Modernizing America’s Electricity Infrastructure

Mason Willrich

How we started using

electricity

How our society uses

electricity today

How we will use electricity

in the future

Why a National Strategy?

• Much of America’s infrastructure is aging and, sooner rather than

later, will require replacement or renewal

• Two major threats:

▪ Climate change

▪ Cyber attacks

• The work of transforming America’s electricity infrastructure

will extend over at least two decades and involve investing trillions

of dollars

The structure of the electric grid

Publicly Owned

Utilities

(2,006)

59.5%

Investor-Owned

Utilities

(185)

5.5%

Cooperatives

(875)

26.0%

Federal Power

Agencies

(9)

0.3%

Power Marketers

(296)

8.7%

Number of Electricity Providers

Electricity Providers by Customers

Publicly Owned

Utilities

14.6%

Investor-Owned

Utilities

68.1%

Cooperatives

12.9%

Power Marketers

4.4%

Generation Ownership

Independent

Power

Producers

43%

Investor-Owned

Utilities

36%

Publicly Owned

Utilities

10%

Cooperatives

5%

Federal Power

Agencies

6%

Actual Generation by Fuel Type

Natural Gas

33.00%

Coal

33.00%

Nuclear

20.00%Hydro

6.00%

Wind, Solar,

Biomass

7.00%

Other

1.00%

Electricity

30%

Transportation

28%

Industry

21%Commercial &

Residential

12%

Agriculture

9%

Total U.S. Greenhouse Gas Emissions by Economic Sector

U.S. Environmental Protection Agency (2017). Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2015

Carbon Dioxide Emissions for the Electricity Sector, by Source

EIA Monthly Energy Review, July 2017

Coal 68.2%

Natural Gas 30%

Distillate Fuels

0.20%

Petroleum 1.20%

Non-Biomass

Waste 0.60%

Other Public

Power

7%

Investor-Owned Utilities

66%

Cooperatives

6%

Federal Power

Agencies

14%

Independent

Transmission

Operators

4%

NA

3%

Transmission Grid Ownership

WAUW

HQT

IESO

NSPINBPC

ISNE

NYIS

LGEE

OVECMISO

SWPP

SPC

AECI

MHEB

SPA

EEI

TVA

SOCO

AEC

CPLECPLW DUK

YAD

SCEG

SC

TALGVL

JEA

NSBSEC

TEC

FPC

FPL

FMPP

HST

BCHA

NWMTWWA

GWA

WACM

PSCO

PNM

EPE

AESO

IPCO

PACE

PACW

PGE

SCL

TPWR

DOPD

GCPD

CHPDBPAT

AVA

CSTO

PSEI

BANC

CISO

TID

LDWP

IID

CFE

NEVP

WALC GRIF

AZPSDEAA

HGMAGRMA

SRP

TEPC

PJM

SPC

ONT

NBPC

TE

ERCOT ERCO

ISNENYIS

PJM

MISOPEAK

AESO

SPP

TVA

FRCC

SEPA

SOCO

VACAR-S

Created using Ventyx Velocity Suite,© 2016 Ventyx, an ABBCompany

NERC Balancing AuthoritiesAs of October 1, 2015

Dynamically controlled generation

Back-to-Back DC Converter

Submit changes to balancing@nerc.com

Federal State Local

Electric Industry Structure

Reliability Standards

Whole Rate Design

Resource Adequacy

Retail Rate Design

Resource Mix

Transmission Cost Recovery

Transmission Siting

Interoperability & Cybersecurity

Renewables & Demand Response

Energy Efficiency

Electric Industry Policy Oversight

Renewable Portfolio Standard Policieswww.dsireusa.org / February 2017

WA: 15% x 2020*

OR: 50%x 2040* (large utilities)

CA: 50%

x 2030

MT: 15% x 2015

NV: 25% x

2025* UT: 20% x

2025*†

AZ: 15% x

2025*

ND: 10% x 2015

NM: 20%ax 2020

(IOUs)

HI: 100% x 2045

CO: 30% by 2020

(IOUs) *†

OK: 15% x

2015

MN:26.5%

x 2025 (IOUs)31.5% x 2020 (Xcel)

MI: 15% x

2021*†

WI: 10%

2015

MO:15% x

2021

IA: 105 MWIN:

10% x

2025†IL: 25%

x 2026

OH: 12.5%

x 2026

NC: 12.5% x 2021 (IOUs)

VA: 15%

x 2025†KS: 20% x 2020

ME: 40% x 2017

29 States + Washington

DC + 3 territories have a

Renewable Portfolio

Standard (8 states and 1 territories have

renewable portfolio goals)Renewable portfolio standard

Renewable portfolio goal Includes non-renewable alternative resources* Extra credit for solar or customer-sited renewables

†

U.S. Territories

DC

TX: 5,880 MW x 2015*

SD: 10% x 2015

SC: 2% 2021

NMI: 20% x 2016

PR: 20% x 2035

Guam: 25% x 2035

USVI: 30% x 2025

NH: 24.8 x 2025

VT: 75% x 2032

MA: 15% x 2020(new resources)

6.03% x 2016 (existing resources)

RI: 38.5% x 2035

CT: 27% x 2020

NY:50% x 2030

PA: 18% x 2021†

NJ: 20.38% RE x 2020 + 4.1% solar by 2027

DE: 25% x 2026*

MD: 25% x 2020

DC: 50% x 2032

Why a National Strategy?

