would pose major risks to the competitive marketplace and would be inconsistent with state and federal energy policies,” Cape Light wrote. “On the other hand, a single microgrid demonstration project would serve a market enabling function, would allow Eversource to investigate multiple technologies at a single site, and would allow Eversource to pursue all four grid modernization objectives in its RD&D plan.”
The Department of Energy Resources, an energy advisory arm of the Governor’s office, recommended that the DPU reject the Eversource plan because of its weak cost-benefit ratio. The plan’s poor economic showing is partly because Eversource moved better performing energy projects into its rate case. The utility also didn’t adequately quantify the benefits of its projects that remain part of its grid modernization plan, according to the DOER.
The Attorney General’s Office called for the DPU to deny cost recovery for any of the Eversource grid modernization efforts. Among other things, the attorney general said that the utility failed to provide advanced metering throughout its service territory as the DPU had directed.
The Northeast Clean Energy Council (NECEC), a regional business organization for clean energy companies, said that the utility plans tend to focus more narrowly on improvements where utilities can recover investment through special rate collection than on true grid modernization. These include smart grid efforts grid automation, voltage management and associated central grid infrastructure changes.
National Grid showed greatest enthusiasm
Of the utilities, National Grid showed the “greatest enthusiasm for grid modernization,” said the Conservation Law Foundation. But still the utility’s $225-$830 million proposal lacked a comprehensive strategy, metrics or detailed project descriptions, according to the environmental organization.
“Any proposal by a utility for pre-approval for millions of dollars of spending should be supported by clearly articulated justifications, descriptions of outcomes, and metrics for monitoring the company’s progress. Despite proposing hundreds of millions of dollars of spending, National Grid’s GMP fails to supply these critical features,” wrote CLF.
As a next step in the grid modernization proceeding, the utilities will have an opportunity to defend their plans by filing reply comments before the DPU. Comments are due from Unitil on July 24, Eversource July 26, and National Grid July 28.
Although slow in its progress on utility grid modernization, Massachusetts is advancing distributed energy on other fronts.
The DOER recently set an aspirational target to secure 200 MWh of energy storage by 2020. The Massachusetts Clean Energy Center has kicked off a community microgrid grant program. The city of Boston has identified microgrid sites as part of its climate resiliency program. In addition, several microgrids are in operation — or are being developed — by universities, hospitals, the military and other institutions and businesses.
Many of these efforts are occurring within the backdrop of Massachusetts’ aggressive goal to reduce greenhouse gases 25 percent by 2020 and at least an 80 percent in 2050.
Where, when and how should Massachusetts build more microgrids? Join the debate by attending Microgrid 2017 in Boston.
