US regulators must break out of current molds, embrace new technology
New technologies poised to modernize the grid and give consumers more choice in their energy decisions risk being mired in policy discussions and never getting to commercialization if regulators do not begin to break out of their current approaches, a utility executive said at an industry forum.
Raja Sudararajan, vice president of regulatory services at American Electric Power, said that bringing cutting-edge energy technologies to market will require a rethinking of current regulatory models as the energy space undergoes a major shift in the generation mix and moves toward a 21st century electric grid with two-way power flows and smart devices.
Key to mitigating reliability disruptions while the “grid is in flux” will be meaningful transition planning, Sudararajan said Thursday at the US Energy Association’s 10th annual Energy Supply Forum.
He asserted that most power and gas industry players did not need support from the government in the form of capital, but were instead advocating for changes to the current regulatory construct that has not kept pace with new technologies.
Sudararajan pointed to his company’s desire to deploy battery technology in Texas in lieu of rebuilding certain transmission lines and the obstacles they have yet to overcome to allow that to profitably happen.
Policy questions, he said, are preventing providers of newer technologies from being compensated for all the services they provide. In the case of batteries, they run into roadblocks as regulators cannot easily place the technology into one of three buckets, namely, generation, transmission or distribution, and each bucket has fundamentally different regulations and jurisdictional issues.
REGULATORY LAG SLOWING DEPLOYMENT
“The lack of a clear construct and the fact that technology has evolved way more significantly than the traditional classification of generation, transmission and distribution is going to be the single largest reason why these technologies don’t get deployed,” Sudararajan said.
He added that the cost-benefit analysis for these technologies will never pan out if deployments are isolated as it is the combined benefit that comes with mass deployment that makes them economical.
Thus, if the regulatory constructs do not evolve to accommodate technologies tied to grid modernization and expanding consumer choice, they will serve as barriers to the adoption and deployment of advanced energy solutions, he said.