Arkansas Electric Energy Law : Arkansas Electric Energy Lawyer & Attorney : Eric Hughes Law Firm : Wind & Solar Power, Distributed Generation : Arkadelphia, Little Rock, Pine Bluff

There has been quite a debate in the legal blogosphere about the utility of Apple's new iPad for a legal practice.  Long time legal blogger Nicole Black has started a new blog about the iPad, as has Josh Barrett, a Portland, Oregon business attorney.  They are generally positive about the iPad.  On the other side of the spectrum are Scott Greenfield, a New York lawyer, and Brian Tannebaum, a lawyer in Miami.

Whether or not the iPad is a good tool for the delivery of legal services is beside the point to me.  One area where I see the iPad, the iPhone (or any other smart phone for that matter) providing value to electric energy utilities and consumers is in the convenient utilization of smart grid technologies.

Energy conservation is the cheapest and easiest method to reduce energy consumption and ameliorate environmental problems associated with energy production.  Smart grid technologies such as Google Power Meter offer consumers the opportunity more readily control their energy consumption by monitoring usage and highlighting things and times of high energy usage.

Control4 has an app allowing consumers to control things like security systems, access lighting, and temperature.  An app integrating that control with software systems like Google Power Meter and extending it to allow to conveniently control when the dishwasher, clothes dryer, and other household appliances operate would be a step in the right direction of energy conservation.  Moreover, feeding that information to the utility in real time would better equip them to flatten the demand curve, thereby reducing the need for spinning up plants for stand-by capacity.

Let Me Know:  If your home was smart grid enabled, would you use an app that gave you more control over your energy usage?

According to a new study released by the Utilities Telecom Council (UTC), Smart Grid technologies can yield benefits of $110-million annually to utilities.  The study -- entitled Smart Grid Economics:  Making the Business Case for Smart Network Technology -- was based on a comprehensive Smart Grid deployment by utilities with one million electric meters.

SmartGridNews.com reports that the study shows that with the use of Smart Grid technologies:

• System reliability is increased from 99.48% to 99.75%, reducing outage minutes by 16.8 million customer minutes
• Nearly 300,000 tons of carbon emissions are eliminated annually
• Over 9,000 direct and indirect job-years are created
• The internal rate of return for the smart network program is calculated at 13.8% without accounting for the value customers may place on the increased reliability of the electric grid; when factoring in these benefits, internal rate of return exceeds 35%
• System benefits calculated by the end of a 10-year forecast period are likely to exceed $110 million per year

As may remember from a previous post, the Arkansas PSC has current dockets investigating the proper use of these technologies in Arkansas.

Electric energy efficiency, conservation, demand response, innovative ratemaking, and transmission are hot topics throughout the United States, and the Arkansas Public Service Commission is actively addressing these issues.

• ENERGY EFFICIENCY.  Beginning in 2006, the Commission led an inquiry into the potential for utility led energy efficiency and conservation programs (06-004-R).  The result was the Commission's Rules for Conservation and Energy Efficiency Programs, under which the state's electric utilities implemented Quick Start C&EE programs for 2008 and 2009, and have filed plans for a Comprehensive C&EE Plans for 2010 and beyond.
  

• TRANSMISSION.  The Commission's Electric Transmission Docket, (08-136-U) was initiated in September 2008 to consider the state of the existing transmission network and to gather "information on new technologies related to the efficient transmission of electricity."  Not is the Commission examining new technologies that will "lead to greater optimization of the electric transmission grid" but is also considering "the adoption of 'Smart Grid' technologies" to increase energy efficiencies for consumers.
  

• RATEMAKING.  The implementation of Smart Grid and other technologies leading to energy efficiency and conservation pose issues of cost recovery and other revenue issues for utilities.  Therefore, the Commission initiated a docket expressly to consider innovative ratemaking rules (08-137-U).  In its Order establishing the docket, the Commission noted that while increased energy efficiency and demand response opportunities may decrease usage by consumers of electricity, but acknowledged "that revenue recovery by the utilities could be compromised absent possible implementation of decoupling mechanisms."
  

• SUSTAINABLE ENERGY.  Finally, the Commission is also considering the "expanded development of Sustainable Energy Resources ("SER")" (08-144-U).  The Commission defined SER to include energy efficiency, demand response, automatic metering (including the "Smart Grid"), and renewable resources.  Moreover, the Commission pointed to a number of regulatory models implemented across the country that include cost recovery for utilities implementing SER programs and lost revenue allowances (decoupling of utility profits from sales volume) to remove disincentives fro utilities to help customers save energy.

In light of the overlap between these four dockets, the Commission might consider consolidating them into a single docket for developing a regulatory framework that addresses:

1. Current and future generating capacity requirements;
2. Rules for siting and transmission for utilities and Independent Power Producers;
3. Integration of electricity produced by renewable resources;
4. Standards for the implementation of demand response, including automatic metering and "Smart Grid" technologies for consumers; and
5. Rules for cost recovery and decoupling.

Energy law and policy are important issues in our time.  On the one hand, energy needs are projected to grow at an accelerating rate, taxing the supply of available energy resources and increasing our dependence on foreign sources of energy.   On the other hand, energy generation, transmission, distribution, and consumption contribute to climate change and have other adverse environmental consequences.  Supplying our energy needs now and in the future --at a reasonable cost and with the least possible negative impact on the environment -- is a challenge that confronts us all.

However, there are opportunities in these challenges, particularly in the field of electric energy.  While still small, the share of utility scale electric generating capacity taken by wind, solar, geothermal, biomass and other renewable and alternative sources of energy will only grow.  Even so, those sources of electricity generation currently have their own limitations, such as reliability for base load, along with siting and transmission issues.  While those alternative sources of energy hold out promise for the future, the current reality is that older and cheaper technologies for producing electricity, like coal and natural gas fired power plants and nuclear power, will be the primary sources of electric energy for the foreseeable future.  But some argue advances in clean coal technology and carbon capture and sequestration will reduce the environmental impact of those sources of electric energy.  Although, cap-and-trade legislation such as the American Clean Energy and Security Act of 2009 (Waxman-Markey), which attempts to impose the true costs of those dirtier technologies, could put renewable energy resources on an equal economic footing.

Moreover, new technologies in demand side management hold out the promise of increasing energy efficiency in ways that are both observable and measurable by the average electric energy consumer.  Advanced metering and smart grid technologies, coupled with appliances equipped with computer chips to communicate with the meter, and software to measure and report electric usage, will empower consumers to take more control over their own energy usage.  Those same technologies, including net metering, will increase the effectiveness of distributed generation systems like residential solar and small wind installations.   All these advances will change the consumer's relationship with their electric power supplier.  Thus, new regulatory and rate-making mechanisms must be studied, including decoupling of the rates electricity distributors charge from the amount of electricity supplied.

These are interesting times for electric energy law and policy, and Arkansas is at the forefront of confronting the challenges and capitalizing on the opportunities.  For example, the continuing fight over the location of SWEPCO's John W. Turk coal-fired generating plant in Hempstead County has implications for electric generation and transmission in Arkansas and across the nation.  And, with the location of LM Glasfiber and Nordex wind turbine blade manufacturing facilities in Arkansas, the alternative and renewable energy sector is contributing to economic development and job creation.

At the Hughes & Hughes Law Firm we have been following these issues with interest.  We want to be a participant with you in meeting the challenges of our time.  Therefore, this blog is designed to be a source for news and commentary about electric energy law and policy that effects Arkansas business, industry, municipalities, landowners, consumers, and others.  We hope you will join our conversation.