FERC’s new rule on compensation for demand resources tips the market balance toward negawatts. Arguably the commission’s economic analysis is flawed, and the rule represents a covert policy...
2008 Regulators Forum: Putting Efficiency First
New rate structures prioritize conservation, but will customers buy it?
to look at things like interoperability of technology to make sure you’re not going to be locked into a proprietary technology that will end up reducing your options in the long run. It’s not just an up-or-down decision to pay for advanced metering or not. There’s a whole series of subsidiary decisions that need to be made along the way, and that’s really what makes it so complicated. It’s more like a jigsaw puzzle than a straight line.
Butler (N.J.): Rick has just described a large part of the agenda for the FERC-NARUC smart grid collaborative, which really is starting with AMI as a building block, with proposals or pilot programs on AMI in at least 35 of the 50 states. The discussion will revolve around how do we assure value for ratepayers? How do we assure ratepayers aren’t going to pay for a Betamax system that will be out of date and useless in five years? Anyone who wants to participate can take part in these meetings, which will take place at each of the NARUC meetings for the next couple of years. It will be announced on the website. We need all the input we can get.
One of the saving graces with this technology is there are benefits that can accrue from a smarter grid to almost every stakeholder involved. The benefits described from AMR were really for the company, for outage detection and meter reading and turning customers on and off. That’s still there, but now we’ve got a whole set of benefits that can accrue to ratepayers. Everyone’s got a dog in this fight.
Closing the Loop
Fortnightly: To what degree do commissions have a role in ensuring customers are fully educated and enabled to make use of these technologies? Is it the commission’s responsibility or the utility’s responsibility?
Ervin (N.C.): I think it’s both. We clearly have an obligation to try to educate the public better. We clearly are looking at different approaches to traditional problems and the use of new technologies and new rates. Customer acceptance of those things will be optimal only to the extent they understand those options are available and they make use of them. So therefore any of us involved in the process of trying to implement these changes and manage them to the benefit of customers needs to do what we can to educate the public.
It’s easier to say that than to do it.
Smith (Idaho): In all my years of being at the commission, one of the hardest things is getting customers interested and engaged, and getting their feedback on what utilities are proposing and what the commission should be doing. I’ve come to the conclusion that you get the customer’s attention when they open their bill. Because of the rising costs generally in the industry, they’re going to be opening some larger bills. We have an opportunity now where we will have their focus and their attention, and it behooves us and utilities to engage in all kinds of education to reach all kinds of users,