Quick Take: The Energy Future Coalition and the state of Maryland have released the first report from their Utility 2.0 project â€“ and it's important reading for everybody in our industry. With the possible exception of California's piecemeal mandates, it is perhaps the single most comprehensive effort to rethink the future of electric power. It encompasses virtually all the key aspects we need to consider, including:
- Customer choice
- Grid modernization
- Business model changes
- Regulatory changes
You can read a quick summary below, but I urge you to click the link to download a copy to read for yourself. How encouraging that we have finally moved from "something must be done" to "here are some specific ideas." And how encouraging that the regulatory discussion uses language such as "reward structures." As I've said many times, it's fine to have a stick on hand for utilities that misbehave. But only if you also have a carrot for those who overachieve. - By Jesse Berst
The Energy Future Coalition has delivered a "Utility 2.0 pilot proposal" to Maryland Governor Martin O'Malley. The pilot proposes to test both new technologies as well as new business models. The report recommends five key elements for inclusion:
- Aligning utility compensation with the things customers value: Five performance metrics that would be used to determine the utility's rate of return.
- An interoperable, integrated suite of smart-grid technologies: The utility would install a suite of technologies for itself and for willing customers.
- On-bill financing: Loans that provide access to up-front capital for customers who want to embrace new smart grid technologies.
- Self-healing technologies and microgrids for improved reliability: Automated sectionalizing and reclosing equipment to permit sections of the grid that lack power during an outage to be energized safely by local sources.
- Electric vehicles and smart charging: Utilities could offer financial incentives to EV owners who agree to let the utility determine when to charge.
The report rightly reminds that these elements are "like the pieces of a jigsaw puzzle; they need to be assembled to achieve a unified result." Here's hoping the Governor will decide to proceed. The learnings that would come out would be of great benefit not just to Maryland, but to the entire country.
Jesse Berst is the founder and Chief Analyst of SGN and Chairman of the Smart Cities Council, an industry coalition.
You might also want to see ...
Paradigm shift ahead! How microgrids could help change the utility business model
Smart grid challenges: Annual survey reveals a worried industry