The electric grid is the foundation for the transition to clean energy. Yet ensuring utilities are properly rewarded for helping to facilitate that transition has been virtually ignored. Only in Washington can such a disconnect occur. That’s because Washington’s incentives (being re-elected) are disconnected with what’s good for the country.
The good news is that four members of Congress are finally getting around to encouraging the Federal Energy Regulatory Commission to begin aligning things. Through the Advancing GETs Act, they want FERC to adopt a “shared incentives” model that would help facilitate the use of grid-enhancing technologies or GETs, to squeeze more from our existing infrastructure.
What a novel idea.
GETs include things like dynamic line ratings, advanced power flow controls and topology optimization. I know, that’s all Greek to the average person including me. The bottom line is that these technologies are a less expensive and a quicker way to boost existing grid capacity.
How much more?
RMI recently released a study that indicated GETs installed in five states located in PJM’s service territory would allow 6.6 gigawatts of clean energy to connect to the grid today. It would also save consumers and estimated $1 billion a year in reduced generation costs.
And why hasn’t this been done sooner?
I don’t blame the utilities for not taking the initiative. Their primary objective is to keep the lights on. The safest way to accomplish that is to avoid risk. So why innovate?
Changing the way utilities are incentivized will provide the necessary motivation for them to begin to adopt new technologies in a way that doesn’t jeopardize their first priority. FERC actually proposed incentives that would provide higher returns on equity for GETs projects back in March of 2020. That obviously didn’t go anywhere. Now lawmakers are proposing a structure that would allow owners and consumers to share in the benefits.
“Because the vast majority of utilities in the United States earn a fixed rate of return on their capital investments, they are not incentivized to implement solutions which will save them, and ultimately ratepayers, money,” the lawmakers said. “A well-implemented shared saving system would fix this problem.”
Downright revolutionary, don’t you think?
We’ll see if it finally gains traction this time.
#electricgrid #ferc #federalregulatoryenergycommission #grid #pjm #rmi