• Much of America’s infrastructure is aging and, sooner rather than

later, will require replacement or renewal

• Two major threats:

▪ Climate change

▪ Cyber attacks

• The work of transforming America’s electricity infrastructure

will extend over at least two decades and involve investing trillions

of dollars

Reliable &

Resilient

Environmentally

Sustainable

Interoperable

& Secure

Affordable &

FinanceableGovernance

How should we think about a national strategy?

• In years past, the order of presentation and discussion would have been from

supply to demand—GTDR to consumers. Grounding a strategy in the

present, it is preferable to reverse the order of discussion by starting with

consumers, progressing through distribution and transmission, to generation.

• Change must occur incrementally in order to avoid disruptions to continuous

electric service for America’s economy and society.

• Collaboration will be required among a diverse set of business, labor,

consumer, and environmental stakeholders in furtherance of common

interests.

Retail Consumers

• Existing buildings and facilities should be retrofitted with all energy efficiency

improvements that are cost effective. New construction should comply with

all state and federal energy efficiency and environmental

standards.

• Should IOU retail electricity markets be closed or open to competition from

private suppliers?

• Should states generally adopt legislation that enables Community Choice

Aggregation as an alternative for local public power takeovers of IOU retail

service territories?

Distribution

• State PUCs should adopt time-varying pricing for electric service; decouple

utility-authorized revenues from sales; and align a utility’s performance with

its customers’ preferences.

• States should adopt legislation for utilities to develop and implement

Distribution Resource Plans that provide cost transparency about existing

and planned operations of their distribution networks.

• Distribution planning and transmission planning should be fully coordinated,

so distribution and transmission systems will operate seamlessly.

Distributed Energy Resources

• A driving force of electric infrastructure modernization is the incorporation

of distributed energy resources—energy efficiency, demand response (DR),

solar, cogeneration, energy storage—DERs.

• Utilities should serve as platforms to enable the integration of DERs into

their distribution networks and to coordinate the operations of DRs within

overall distribution-system operations.

• DERs deployed within utility distribution networks should be optimally

located and mainly procured by contracts between utilities and independent

firms. While DERs on consumers’ premises should be provided mainly by

independent firms.

Transmission

• Additions to high-voltage transmission networks should be sited, developed,

financed, and operated optimally pursuant to regional plans covering large

multistate regions within the Western and Eastern Interconnections.

• All utilities—IOU and POU—should publish and update periodically long-

term resource plans covering generation, transmission, distribution, and

retail service.

• Congress should enact legislation that clarifies FERC’s eminent domain

authority related to the establishment of national transmission corridors.

• The number of balancing authorities should be reduced by expanding

ISO/RTO footprints, especially in the Western Interconnection.

Wholesale Markets

• Wind, solar, and demand response should receive adequate

compensation from a well-functioning wholesale energy and ancillary

services market.

• Energy storage should be eligible for capacity payments since it stands

ready and should be available when called upon.

• For electric utilities that participate in an RTO/ISO wholesale power

market, the utility should perform enhanced functions to operate its

distribution system in a more complex environment as DSO.

Generation

• IPPs should avoid excessive leverage and overly complex deal structures as

they seek financing to build portfolios of long-lived project assets.

• Rather than continuing the DOE Clean Coal Power Initiative, the DOE and its

counterpart in China should co-lead the establishment of a multinational

Clean Coal Power Initiative for a series of carbon capture and sequestration

projects.

• The DOE should collaborate with the nuclear industry in sponsoring a major

program for research, development, and commercial demonstration of a

variety of small modular nuclear reactor designs.

Cybersecurity

• Interoperability and cybersecurity need to be recognized as intertwined

issues.

• Existing federal cybersecurity standards for the bulk power grid need to be

expanded to include distribution networks.

• President Trump should work with Congress to develop legislation that will

establish mandatory open source interoperability standards and

cybersecurity standards that will be applicable throughout America’s electric

infrastructure including distribution networks.

Thank you!

Hardcover | $25.00 Short | £19.95 | 320 pp. | 6 x 9 in

| 16 figures | October 2017 | ISBN: 9780262036795

eBook | $18.00 Short | October 2017 | ISBN:

9780262342391

For more information, find my book through

the MIT Press or Amazon.