AEE, NECEC applaud Rhode Island grid modernization initiative

It may be the nation’s smallest state, but Rhode Island is taking steps to keep pace with larger states such as California and New York in looking to redesign its electric system to integrate more renewables and behind-the-meter resources.

On May 2, Rhode Island Governor Gina Raimondo ordered three state agencies to work together on the creation of a “more dynamic regulatory framework” to enable the move to a “cleaner, more affordable and more reliable energy system for the 21st century and beyond”.

The goals of the Power System Transformation (PST) Initiative are to integrated more renewable energy, to give customers more choice over their energy use, and to increase system efficiency to control costs. The effort will build on Raimondo’s plans for Rhode Island to procure an additional 1 GW of clean energy resources, and the commissioning of the nation’s first offshore wind farm last fall.

To follow on this, on Wednesday Advanced Energy Economy (AEE) Institute and Northeast Clean Energy Council (NECEC) shared comments that they recently filed on the PST, in which they call for a different role for utilities. AEE Institute and NECEC state that utilities should operate the grid as a physical and market platform, integrating and coordinating assets and services owned by third parties and customers, and should only own assets that are by their nature a natural monopoly.

This would involve a shift in the way that utilities are compensated, away from the model of earning a return on deploying infrastructure and towards compensation based on performance and outcomes, and to earn the same return on procured services as on capital investments.

While elements of this shift are part of the move to integrated resource planning, the changed role for utilities that AEE Institute and NECEC are proposing is more like the change that New York is pushing under its Reforming the Energy Vision (REV) process. REV has been the most ambitious state-level redesign of the electricity system attempted in recent memory, and Rhode Island is showing that other states may follow suit.

An initial draft proposal will be presented under the PST process this summer.