The growing tension over how much control regulated utilities should have over distributed energy will be put to the test in a planned pilot project in PPL Corp.'s Pennsylvania service territory. The pilot would examine the value of the ability for utilities to "actively manage" customer-sited resources like rooftop solar and battery storage.
PPL reached a settlement over the project with opposing groups including the Natural Resources Defense Council NRDC), who, along with third party distributed energy resource (DER) provider Sunrun, had blasted PPL's initial 2019 proposal as potentially harmful to the growth of distributed energy. The groups submitted the new settlement to the Pennsylvania Public Utility Commission (PUC) on Oct. 5.
PPL is one of the first utilities proposing active control over DERs, and thus the case could set the tone for utilities around the country as they grapple with the flood of DERs connecting to their distribution systems and the voltage and load shape issues that come with them.
The centerpiece of the settlement is a controlled experiment conducted to answer the question: If PPL installs communication interfaces and related software that essentially allow it to remotely control the voltage of customer-owned DERs, among other uses, will the potential reliability benefits be great enough to justify the costs? Or, as parties on the other side of the settlement have suggested, is new inverter technology with autonomous features "smart" enough to handle grid reliability concerns by itself?
The three-year pilot, to start Jan. 1, 2021, under the terms of the settlement, will follow several groups of customers with DERs. One group will be subject to PPL's proposed solution where it can communicate with and control the inverters connecting the DERs to the grid. Other groups are control groups in which the inverters will function more autonomously.
Participants to the settlement hope this design will generate unprecedented amounts of data that will help energy providers and regulators figure out the best way to cope with an ever-increasing amount of distributed energy.
"I'm not aware of anyone who has gone through this real-world, side-by-side comparison," Center for Renewables Integration co-founder Harry Warren, who testified on behalf of NRDC in this case, said.
In 2017 PPL received a $3.3 million DOE grant to test distributed energy resource management systems (DERMS) for the purpose of connecting private solar installations together and using them to improve grid reliability. Last year the utility asked the Pennsylvania PUC for approval to expand its use of DERMS by requiring customers with DERs to allow PPL to install inverters with a communication capability so the utility can "monitor and proactively manage" the customer's resource, such as a rooftop solar installation.
PPL argued this step was necessary because other utilities with a growing distributed energy footprint, like Dominion Energy, had experienced problems with voltage caused by customer systems. The utility needed to be able to adjust the voltage from customer inverters as necessary to prevent reliability problems, PPL argued. The company also said it needed to be able to see how much solar energy customers are generating, making communication interfaces a must.
But groups like GridLab and NRDC told the PUC not to assume that active management is necessary. PPL "had an a priori assumption that, 'If I can't manage the DER, I can't control reliability,'" GridLab Executive Director Ric O'Connell said. "There wasn't a lot of justification for that." He points out that California and Hawaii, two states with much more distributed energy than Pennsylvania, have not implemented active utility control of DERs to the extent that PPL was proposing.
The concern from critics of PPL's proposal is that not only would ratepayers be charged for expensive equipment and software, but that those additional costs could hold back the growth of distributed energy in general. For example, when designing the tariff rate at which rooftop solar users are compensated for the power they export to the grid, PPL's requirements for equipment and software could make that tariff less favorable for rooftop solar customers by increasing the overall costs of installing and operating rooftop solar, O'Connell said.
Under the settlement, however, the Pennsylvania PUC may gain a better understanding of the costs and benefits of PPL's proposal. A key question is "how often do the situations come up that you need active control?" Warren said. After the pilot, hopefully, "you'll have the data you need to make an informed decision," he said.
The pilot could also illuminate the extent to which current "smart" grid technology can accommodate customer adoption of rooftop solar. Customers participating in the pilot will use the latest types of inverters that boast the capability to sense voltage levels and adjust accordingly. "We're going to have an opportunity to evaluate how well the autonomous control features perform," Warren said.
An impressive performance could indicate that distribution grids beyond Pennsylvania can support more distributed energy than previously thought. "Voltage is a key factor for how much distributed energy can be on a distribution line," Warren said. If too much power is being pushed onto a distribution line — say, in the middle of the day when solar output is at its peak — expensive upgrades may be needed to regulate voltage, but the autonomous control features could allow distribution utilities to avoid that issue.
"Because the settlement is still pending approval from both an administrative law judge and the Pennsylvania Public Utility Commission, it would not be appropriate to discuss it in detail at this time," a PPL spokesman said. But "overall, we feel it will benefit our customers and further enable DERs in our service territory, while supporting the state's vision of renewable energy growth to address climate and sustainability objectives."
Correction: This story has been updated to reflect the fact that Sunrun is not a party to the settlement.