Regulatory web stunts energy market growth

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The perennial balancing act for utilities is one of reconciling the wants and needs of their consumers with myriad energy regulatory policies, all while running a business. It's not often easy, and it's almost always expensive for both utilities and ratepayers. So utilities must find ways to satisfy their own (and, in many cases, their shareholders) bottom lines while satisfying compliance issues and delivering reliable power.

These challenges have been heavily discussed and debated within the industry, and while no one solution has won out, there is clearly a consensus emerging on best practices and suggestions of how to overcome these issues going forward.

Consumers grow distributed generation

With an economy that has remained slow, consumers are increasingly looking to use electricity generation and net metering incentives to supplement income through lowering monthly power bills.

"We've got good intention legislatures who are putting in incentive programs to drive renewable energies," said Karen Lefkowitz, Vice President of Business Transformation at Pepco Holdings, during a recent GridWeek session in Washington, D.C.

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The growing interest in distributed generation is placing significant strain on the grid, and causing utilities to reposition their views on how to prepare the grid. ______________________________

This demand is especially high among farmers and agricultural workers in the state who have the option to install solar on their property with a relatively quick four-year payback and high revenue possibilities. In fact, New Jersey has paid out more than $3.6 million in solar installation rebates since 2001, according to data from New Jersey's Clean Energy Program.

But policy is running ahead of science in many cases, which can hinder the adoption of these incentives. In New Jersey in particular, the necessary upgrades and investments have not been made to power feeders across the state fast enough to keep up with demand, she said.

"When you have the economics driving behavior, you have to know that people are going to change quickly," Lefkowitz said.

Without properly working feeders and other ailing infrastructure, utilities in the state are being forced to turn customers away. This isn't just a lost opportunity to use incentive money, but also an engineering challenge for utilities. So while progressive policies do exist, (along with wide pipeline of interest in renewable energy generation) they are poised to go nowhere fast unless regulators quicken the pace and work to get technology to come on board.

Further, net metering is no easy sell for utilities and regulators, and nailing down participation caps and fair compensation rates has been a contentious issue. This can lead to eager customers getting shut out of net metering, while at the same time others in the program continue to be credited too much for their generation. And utilities argue that often times those who do not use distributed generation are footing the bill as a result.