Case study: Future utility planning must account for consumers’ thirst for distributed energy

Consumers are driving the distributed energy revolution – and it’s incumbent on utilities to integrate that reality into their future plans.

So says a case study prepared by the Smart Electric Power Alliance (SEPA) and Black & Veatch, which chronicles the Sacramento Municipal Utility District’s (SMUD) efforts to create a planning process to do just that.

SMUD studied the patterns of its customers in adopting technologies like solar, storage and electric vehicles, giving them the ability to predict which neighborhoods will see higher levels of these technologies. Using those predictions, SMUD will be able to plan more effectively for where to invest in system upgrades, as well as providing a fuller understanding of how distributed energy will affect their revenues.

“With this study, SMUD has become an industry leader, providing insights and models that others can follow,” said Julia Hamm, president and CEO of SEPA. “We believe that integrating distributed energy into regular utility resource planning, as SMUD is doing, will quickly become an industry best practice.”

Other key takeaways from the report include:

• Customers lead distributed energy adoption: SMUD discovered its ratepayers, along with third-party developers, now spend far more than it does on distributed energy (approximately $150 million to $200 million per year).
• Distributed energy effects must be looked at individually and in aggregate: For example, while the impact of solar alone can increase ramping requirements, the distributed energy portfolio simulated in the SMUD study actually decreased ramping and flattened the utility’s net load profile.
• Savings may not offset costs under today’s policies: The study shows that under its current rate structure, SMUD’s lost money, and program costs for most  distributed technologies will be larger than its cost savings on the bulk system. As a result, SMUD must consider changes to rates and business models.