PSC report fails to produce vision for cleaner, more equitable grid

In June of 2015, the Public Service Commission (PSC) opened case FC 1130 to examine how to modernize D.C.’s electric delivery system, also known as “Grid of the Future”. This began a process of several workshops where the D.C. Government, utilities, and a large number of commercial developers were invited to give presentations. They discussed various aspects of the “Grid of the Future”. DC SUN presented filings as well as formal and informal comments during this period requesting the PSC lay out a clear framework and objectives for the proceeding. For more detail see DC SUN’s filing in the proceeding.

The result of these meetings and comments was to be a “staff report” from the PSC that summarized its findings and provided recommendations for how the PSC should proceed. The PSC originally promised to produce this by August of 2016. In late January, the PSC finally released its report. Unfortunately, the report lacks any framework to address the larger “Grid of the Future” challenges.

Instead, the report recommends specific steps the PSC should take. These may be useful in addressing issues that are emerging in today’s market, But nothing in the proceeding sets the framework to address a “Grid of the Future” with large-scale integration of solar, demand management, storage, and microgrids.

The day is fast arriving when D.C. ratepayers could significantly lower their electric bills through a more efficient, and better coordinated use of existing resources; drastically reduce their carbon impact through large scale integration of solar and other technologies; improve reliability with the use of distributed storage and microgrids; and promote thousands of local jobs in the clean energy sector. Nothing in the PSC Staff Report sets the table to make D.C. the clean energy and energy equity leader that it’s citizens and elected officials demand.

The report begins with a brief discussion of how new technologies are allowing for different types of distributed electric generation, how other public service commissions and state-level policymakers have responded to these technologies, and presents a narrow proposed course of action to modify our existing energy rules to better accommodate these technologies.

The report lays out several recommended courses of action for the PSC:

1. Adopt new regulatory definitions of distributed energy resources (DERs).
2. Streamline the “notice of construction” (NOC) rules for renewable generation facilities in order to grant approvals within 20 days, and modifying interconnection rules.
3. Modify the definition of “electrical company” to expressly exclude any person or entity distributing electricity from a behind-the-meter generator to a retail customer behind the same meter.
4. Amend the definition of “electricity supplier”.

For the first course of action, the Commission’s staff does not believe current laws adequately accommodate the current range of DERs. They argue this is a barrier to modernizing our electric grid and accomplishing ongoing clean energy initiatives within the District. The report’s first policy recommendation is to amend Title 15 of the D.C. Municipal Regulations (DCMR) through notice and comment rulemaking to better define five new categories of distributed energy resources. These are distributed generation (like rooftop solar panels), energy storage, energy efficiency, demand response, and microgrids. The staff’s goal is that these definitions will provide enough regulatory clarity so that stakeholders can better use these existing DER technologies, while also being flexible enough to accommodate future DER technologies in the absence of additional legislation.

In addition to defining what DERs are, the Commission’s staff also recommends ways to speed their adoption. It recommends the Commission adopt a new standard for renewable energy projects to speed their completion. In the absence of a filed objection, applicants who can demonstrate their proposed renewable energy project complies with existing zoning and environmental laws, is “relatively small and unobtrusive, and is in the public interest should be approved within 20 days.”

The report finds that rules for adopting larger (over 10 MW) microgrids and energy storage are lacking. The staff recommends the Commission consider streamlining these rules and procedures for interconnecting DERs under to allow the deployment of smart inverters and “islanding” standards for distributed generation, as well as considering the creation of a new separate category of interconnection policies for microgrids. Finally, the staff also noted that the Commission will need to consider potential penalties for Pepco, in the case that there are not improvements in the utility’s current interconnection efforts.

The commission also recommends streamlining regulations by altering the definition of what is an “Electrical Company”. The report suggests it be modified to expressly exclude any person or entity that distributes electricity from a behind-the-meter generator and then sells that electricity to a single retail customer behind the same meter. The staff argues for this change because current law makes small-scale generators subject to a number of Commission regulations that were designed to regulate Pepco.

The report also recommends amending the definition of an electric supplier. Under current law, no person can construct electric generating facilities for either retail or wholesale without Commission approval (DC Code 34-1516). This definition was developed before the advent of DER technologies. The staff believes that the definition of “sale” should be modified to facilitate the adoption of smart grid and DER technology. To address this issue, the staff presents two policy alternatives:

• amend the regulatory definitions of “electricity supplier,” “broker,” and “marketer” to clarify what types of sales are covered by the Commission’s regulations.
• amend the definition of “electricity supplier” to exclude any person or entity who owns a behind-the-meter generator who sells that electricity to retail customers behind the same meter.

The PSC is in the process of setting up a public community forum at the end of February so that they can better explain the report and so the public can have a chance to give feedback on the report. DC SUN plans to attend and would like for our supporters to participate in this process as well. We will send out more details soon.