A lot of states are talking about building a grid of the future and microgrids. But often it seems more like the grid of the far-off future.
Not so, however, in Rhode Island. The state is taking advantage of its small size and second-mover position to act fast and avoid problems bogging down other states.
In a recent interview with Microgrid Knowledge, Macky McCleary, administrator for the state’s Division of Public Utilities and Carriers (DPUC), offered insight into why the state is moving quickly to create a new utility policy framework and modernize its electric grid.
How fast is fast? Gov. Gina Raimondo kicked off Rhode Island’s “Power Sector Transformation Initiative” in March. The state hopes to have a policy proposal in the Fall, and “steel or copper or fiber optics in the ground by sometime in 2018,” he said.
While that may not sound speedy in an age of instant messaging, it is fleet of foot for the heavily regulated, infrastructure-intensive world of electric power. Consider that New York has been ironing out its grid overhaul, Reforming the Energy Vision, for more than three years.
Second-mover advantage
To be fair, McCleary points out that Rhode Island has got a couple of advantages over states that started working on grid modernization policy earlier, like California, Massachusetts and New York.
First, by starting later, it’s learning from the others. Second, it’s a small state – the nation’s smallest geographically – and has only one utility.
Further, that utility, National Grid, “is significantly more progressive than many” when it comes to grid modernization, he said. Rhode Island is not envisioning a battle with the National Grid, but instead sees the utility as “a brain to look into,” given its experience working on grid modernization in New York and Massachusetts.
Rhode Island hopes to avoid the kind of problems that arose in Illinois, Maryland, and Pennsylvania, where utilities put forward microgrids before the states had set clear policy on utility cost recovery. The requests were rejected or delayed.
Macky McCleary, RI Division of Public Utilities and Carriers
Make the market do the work
“From a regulatory theory point of view, you really want the market to do the work. You have to do the thinking,” he said. “I’m trained as an architect so I think about it like designing a building. I don’t randomly start choosing materials and throwing bricks on. You spend the thought-time upfront.”
To that end, the state is meeting with stakeholders and gathering information through the end of May. The agencies tasked with the project — the DPUC, the Public Utilities Commission (PUC) and the Office of Energy Resources — are working on four topics:
- Utility Business Model
- Distribution System Planning
- Grid Connectivity Functionality
- Beneficial Electrification of Transportation and Heating
By October or November, the working group hopes to have a grid of the future proposal ready for review by regulators and, if necessary, lawmakers, with the intent of finishing up in the first half of 2018.
It’s too soon to say what the final proposal will look like. But McCleary outlined a few likely outcomes.
The state envisions a distributed grid evolving out of the plan, one with a two-way flow of electrons – from the grid to the customer and customer to the grid. The new grid also will use significantly more renewable energy, in keeping with Raimondo’s call for 1,000 MW of renewables by 2020, a significant increase over its current 138 MW.
Energy storage is likely to be part of Rhode Island’s grid of the future proposal. Whether that will mean setting a megawatt target, as California and Massachusetts did, remains to be seen.
“It’s almost certain that we will need some form of storage, both in front of the meter and behind the meter. We have not decided if setting a goal is the right way to do that, or if there are other tools,” he said.
RI’s Macky McCleary will be among the featured panelists at Microgrid 2017, Nov. 6-8 in Boston.
When it comes to microgrids, only a couple of projects are now underway in the state, one of them in Newport. The state may or may not set microgrid goals. But in any case, McCleary sees the state’s grid of the future policies setting the groundwork for more microgrids.
“It really comes down to utility business model: how you pay and what you compensate for,’ he said. “When you lay that market foundation properly, [microgrids] will accelerate just as renewables have over time in New England. We need to lay the financial incentives first. And that’s what we’ve been focusing on in terms of the power sector transformation.”
What won’t change in Rhode Island?
“We are a decoupled and deregulated state. Is it likely we will suddenly become become a vertically integrated state? I find that almost impossible to imagine,” he said. Rhode Island was one of the first state’s in the nation to restructure the electric industry and open it up to retail competition about two decades ago.
Grid of the future and microgrids: the complications
Deregulated states come with a special set of microgrid complications. Competitive developers have argued that if utilities get in the business of developing microgrids in deregulated states, they are defying restructuring rules that prohibit them from building and owning generation. Some utilities have countered that microgrids are distribution assets, not generation.
It is yet to be seen how Rhode Island will deal with these competitive issues.
“Is it a possible outcome that the utility will be playing in this space. Yes. Is it possible that we could create a market that is robust enough without the utility being directly involved? Potentially, yes,” he said.
The state is inviting stakeholders to participate in its proceeding by attending meetings or viewing videos of the proceedings and commenting in a dropbox.
“This is an exciting time for Rhode Island. We love it when being small is something that gives us a big advantage. We love leap-frogging the big guys,” he said.
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