IEI event emphasizes efforts by utilities to serve diverse mix of customers
WASHINGTON — It isn’t simple for utilities in today’s transforming energy industry to meet the unique needs of individual customers, whether residential, corporate, industrial, government, military, or otherwise. But what customers want, customers should have, forcing utilities — and state regulators — to figure out the best ways to provide exemplary customer service.
For instance, customers in the 21st century have new and urgent expectations that demand a transformation of the electric grid, Robert M. Blue, a top executive with Dominion Energy, summarized in a Jan. 25 op-ed for Loudoun Now, and they want a system that increases a utility’s capabilities to harness the sun and wind to produce electricity.
At the same time, customers also want a system that offers them new tools, better data to help them manage their energy usage, advanced protections against the potentially destructive threats posed by cyberattacks, and a system that minimizes outage times and quickens restoration, Blue wrote.
“We need to help customers find all kinds of solutions, which isn’t as easy as it seems,” said Lisa Wood, vice president of customer solutions at the Edison Electric Institute and executive director of the Institute for Electric Innovation (IEI), which on March 7 hosted utility executives including Blue and energy thought leaders for its Powering the People – Spring 2018 event.
The event, “Energy Solutions for All Customers,” was held here at the Newseum, just blocks from the U.S. Capitol, and featured two panel discussions, one on the electric vehicles market and the other on how electric companies work with large customers to provide sustainable energy solutions. U.S. Rep. Yvette D. Clarke (D-NY) also attended to discuss smart cities and announce the March 13 launch of the bipartisan Congressional Smart Cities Caucus she co-chairs with U.S. Rep. Darrell Issa (R-CA).
In providing electricity for roughly 460,000 customers, or 95 percent of the residents in the State of Hawaii, the Hawaiian Electric Co., has faced many challenges transitioning from fossil fuel generation to 100 percent renewable resources, said Alan M. Oshima, president and CEO of the company, but it also has seen many benefits.
Under Oshima’s leadership, Hawaiian Electric has been nationally recognized for its progress in reorganizing processes to become customer-focused, innovative and adaptive to change. Part of the company-wide transformation initiative has involved reaching for a variety of customer-care solutions from beyond its executive board, he said. “It can’t be all top down” in finding the answers to serving an array of customers, Oshima said.
The same mindset must be used in helping giant corporate clients meet internal, stringent sustainability goals. Different customers have different needs or requirements that must align with “state regulators who don’t want us to make special deals with each one of them; so we have to be able to offer different options to different customers” that are within the parameters of varying state laws, said Blue, executive vice president and president and CEO of the Dominion Energy Power Delivery Group.
It’s a challenging task, said Blue, who runs the company’s operating segment that provides electric distribution via Dominion Energy North Carolina and Dominion Energy Virginia, and electric transmission in both of those states. But Dominion is learning to be creative, he said.
For example, Dominion Energy Virginia, operating as Virginia Electric and Power Co., has applied for State Corporation Committee (SCC) approval of special rate options for Facebook Inc. and other big electricity customers, Blue said.
Facebook is planning a one-million-square-feet, $750-million, state-of-the-art data center near Richmond, Va., a project tied to Dominion’s plan to build up to $250 million in solar power facilities across the state that could be paid for through these special proposed rate options — known as renewable facility (RF) tariffs. The Schedule RF is a voluntary tariff Dominion plans to use for Facebook and other potential customers seeking to have their electricity needs offset by renewable power sources, he said.
Facebook voluntarily would pay an additional rate for renewable energy, plus pay Dominion’s standard electric rates. Facebook’s renewable energy prices would be subject to negotiation based on the Schedule RF structure.
Being able to power its eighth monstrous data center with 100 percent renewable energy is what lured the social media titan to Virginia, where the SCC still must approve the proposed Schedule RF, and review requests by Dominion to build the solar generating facilities that will produce enough electricity to offset Facebook’s peak power demand.
The Facebook facility will have a substantial load, Blue said, so Dominion’s creative filing would offset the company’s energy consumption with renewable attributes. “We hope other large customers would want to do this, too, and we’re hoping this will help build up renewables more quickly,” he said during the IEI panel discussion.
In moving forward with state regulators on such deals, Nick Wagner, a board member with the Iowa Utilities Board, said, “Utilities should be transparent and flexible about what they’re doing and so should regulators to help customers achieve their goals.”
“I’m going to throw another shocker out there: We regulators aren’t the innovators in all of this. Tell us what might be getting done in another jurisdiction or in another state; we can learn and get other ideas percolating,” Wagner advised utilities about regulatory efforts around their renewables plans.
On that topic, Steve Chriss, director of energy and strategy analysis for Wal-Mart Stores Inc., said the mammoth corporate retailer plans by 2025 to be powered 50 percent by renewables. “It’s helpful to know a utility’s trajectory,” Chriss said, agreeing with Wagner. “The key to this whole thing is transformation of the grid and how do we push things farther down the road harder and faster.”
Electrified transport
Electric companies also are becoming integral partners in expanding electric transportation by helping to provide access to electric vehicles (EVs) to a wide variety of customers and across multiple modes of transport, said Wood, who reported that passenger EV growth increased 26 percent in 2017 and is expected to exceed one million vehicles on the road by the end of 2018.
EVs are part of the plan at Hawaiian Electric, which in the last seven years has made more than $1.5 billion in grid investments on Oahu, Maui County and Hawaii Island. For instance, there are 12 utility-owned and operated fast chargers in its service territories with more planned, among other related initiatives. And Oshima said the company plans to release an EV road map by the end of the month on an integrated plan regarding customers and what is needed from the regulatory space to make it happen.
EVs could become a larger part of utility and consumer preferences if policies allowing electric company involvement and investment in the market become more coordinated and increase customer value and access, said Mark Lantrip, president and CEO of Southern Company Services Inc., a division of Atlanta-headquartered Southern Company, a gas and electric utility holding company.
“We’ve got to look at how we bring everybody along so that regulators will bring along the entire United States,” Lantrip suggested.
Norman Saari, a commissioner at the Michigan Public Service Commission, thinks it’s important for regulators to focus on not what’s going to sell more EVs, but if more are sold and operating, issues such as where will EVs be able to plug in, how much electricity will be available and when, what will customers be charged, how will rates be set, etc. “So, what is the framework for making good regulatory policy?” Saari said.
Saari suggested that an EV regulatory policy focus on four areas: customer education, rate design, impact on the electric grid, and most importantly, where is the infrastructure coming from — who is building what, where is it coming from, how much will it cost, etc.
“The world has spoken and EVs are here to stay,” said Saari. “Utilities can decide, ‘I’m going to be a partner and help figure out solutions,’ or they can choose otherwise. There are a lot of issues that still have to be resolved.”
