Future of electricity production could be closer to home
A conversation has been sparked in Missouri about how electricity will be generated, stored and consumed in the future.
The Missouri Public Service Commission, which regulates the state’s investor-owned utilities, is looking for input on what are known as “distributed energy resources” and will hold a workshop later this month in Jefferson City. The Commission’s Staff Director Natelle Dietrich admits the term is a bit of a catch-all.
“Distributed Energy Resources are smaller energy sources, such as micro-grids, energy storage technologies, maybe small wind or solar development projects,” Dietrich said.
The term can encompass anything from batteries that store solar energy to advanced metering information that gives customers a better sense of when they’re using energy. But the biggest idea is in producing electricity closer to the consumer, creating “micro-grids” that could then be connected with a utility’s larger grid.
James Owen, the executive director of Renew Missouri, an organization pushing for more renewable energy, is glad the PSC is broaching the subject. He said distributed energy resources are a progressive concept.
“Missouri is not going to look at California and Colorado and say ‘we’re going to do that,’” he said with a laugh.
Still, he said change in the energy industry is on its way, even in Missouri. That’s because consumers are pushing for it.
“I think that’s what the marketplace is demanding,” Owen said. “You see a lot more customers saying I want to use solar; I want to be able to use wind. I want to have some more options, because I think this might be cheaper or I might have more control over this.”
St. Louis-based Ameren has more than one million customers in Missouri, and officials agree that they’re hearing more requests about renewable energy options. Steve Wills, Ameren’s director of rates and analysis, said having one customer put solar panels on their roof isn’t a problem, but as renewables scale up, it gets more complicated for the utility.
“Because the grid was really developed for one-way power flows to go from large energy centers out toward customers,” Wills said. “If one customer is doing something different that’s not very disruptive to the way the grid operates, but the more that proliferates power flows will start going in different directions than it was originally designed.”
Ameren is testing the concept of micro-grids at its Technology Application Center in Champaign, Illinois. Wills said the utility is able to use solar, wind and natural gas at the center as part of the larger grid, or at times, completely on its own.
That ability to disconnect from the larger grid could be an asset for Ameren and may help isolate issues. That includes cyber security threats or a power outage during a storm.
But all of this would need major investment, and Wills said there is a regulatory hurdle. Right now, he said, Ameren makes investments up-front and must wait nearly a year to get regulatory approval to raise rates on customers.
“If you start making large investments, those investments aren’t reflected in your rates…” he said, “and there’s an 11-month process, so you’re going to spend at least a year incurring costs that you have no opportunity to recover.”
As a result Ameren is looking for legislative reform that would allow it to raise rates as it makes investments, not after the fact.
That raises concerns at the Office of Public Counsel, which represents customers of investor-owned utilities before the Missouri Public Service Commission. Chief Economist Geoff Marke said under the current regulation Ameren has made investments in renewables, including 700-800 megawatts of wind power.
“To me that’s advancement and that’s happening in the current regulatory structure,” he said.
Marke said he thinks investments in new technology would still be made, it just might take longer to get new technologies up and and running.
“I don’t think most people would characterize Missouri a first mover and that’s not necessarily a bad thing either,” he said. “I would argue we have learned a lot by taking a more measured approach to our regulation and ratepayers as a whole have generally benefited from that approach.”
The Public Service Commission said it’s currently in the information-gathering stage with workshops on distributed energy resources scheduled for Nov. 20 and Jan. 9. Officials said those discussions could lead to new rules or policy changes down the line.
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