A recent New York Times article claims that states with deregulated – or, more accurately, “reorganized” – electricity markets have disproportionately higher prices compared to regulated states. However, research examining changes in consumer electricity prices over time in reorganized and regulated states shows this isn’t true.  

Times reporter Ivan Penn overlooks the fact that transmission remains under the jurisdiction of traditionally regulated investor-owned utilities – even in reorganized states.

As a Pacific Research Institute’s paper in 2021 shows, the 14 states with the highest percentage increases in electricity prices from 1996 to 2020 were all states with traditionally regulated electric markets, while four of the five states with the lowest percentage increases were reorganized states. 

It is also shortsighted to only look at the consumer price changes over the past three years due to the abnormal circumstances affecting energy markets, including the pandemic, the Russia - Ukraine situation, and the impacts those events have had on supply chains, manufacturing, labor costs and availability, and the like.

In a unanimous vote by the state’s Public Utilities Commission (PUC) last month, the State of California abruptly reduced incentive payments for rooftop solar power. The state’s solar incentives program, which led to solar panels on the roofs of 1.5 million homes and businesses, had put California front and center of the energy transition.

Now, three groups are pushing the California PUC to reverse that decision. The Protect Our Communities Foundation, the Environmental Working Group, and the Center for Biological Diversity filed an application for a rehearing to reverse the ruling on January 18, citing a section of the Public Utilities Code instructing the Commission to ensure “that customer-sited renewable distributed generation continues to grow sustainably and include specific alternatives designed for growth among residential customers in disadvantaged communities.”

Economist Lynne Kiesling has launched a new Substack version of Knowledge Problem, the blog on economics, electricity, technology, regulation, and how they interrelate that she shared with economist Michael Giberson. The original KP blog is archived and available for search.

In her first Substack post, Kiesling takes aim at the New York Times article by Ivan Penn Why Are Energy Prices So High? Some Experts Blame Deregulation. Kiesling singles out three problems with Penn’s analysis: his definition and use of "deregulation," his use of California as an illustration when it is an outlier, and his confusing conflation of retail and wholesale liberalization in a vertically-integrated industry.

Kiesling’s full analysis is worth your time, so check out Knowledge Problem on Substack and subscribe.

The California Public Utilities Commission approved a proposal to reduce the rate homeowners are paid for providing power to the electricity grid from their rooftop solar panels. The move undercuts California’s efforts to reduce carbon emissions to address climate change. 

The change to California’s net metering rule comes as Gov. Gavin Newsom eyes a run for the Democratic nomination for president. By throwing more than 1.5 million homeowners, business owners, and other electricity consumers in California with rooftop solar under the bus, the presidential hopeful may be prioritizing the national political clout of Big Utilities. 

He’s clearly not prioritizing California’s plan to achieve an 85% reduction in carbon emissions by 2045. 

The New York ISO’s recently proposed limitation on the use of distributed energy resources (DERs) to compete on its wholesale power markets is raising the ire of retail suppliers and clean efficiency advocates who argue the plan’s “minimum capability requirement” for DERs violates the Federal Energy Regulatory Commission’s Order 2222.

The proposed limitation — which was not mentioned in NYISO’s 2019 DER and Aggregation participation model accepted by FERC in January 2020, or in its Order 2222 compliance filing — would exclude all DERs that generate less than 10 kW of power from participating in DER aggregations, and from competing in the independent system operator’s (ISO) wholesale markets. NYISO argues that the requirement is needed to reduce the amount of DER reliability inspections that it must conduct, given the ISO’s limited manpower.

But NYISO’s proposal undercuts the central purpose of FERC’s Order 2222 — i.e., to allow small-scale DERs to participate through aggregation with large energy generation facilities in wholesale markets.

Christopher Ercoli, president of the Retail Energy Advancement League (REAL) wrote about the benefits of energy choice for Virginia consumers in the Virginia Pilot last week.

Last month, Gov. Glenn Youngkin released his energy plan, which calls for more choice and competition in how Virginians get their energy. A critical part is opening access to retail energy providers, which would provide relief to consumers looking for more affordable, cleaner and reliable electricity. This would be an important step toward creating long-overdue competition in the commonwealth’s energy market and breaking the local utilities’ long-held monopolies.

Currently, residents and businesses don’t have much choice in who supplies their electricity. The state allows only two utilities — Dominion Energy and Appalachian Power — to deliver electricity to more than 90% of Virginians. This outdated model made sense a century ago when the electricity industry was new and the government wanted to ensure its viability. Today, given the innovative technologies and services now available from other companies as well as rapidly changing consumer demands, the current system is not only outdated, it’s unsuited to Virginia’s current and future energy needs.

The biggest solar market in the country is once again attacking solar customers by trying to reduce payments to homes and businesses that supply clean electricity from rooftop solar to the power grid.

