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States across the nation continue to adopt policies aimed at decentralizing and de-carbonizing their energy systems through Renewable Portfolio Standards and Energy Efficiency Standards, as well as a multitude of other policies. Electric utilities are not only the implementers in chief of these policies, but they also face inevitable transformation if these policies succeed in allowing consumers to produce their own energy, thereby bypassing the utilities entirely. Among the drivers of change facing the nation’s electricity sector are:
A few utilities across the country, including Arizona Public Service Company (APS), Tucson Electric Power Company (TEP), Duke Energy, and Pacific Gas and Electric Company (PG & E), have embraced the implementation of these policies and have begun to consider how they can evolve over time in a way that allows them to benefit from, rather than fall victim to, creative destruction in the utility industry caused by the proliferation of distributed generation and energy efficiency.
These looming changes, and the sense that the utility of the future will by necessity be far different from the integrated monopoly utility of today, are leading many to the conclusion that utilities as well as their regulators will need to design new regulations and business models that allow the utilities to transition themselves into the Utility of the Future. Indeed, making sure that there is an orderly change-over, in which both utilities and clean energy companies and their customers can prosper through the move, is critical to ensuring a clean energy future. A few entities and organizations have begun formally looking at these questions.
The Department of Energy (DOE) has signaled in recent months its intention to take seriously the investment and regulatory questions surrounding the transition to a clean energy future by hiring new staff, attending roundtable discussions, and organizing workshops about the topic. A handful of utilities, including APS, have begun internal dialogues to discuss “deep uncertainty” scenarios revolving around a more decentralized vision of energy provisioning. The National Association of Regulatory Commissioners (NARUC) held a conference in 2009 in Dallas, Texas that asked participants to imagine what utilities will look like in ten or twenty years. NARUC has expressed an interest over the past several years in being a facilitator for this important discussion.
Kris Mayes, acting Director of the Center, will establish a Co-Director position to be selected from the utility sector. Start-up funding has been provided by ASU LightWorks toward establishing the Energy Policy Innovation Council (EPIC) at the SDO College of Law, which performs the policy outreach function of the Center. Additional funding has been provided by Duke Energy.
Private sector investors, including the nation’s investor-owned utility community, will be critical to the full establishment and long-term operation of the Center. Other potential sources of funding include:
ASU is already home to some of the nation’s top thought leaders on utilities and sustainable energy policy, including:
ASU is also home to both the world’s largest university-based solar micro-grid, with 15.3 megawatts of solar installed on its campuses to date, and Campus Metabolism™, an interactive online tool that displays campus-wide energy usage in real-time, making it an ideal physical location for the Utility of the Future Center.
The Utility of the Future Center is designed to assist utilities, regulators and consumers in making the move to a clean energy future. In an interview with Horizon’s Ted Simons, Kris Mayes talks about the Center and Arizona’s renewable energy standard.