Faced with aging assets, rising operating costs, growing regulatory risks, and flat demand growth, utilities are challenged to remain competitive in an evolving energy market. The answer might be...
Making Peace With Solar
Electric executives open up on what they’re planning next.
This past February, at the 2014 Infocast Solar Power Finance & Investment Summit, I interviewed three electric power executives about their companies' investments in solar and what they think their industry will look like in 20 years. The conversation produced some interesting insights into why they've invested in solar, how they decide where to invest, how the regulatory system might change to allow increased competition, and how they're planning to deal with increased penetration of DG solar in the long run. (Full disclosure: My company, Clean Power Finance (CPF), works with all three companies represented on the panel. None of the questions was specifically about their work with CPF.)
The three power industry panelists were Oded Rhone, a vice president with the strategic planning group at of Edison International, Gary Courts, a managing director of alternative energy at Dominion Resources, and Dan Smies, manager of development for new energy assets at Integrys Energy Services.
Edison (EIX) is the parent of SoCal Edison (a regulated utility), which maintains one of the highest penetrations of residential solar in the country. In addition, EIX owns several other competitive businesses, including a solar energy company active in the distributed generation sector called SoCore Energy, which Edison acquired in 2013. SoCore provides commercial energy solutions to multisite retailers, REITs, and large-scale industrial properties.
Dominion Resources, is the parent company of regulated utilities such as Dominion Virginia Power and Dominion North Carolina Power. Dominion also owns electric transmission and natural gas transmission & distribution (T&D) companies, among other subsidiaries. Dominion has invested in third-party owned residential solar assets outside its regulated territories, and also operates programs pioneering in-territory commercial solar.
Integrys Energy Services is a wholly-owned subsidiary of Integrys Energy Group (TEG). Integrys owns six regulated utility companies in the Midwest; Integrys Energy Services serves load in competitive markets with natural gas, biogas and solar electric power. Integrys Energy Services owns 100MW of generation assets, including 55MW of distributed solar resources in six states.
We began the conversation with a quick recap from each panelist of his company's experience with solar to date.
Kristian Hanelt, CPF (for Fortnightly): Gary, Dominion recently announced it's divesting its retail business and that it plans to double down on solar with a 250MW development target by 2016. How is Dominion approaching solar and why the aggressive target?
Gary Courts, Dominion: Dominion is getting out of the electric portion of the retail business. And although we only recently announced the 250-MW target, we've actually been looking at increasing solar investments for a long time. We've found some excellent projects, mostly large, utility-scale. Dominion is pursuing solar in our unregulated generation development segment of the business because we believe there are solid returns there - we've actually invested in owning residential solar systems through the platform offered by Clean Power Finance. In our regulated territory in Virginia we're putting 30MW of solar on rooftops and renting those rooftops