Ian Magruder is the founding executive director of Utilize Coalition, an industry-led coalition focused on enhancing grid utilization to make electricity cheaper, faster and more reliable.
Grid utilization is having a moment. Following the enactment of Virginia’s first-in-the-nation legislation in April, a flurry of red, blue and purple states have begun advancing grid utilization policy.
Lawmakers, regulators and utilities are all searching for ways to meet surging demand for electricity without saddling consumers with increased costs. Better utilization of the grid we’ve already built is a promising solution. By various measures, we currently use roughly half of the grid’s total capacity, and research indicates that a 10% increase in grid utilization could save Americans more than $100 billion over the next decade.
At a time when nearly every issue in energy has become polarized, this is one idea that both the current Secretary of Energy and the immediate previous Secretary of Energy agree on. But as policy momentum builds, one foundational question remains: how should grid utilization be measured?
This question will soon shift from hypothetical to practical. By Oct. 15, as required by the Virginia legislation, Dominion Energy and Appalachian Power must submit proposed utilization metrics to the Virginia State Corporation Commission — becoming the first utilities in America to begin this process with their regulator.
In advance of this milestone, Utilize Coalition and our members (Carrier, Google, LineVision, Renew Home, Sparkfund, SPAN, Tesla and Verrus) have released a white paper to share our perspective on this important question.
At its core, we define grid utilization as the share of deliverable energy that is actually delivered over a given period. We recommend reporting two complementary views: nominal utilization, based on a fixed reference rating, and operational utilization, based on usable capacity under defined operating and reliability conditions. Reporting both provides a transparent benchmark alongside the system context needed for planning and investment decisions.
This represents a new dimension to how we build and use the grid. Historically, we have always built the grid to peak, and for good reason. We have to ensure that we can keep power on during the hottest summer days and coldest winter mornings. And while performance at peak remains a critical metric, the conventional focus on it obscures the significant available capacity during off-peak hours. Even a decade ago, America didn’t have good flexibility tools to take advantage of this off-peak latent capacity. Now we do, and it’s time that the policies that guide the grid catch up with the technologies that serve it.
Measuring utilization can also help us make smarter planning decisions for the grid. Not only by identifying places where flexibility solutions (distributed energy resources, virtual power plants, grid-enhancing technologies, etc.) can drive value, but also where new traditional infrastructure is necessary or where new load could be accommodated without significant investments.
The objective is not utilization for utilization’s sake, but better outcomes for customers: more productive use of infrastructure, cost-effective accommodation of new demand and greater affordability. Measuring utilization can help identify those opportunities. Over time, that information can also be used to properly reward utilities for verified improvements in customer value.
Current utilization of the grid should be viewed not as a problem to bemoan, but rather as a massive opportunity to harvest. An opportunity to advance affordability and free up new capacity at a time when both are desperately needed. Aligning on a common definition of how to measure it is a critical starting point to unlock that opportunity.
