Faced with rising competition from renewable energy, a federal mandate to slash carbon emissions and privacy concerns over the data collected by an expanding smart grid, electric power industry regulators have a lot to think about nowadays.

It's against this backdrop that Montana's Travis Kavulla took over as president of the National Association of Regulatory Utility Commissioners in November. 

EnergyBiz got on the phone with Kavulla to dive into five of the most pressing areas facing regulators.

1. On the Clean Power Plan ... 

Historically, with utilities wanting to run as reliably, cheaply and efficiently as possible, environmental concerns were externalities, Kavulla says. With the new rules, those concerns are being internalized, he says.

But utilities commissioners need to continue to insist upon a least-cost approach, Kavulla says.

That could include insisting on the least cost per ton for carbon mitigation, which would involve trading allowances where power plants that are reducing their emissions could sell emissions allowances to other plants, he says.

Under that scenario, a key question would be how to allocate those allowances, whether to allow regional or national trading, he says.

"Those questions are very much in play," he says.

2. On the climate talks in Paris ...

"Paris, despite all the fanfare, is an amalgam of aspirational goals," he says. "It has no real legal enforceability as for U.S. federal and state law."

Some people are using the Paris talks to say the CPP is insufficient and that the nation needs to invest in "deep decarbonization," he says. That might be a hard sell for utilities commissioners, he says.

Even though Kavulla says he doesn't really agree with the CPP, he acknowledges it is the law of the land, for the moment.

For the first time, it is a rule that puts a price on carbon dioxide, but that is fragmented among 49 states that have to implement their own goals, he notes. (Vermont is not included in the plan because it doesn't have fossil fuel-fired plants.)

That leaves it up to the states to knit together a plan for trading what is now a perfectly liquid commodity, he says. A national trading scheme would probably be hard to swallow for many people and would be politically contentious, he says. But a regional trading scheme could work, he says.

3. On what's pending in Congress this year ...

A bill has passed the Senate Energy and Natural Resources Committee that includes money for states to engage in grid modernization, he says.

He is interested in whether that bill will survive, what will get amended and the extent to which the legislation would help states harness the power of Big Data.

Such data could help identify points of weakness in the grid where investments are needed in a smarter way than a utility simply saying its poles are 40 years old and need to be replaced, he says.

Some issues that could be looked at would include where a line is snagging, where there are voltage stability problems and where there are physical- or cyber-security issues, he says.

4. On data privacy and the challenges posed to utilities ...

There are a number of states, such as California, that are trying to deal with that issue, he says.

Customers should be able to have claim on and use their discrete data, but researchers, utilities and grid planners should be able to use the data, too, he says.

The concern is that power companies will sell the data to third parties. Experts say investing in security tools and monitoring for compliances are musts.    

 

5. On what he hopes to accomplish in his year-long term as NARUC president ...

Kavulla wants NARUC to create a pricing manual for distributed energy resources such as roof-top solar.

Roughly, 20 states have taken action on that, creating a wealth of information, he says. 

But their approaches are all over the board and tend to represent interest groups such as the solar industry or the utility industry, he says.

He anticipates the manual will help identify categories of costs within bundled retail rates. It will also help show the value of benefits a system, such as rooftop solar, offers to the grid.

He expects a draft professional manual from NARUC out in the summer and a final manual to be available in the fall.

 

http://www.energybiz.com/article/16/01/5-questions-narucs-kavulla