Accelerator Teams Are Defining a New Era of Utility Relationships
Attendees at Accelerator 2016
In April 2016, RMI hosted the third annual eLab Accelerator. (Applications are now being accepted for eLab Accelerator 2017.) Described as a boot camp for electricity innovation, the four-day intensive work session brought together 13 teams from across North America—from North Carolina to Ottawa and California to New York—working on new business models, energy innovation districts, and novel ways to value distributed energy resources. Together with RMI facilitators, Reos Partners, and a panel of expert faculty, they sped progress on their respective efforts. This article describes one of the themes that emerged from the event.
Evolutions in both technology and customer needs are creating opportunities for utilities to establish new collaborative working relationships—an opportunity that many utilities are seizing. This level of collaboration is a departure from the norm. Historically, utilities have not been known for their innovative customer engagement or collaborative approaches with key stakeholders and communities. This isn’t an indictment of utility values; it’s simply a reflection of the structures (e.g., a natural monopoly), the regulations (e.g., the inherently adversarial rate-case format), and the expectations (e.g., customers’ indifference to how power is generated and delivered) that utilities have operated within the past.
This trend is beginning to change, as was more evident than ever at RMI’s third-annual Electricity Innovation Lab (eLab) Accelerator, convened in April 2016. Accelerator 2016 featured 13 projects working on a variety of topics, including electric vehicles, new utility business models, microgrids, and pilot projects. Ten of these multi-stakeholder teams had members from their local utility involved in the collaboration. In fact, utilities have been instrumental in advancing some of the most cutting-edge projects to date. Here are some of the bold new collaborations that utilities are helping create as the electricity system transitions to one that is more distributed, more reliable, and more renewable.
Collaborating to Create a Resilient Microgrid in a Dense Urban Core
In 2014, the City of Berkeley was selected as one of the first cities to participate in the Rockefeller Foundation’s 100 Resilient Cities, and has since developed a resilience strategy focused on advanced preparedness and equity. Berkeley’s Accelerator 2016 Microgrid Resiliency Project aims to support this strategy by developing a multi-technology, multi-facility, microgrid pilot—establishing a scalable and replicable model to improve access to clean energy in an urban context and to support community resilience.
“Urban resilience is a priority of the City,” shared Katie Van Dyke, climate action program manager for the City of Berkeley and team champion for the Accelerator 2016 team. “In the Bay Area it is a question of when, not if, a big earthquake will occur. We are trying to find more resilient solutions to prepare for the City’s most pressing challenges now.” The emerging resilience needs of the City, combined with the inherent complexity of an innovative microgrid solution, have brought the utility and the City together in new ways. “We have yet to see the spread of projects on this scale in dense urban environments,” continued Van Dyke. “There are many unknowns; in order for the project to be implemented and operational in the future, we will have to work together with many stakeholders, including utilities.”
Indeed, the evolution of the electricity grid to one that is less centralized is a key trend that many utilities are wrestling with. Microgrids are vanguards of this future in many ways, blurring traditional financial, regulatory, and technical boundaries of the current system. Projects like Berkeley’s provide utilities an opportunity to work through these challenges, while helping their communities meet ever-growing needs that demand an alternative approach from the status quo. “For this project, working with our utility [Pacific Gas & Electric] at Accelerator was a critical opportunity and experience, and has resulted in a collaborative relationship,” concluded Van Dyke. “PG&E will be participating on the project’s Steering Committee, and is seen as part of the team that can help make the project successful.”
Creating a Shared Electric-Vehicle Future Together
Con Edison, the investor-owned utility (IOU) for the greater New York City area, recently announced it would be issuing a request for information (RFI) on how to integrate the growth of electric vehicles and develop a transportation electrification demonstration project for its territory. Electric vehicles could bring additional electric sales to utilities in an era of otherwise declining electric load growth—thanks to energy efficiency. However, electric vehicles rely on inherently complex technologies that raise a number of difficult questions that can’t be adequately addressed without significant input from many types of stakeholders.
To help address these questions, the Electrifying NYC Transportation team came to Accelerator 2016 to think through how best to engage the community in Con Edison’s RFI to ensure that the transportation electrification solicitation brings forth the best ideas. “Electric vehicles in particular pose an interesting conundrum,” noted Benjamin Mandel, from the NYC Mayor’s Office of Sustainability and a member of the team. “For the last five to ten years, we have really been focused on refining incentives given through utility regulation and the traditional utility business model to make utilities at least indifferent to energy efficiency or the addition of distributed energy resources [DERs].” Mandel added, “Now we are talking about a new form of DER that can reverse the trend of declining or plateauing load and drive significant load growth.”
The introduction of disruptive technologies like electric vehicles (EVs) will cause parties to rethink and evolve traditional roles and business models. “It involves careful thought and experimentation on the part of the utilities, with their partners, to articulate the value proposition that EVs can pose,” Mandel said. “We don’t have clear answers yet, which is why it is so encouraging that we have one of the largest investor-owned utilities in the country looking to put a lot of investment into how this makes sense for them.”
Co-Piloting a Solar-Plus-Storage Program
Demonstration projects offer a particular opportunity to create significant and mutually beneficial engagements between customers and utilities. “We had [collaborative] conversations with the utility about cutting-edge ideas,” observed Betsy Kauffman, renewable energy sector lead for the Energy Trust of Oregon. Kauffman was the Accelerator 2016 team champion for the Oregon Path to Solar+Storage project, which began developing a structure for deploying customer-sited solar-plus-storage to identify its benefits, challenges, and the solutions to these challenges for customers and utilities. “This pilot project opened up working together. The idea of working on an R&D project together is a really big deal.”
A demonstration project is inherently designed to test new ideas and approaches, whether technical, financial, or regulatory. Taking a multi-stakeholder approach allows the needs of the project end-user to be directly integrated into project design, while taking into account any concerns utilities may have. Through the Accelerator process, the team (which included Portland General Electric) discovered that members had similar goals and aspirations for the future of solar-plus-storage in Oregon. That set of shared goals, and emerging solar-plus-storage technology, allowed the team to quickly craft a project to test key assumptions regarding solar-plus-storage, identify funding sources and key stakeholders, and articulate desired outcomes and metrics.
“Utilities are aware of the grid future, aware of changes, aware that things are coming,” concluded Kauffman. “[They] are much more approachable than you realize. They want to be doing these things, to move forward. [Pilot projects] can provide them the vehicle [for collaboration], a platform to begin experimenting.”
High Hopes for the Future of the Utility-Customer Relationship
The needs of utilities and customers will continue to evolve as the electricity grid seeks to meet the new and emerging circumstances of the 21st century. Innovative technology is often a bridge between these new needs and current circumstances, but can require significant consideration to find the right design and ensure effective deployment. Many utilities are taking the opportunity to interact with their stakeholders in new ways to solve these problems, resulting in more comprehensive and impactful solutions. RMI looks forward to supporting these new relationships and encouraging the emerging trend of utilities and their communities collaborating even more, as we begin the application process for Accelerator 2017.
RMI will be hosting the next Accelerator event in April of 2017. Applications are being accepted until January 13, 2017. For more information or to apply, please visit the Accelerator website.