GRID TRANSFORMATION: PATHS TO THE FUTURE DIVERGE SCOTTMADDEN, INC. | 10 As distributed energy resources proliferate, different jurisdictions and utilities therein are taking different approaches to adapting the traditional regulatory construct. Laissez Faire to Radical Redesign: A Continuum of Responses Texas Maryland, New Hampshire, and Virginia 45 States* and D.C. Massachusetts LEAST CHANGE MOST CHANGE Pure Dereg Market Market Decides • Market determines products; economics is king Net Metering Pilot Programs Pay for DG • Customers get paid for net excess generation • Rates differ (full retail, avoided cost) • Alternatives (value of solar) Try Some Things… • Investigation of alternatives • Focus areas include: ›› Solar ›› Battery storage ›› Electric vehicles ›› DG Grid Modernization Upgrade for the Future • Upgrade T&D for current and future needs • Integrate distributed resources Key Questions Area Stakeholders System Planning Operations Pricing Regulatory New York, California, and Hawaii Questions • • • • • • • • • • Who gets a say? For what issues? What resources will be where, when? How do I know it will be reliable? Who operates what, where, when, and how? What’s actually out there anyway? How do we price the products we offer? What are customers willing to pay? What are the rules? How and when will they change? Revenue Generation • How does the utility make money? Customers • • • • What do they really want? What services? How much control? How much information? NOTES: *Includes 4 states with statewide DG compensation rules other than net metering. Business Model Redesign Change the Game • Distributed system operators • Expand revenue streams • Enable “transactive” marketplace