The California Public Utilities Commission’s (CPUC) latest proposal tries to smooth the uproar over the state’s previous attempts to gut solar incentives, but continues to fall short of what’s needed to support a robust solar industry.

The plan calls for a 75% reduction in the credit that new customers would get for exporting excess power to the grid, according to the California Solar & Storage Association (CSSA).

The proposal is sure to spark debate between rooftop solar installers, monopoly utilities, and labor unions as California seeks to transition to 100% clean energy by 2045.

Increased competition in electricity markets is one reform that’s overdue. Allowing consumers to choose their energy supplier, including self-generation with rooftop solar and storage, would help insulate them from the current energy crisis impacting their monthly utility bills.

The CEN survey found that 87% of respondents support increased competition in the electricity markets, with 59% strongly in favor of more competition. A similar number (84%) agreed with the statement that “we should accelerate the growth of clean energy so that our state can be a national leader in the competition for economic development and good-paying jobs.”

Two-thirds of voters who responded to the CEN poll agreed that America can create a new electricity system that benefits the environment, accelerates the availability of new technology, and creates more choices by opening up markets to competition, giving consumers more choices instead of just their monopoly utility. Only 24% said they prefer the current monopoly system.

John Fitzgerald Weaver writes in PV Magazine that Sunnova is pushing back against a motion by major utility companies to dismiss its groundbreaking community microgrid proposal in California.

In September, Sunnova submitted a proposal to the California Public Utilities Commission (CPUC), requesting that its newly formed subsidiary, Sunnova Community Microgrids California (SCMC), fully own and operate microgrids of 500 to 2,000 new homes in the California market.

All three of California’s large, for-profit utilities oppose the proposal. The Public Advocate’s Office of California has suggested the proposal be dismissed, as the group would like to complete its own microgrid standards development.

The proposal is partially based upon the definition of an “electric microutility,” as per Section 2780 of California’s Public Utility Code, which defines a microutiliy as: Any electrical corporation that is regulated by the commission and organized for the purpose of providing sole-source renewable and stand-by generation, distribution, and sale of electricity exclusively to a customer base of fewer than 2,000 customers.”

To microgrid or not to microgrid – that is the question coming out of California with Sunnova Energy’s proposal to turn new neighborhoods into self-contained “microutilities” with solar generation on every roof and battery storage in every garage.

The company’s proposal to the California Public Utilities Commission (CPUC) would build new communities of up to 2,000 homes with rooftop solar and battery storage that would be part of a local microgrid.

Sunnova plans to partner with real estate development companies to create microgrids in new-build neighborhoods in California that would reduce the risk of power outages by over 80 percent.

New data from the U.S. Energy Information Administration (EIA) shows that small-scale solar usage is increasing among homeowners and commercial buildings and that the lion’s share of that usage is happening in the West.

According to a recent survey, as of 2020, 3.7% of single-family homes are generating electricity from rooftop solar. In 2018 that number stood at 1.6%.

The Western region of the United States has hopped on the solar bandwagon at a higher rate than other regions, though the Northeast is not far behind. The Western region, defined by the 2202 census, includes: Montana, Wyoming, Colorado, New Mexico, Idaho, Utah, Arizona, Nevada, Washington, Oregon, California, Alaska, and Hawaii, and is home to nearly 79 million residents.

In the West, 8.9% of single-family homes use small-scale solar generation. Commercially, 3.8% of buildings have also installed solar generation.

Utility Drive reports that Sunnova Energy International is pushing back against Southern California Edison and other utilities that want the California Public Utilities Commission to dismiss the company’s proposal to build and own microgrids in new residential communities.

Sunnova argues that its application meets the CPUC’s requirements for a hearing on the proposal to create micro-utility microgrids in new master-planned residential communities.

Under Sunnova’s proposal for new communities of up to 2,000 homes, each house would have rooftop solar and battery storage and would be part of a community microgrid that would include a community-scale photovoltaic system, energy storage and emergency generation.

New research from Lawrence Berkeley National Laboratory finds that single-family homes with behind-the-meter solar-plus-energy storage systems (PVESS) could likely maintain critical loads in weather events that caused outages in traditional utility systems.

The study, Evaluating the Capabilities of Behind-the-Meter Solar-plus-Storage for Providing Backup Power during Long-Duration Power Interruptions, found that in 7 of the 10 events, the majority of homes would have been able to maintain critical loads, using a PVESS with 30kWh of storage. The analysis is the first in what will be a series of studies by Berkeley Lab, in collaboration with the National Renewable Energy Laboratory, on the use of PVESS for backup power. This initial study is intended to provide a baseline set of performance estimates and to illustrate key performance drivers.

