Ann Berwick makes clear that big change is afoot when asked about Massachusetts and microgrids.
The chair of the Massachusetts Department of Public Utilities says that utilities better prepare as the new world of distributed energy emerges. Unless they find new ways to make money, “somebody is going to supplant them,” she said.
EnergyEfficiencyMarkets.com interviewed Berwick in early May as the DPU was preparing to issue a significant ‘grid modernization’ decision. The proceeding – and related DPU dockets – are likely to shape not only the state’s future utility, but also the developing microgrid and distributed energy industries.
“I think the utilities are going to have to figure out a different business model because it will be absolutely of no avail for them to push back against the addition of more and more distributed resources. That horse is out of the barn,” she said.
Welcome to Microgrid Knowledge! This is the new Thursday edition of Energy Efficiency Markets Newsletter. Read more here about what you can expect from our new publication, and why you are receiving it.
Climate change is demanding additional renewable energy. The grid is refashioning. Utilities must keep up and regulators must be on board, she said: “Going backwards is not an option.”
It’s little surprise that microgrids are important to Massachusetts. The state has been a leader – indeed some would argue the leader – in energy efficiency policy. For three years running it has ranked as the top state in a national scorecard produced by the American Council for an Energy-Efficient Economy. Microgrids could enhance the state’s energy efficiency in several ways. Among other things, they reduce electric line loss because of the close proximity of the customer to the generator in a microgrid. In addition, many existing microgrids incorporate highly efficient combined heat and power.
Efficiency is just one reason the state is looking to modernize its grid. Like its neighbors in the Northeast, it is seeking ways to harden its electric system to avoid a repeat of the power outages brought to the region by severe storms in recent years.
“This [grid modernization} docket has a number of global level objectives, including the integration of distributed resources and reducing the effects of outages. Microgrids are obviously relevant to both of those,” she said.
Microgrids also are an environmental play for Massachusetts. Governor Deval Patrick has enacted an aggressive greenhouse gas mandate that requires all sectors of the economy to reduce greenhouse gases 25 percent by 2020 and 80 percent by 2050.
What’s the best way to track Massachusetts’ on microgrids? Follow not one, but several proceedings before the DPU. These include the grid modernization docket (D.P.U. 12-76-A), along with related proceedings dealing with electric vehicle charging (D.P.U. 13-182), time varying rates (D.P.U. 14-04), and carbon dioxide pricing.
“All of these issues are closely related. In order to tap time varying rates, you’ve got to have advanced meter functionality. In order to have microgrids operate to their fullest potential, I think you also need advanced metering functionality and time-varying rates,” she said.
The state also is closely involved with the Massachusetts Clean Energy Center’s planned “Microgrid Challenge,” which will look at opportunities and barriers to microgrid.
“Grid modernization is really going to change the rules of the game,” Berwick said. “It is going to change what I heard somebody refer to as the game board that we are all on playing on: Utilities, regulators, customers. It’s going to break open our world to all kinds of new approaches to the distribution of electricity and how we pay for it.”
She couldn’t speculate on the outcome of the various proceedings, since they are still ongoing. But she expects Massachusetts to produce granular specifics –“not just it’s-a-good-idea” – on topics like time varying rates. “I’d say the Patrick administration is visionary. We’re looking at [the issues] at the 1,000 foot-level in terms of what do we need to do to change the playing field for utilities and regulators – and also at the more granular level in dealing with things like time-varying rates electric vehicles.”
Stay tuned. Much more to come from Massachusetts in the coming months.
This article is an excerpt from the first of a series of ‘Think Microgrid’ guides from EnergyEfficiencyMarkets.com. We take an in-depth look at microgrids and the regulatory and policy changes needed to foster industry growth. Check back next week to download the guide free of charge.