This week, Landis+Gyr joined regulators and industry leaders in La Quinta, California for the 128th National Association of Regulatory Utility Commissioners (NARUC) Annual Meeting. Active conversations and robust debates about how best to regulate an evolving industry were abound. Here are a few key takeaways:
1. Political Uncertainty Won’t Slow Industry Innovation—Taking place just a few days after the presidential election, there was much speculation on how the new administration’s decisions and governance style would impact the utility industry. While specific legislative or federal mandates may lessen, commissioners viewed the recent election as an opportunity for states to take the lead in driving energy policy, and how market forces and long-term utility investment cycles will drive the industry, more so than the policies of any individual administration.
2. Cloud-Based Software—At the meeting, NARUC passed a resolution recognizing the value of cloud-based software solutions, and asking commissions to treat them similarly to utility-licensed computing hardware for accounting purposes (capitalize cloud-based software). This resolution shows a shift in thinking toward allowing utilities to capitalize investments in licensed software and hosted solutions. In the words of one commissioner “It is no longer prudent for utilities build the IT infrastructure necessary for hosting their own software solutions.”
3. Technology With a Little Help From Our Friends—The Annual Meeting’s collection of regulators from across the country all under one roof, proved a fertile if unscientific testing bed for regulatory views on the role of technology and expected rates of adoption. Collectively, regulators showed an active willingness to better understand how new smart grid technologies can provide a more reliable and efficient power delivery system for consumers. The key here was a need, and opportunity for utilities and technology providers to better educate all stakeholders: consumer advocates, legislators, and regulators themselves on trends and emerging technologies.
Valuing Distributed Resources—NARUC released its Ratemaking for Distributed Energy Resource manual, which was approved in committee meetings this week, and now serves as a final guide for regulators across the country to evaluate new rate trends (modified net metering, demand charges, locational pricing for DERs, among others). Regulators now have a framework for which to begin considering new policies for how to better address the influx of renewables on to the grid.