The nonprofit Energy and Policy Institute has launched a new tracking tool exposing up to $2.4 million in spending on advertising by 14 utility front groups over the past four years on social media advertisements, many of which include targeted messaging to mislead customers on critical climate and energy concerns, including the impact of power plant retirements, the reasons behind high utility bills, and the viability of “renewable natural gas” and hydrogen.

Using data from the Meta Ad Library and existing code developed by Brown University, the Energy and Policy Institute’s tracking tool shows the specific regions that the gas and electric utility groups are targeting with the advertisements.

The following commentary originally appeared in The Washington Times.

By Todd Snitchler

This September, the California Independent System Operator (CAISO) issued flex alerts for over a week, requesting residents to severely limit their electricity use which included imposing limits on electric vehicle charging, recommending thermostat settings be set at 78 degrees or higher, and limiting the use of appliances and lighting. On September 6, the California Office of Emergency Services sent an alert to approximately 27 million cellphones throughout the state, warning “Power interruptions may occur unless you take action.” One has to ask how is the grid teetering this close to the edge in a country with the resources we have in the United States? Policy decisions at the state and federal level that are not based in reality, that’s how.

Competitive electricity markets have continuously proven their ability to deliver reliable power, while also providing that energy in a cost-effective and increasingly clean way. Advancing this market model throughout the energy transition will be key to continued economic growth and improved environmental outcomes. To maintain reliability, policymakers must level the playing field for all energy solutions and should embrace competition to drive the innovation needed to achieve government-mandated, net-zero goals.

Solar company Sunnova wants to give new homeowners an alternative to electric utilities like Pacific Gas and Electric, cracking open the door to competition with a combination of solar and batteries in a “microgrid.” The proposal would end nearly a century of guaranteed monopoly for California utilities by letting other companies not just sell power but use an alternative delivery system to the utility’s platform. Regulators shouldn’t just let them through this opening, they should take the door off its hinges.

Numerous companies and homeowners are proving the upside of broadening grid access. OhmConnect, Tesla, and other companies are providing hundreds of megawatts of electricity capacity, forestalling rolling blackouts in California. Community solar developers in Minnesota have installed over 800 megawatts of solar projects that are reducing energy bills for over 12,000 households and hundreds of businesses. More than 1 in 4 Hawaiian households have spent their own money to add electricity capacity, reducing the island state’s reliance on imported fuel oil.

Everywhere these entrepreneurs turn, however, they’re being blocked by the incumbent utility that wields its monopoly platform as a weapon. Allowing this abuse of power threatens grid reliability, affordable electricity and our democracy.

For more than a century, governments have offered electric utilities a monopoly on selling power to homes and businesses so long as they agreed to serve everybody and subject themselves to regulation.

But as homeowners have begun installing solar panels and batteries, that simple arrangement has become more complicated. That has led to fierce battles between utility companies and relatively young solar businesses that sell and install rooftop systems for use by homes and businesses.

On Thursday, one of the nation’s largest rooftop solar companies, Sunnova Energy, asked the California Public Utilities Commission to let it directly compete with investor-owned utilities to provide electricity to homes in new residential developments as a private “micro-utility” — a business model that is illegal in much of the United States.

The latest BloombergNEF analysis expects U.S. households will install a record amount of solar this year to help slash electricity bills, according to a report by Bloomberg.

Residential solar installations will increase by about 5.6 gigawatts in 2022, led by Florida, Texas, the Midwest and California, according to a BNEF report released Monday.

Higher electricity prices and tax credit extensions in the Inflation Reduction Act are fueling the rebound in residential solar adoption. Consumers are taking ownership of their own power supplies in pursuit of cleaner energy and to reduce their reliance on grids that are becoming more vulnerable to blackouts caused by extreme weather, wildfires and drought.

“Despite supply chain challenges and higher costs, 2022 will be an absolute record year for residential solar in the US,” BNEF analyst Pol Lezcano wrote.

Households will add three times more solar this year than commercial customers and will continue to take the lead through 2030, BNEF data show.

In recent years, it has become increasingly challenging to build transmission projects for various reasons, including permitting challenges, NIMBYism, disincentives to build projects between utility territories, and a lack of coordination between states. As a result, there is now more proposed generation capacity and associated projects in the interconnection queues of independent system operators than ever before. The vast majority of those are wind and solar projects, but part of the reason for the delay is insufficient transmission capacity in the areas where those projects are being proposed

Ari Peskoe, Director of the Electricity Law Initiative at Harvard Law, offers two suggestions to resolve these issues. One is to give states more authority over transmission planning and promote greater competition in transmission rather than continue to let incumbent utilities build it themselves. The second is to establish a minimum set of benefits for transmission projects to be approved rather than just a single reason. Those benefits could include reliability, emission reductions, resiliency, and greater grid flexibility.