Utility Innovation

In Acadia Center’s vision of a modern grid, homes and businesses are the centerpiece of the energy system. Consumers have greater control over their energy use through technologies such as rooftop solar, community energy systems, advanced meters to control and monitor power usage, and technologies such as smart appliances, localized energy storage, and heat pumps. Acadia Center’s UtilityVision presents this comprehensive vision and lays out a plan to better align utility decision-making with policy and societal goals. Acadia Center works at the state and regional level to make this vision a reality, pushing for regulatory and statutory change to enable better decisions, a more resilient grid, and more participation from voices that are routinely shut out of energy decision-making.

Building a modern, consumer-oriented energy grid

While consumer-oriented technology has raced forward in recent years, the energy grid that underpins the Northeast’s economy has not. The aging infrastructure, the regulatory structure that governs utilities, the planning and investment policies, and the focus on increasing supply-side resources (rather than decreasing demand) all date from an era when energy came only from large fossil-fueled power plants, and customers had little choice about their energy. But with the right reforms, investments, upgrades, and focus on the needs of people and the environment, the energy grid can transform from last century’s leftovers to the resilient backbone of the modern, electrified, and low-carbon economy.

Yet a major obstacle stands in the way: utility business models are increasingly incompatible with climate and clean energy goals.

With traditional cost-of-service regulation, utilities recoup their expenses and earn a return based on spending more capital. However, this incentivizes utilities to invest in large infrastructure projects, rather than in energy efficiency, clean energy resources, and third-party ownership structures that could save consumers money. These traditional incentives do not motivate utilities to be full partners in the effort to transform the energy system to meet state climate targets. Acadia Center is working to remove these barriers and reimagine a modern utility system that is responsive to climate and consumer needs.

One indicator of Acadia Center’s success in this area is the proliferation of state regulatory proceedings addressing portions of the issues that Acadia Center has raised, which include: grid modernization, non-wires alternatives, transparency in integration of distributed energy resources, utility business model reforms, distribution system planning reforms, and even fossil gas distribution system planning reforms and efforts to rethink the future of the gas utility business model. Acadia Center is an active participant in these proceedings, and, when states are not moving quickly or comprehensively enough, creating thought leadership documents to raise the profile of these issues.

Acadia Center’s priorities include:

• Intervening in targeted regulatory proceedings where our voice can have the most impact. Many of the most important decisions guiding the actions that utilities take to meet energy demand and plan for the future are made at public utility commissions (PUCs). Acadia Center provides expert testimony and analysis to inform the decisions that regulators make to ensure that they protect ratepayers and help to meet state climate and clean energy goals.
• Creating coalitions to support legislation for reforming agency mandates and missions, especially at public utility commissions, to put climate and equity front and center, and ensure that all agencies are committed to helping the states reach their emissions reduction targets.
• Raising awareness through media, blogs, and outreach to other organizations about how the outdated business models and incentives which pay utilities to build and own more infrastructure work against clean energy, climate goals, and ratepayer interests.
• Harnessing the utility profit motive to drive environmental benefits by letting utilities earn returns when they achieve performance incentive targets (rather than simply building more infrastructure), as well as allowing investment where it supports the environment, such as “make-ready” electric vehicle charging infrastructure that can jump-start states’ electric vehicle commitments.
• Advocating for consumer control of their energy through reforms to rate design that keep fixed charges low, reflect the real cost drivers of energy, pay consumers the right value for generating renewable energy, and empower people to save money and protect the grid by conserving energy when it matters most.
• Advocating for responsive and flexible demand through the use of time-varying rates and other price signals, energy storage, active demand management, and lighting with controls, as well as strategic efforts to charge electric vehicles and run heat pumps at the right times of day when renewable energy is most plentiful. Advanced technologies and controls can enable better optimization of the electric grid, reducing both costs and emissions.