Mitigating the Impact of Electrification on Rates with Flexible Connection
This article was originally published in Public Utilities Fortnightly.
As electrification efforts and deployment of distributed energy resources (DERs) accelerate, utilities and state regulators around the country are seeking innovative approaches to serve growing electricity demand and connect DERs faster and more economically while maintaining grid safety and reliability. The challenge is that as more new customer resources connect to the distribution system, the grid’s ability to host them becomes more limited.
Fortunately, new strategies are emerging that provide temporary or long-term pathways for DERs to avoid grid constraints that can lead to costly and time-intensive utility infrastructure upgrades. These strategies typically fall under the banner of “flexible interconnection” or “flexible connection” and are gaining momentum in states where queue backlogs, grid upgrade costs, and affordability are of particular concern.
While many jurisdictions are still grappling with how to design flexible connection offerings, there are some key considerations that regulators and other stakeholders should be aware of to ensure that new programs are set up for success.
Flexible Connection Defined
As the grid becomes saturated with DERs and load, upgrades to the distribution system will become necessary. DER owners pay for upgrades in many cases. But for new loads — such as medium- and heavy-duty electric vehicle (MHDEV) charging depots, data centers, and building electrification — ratepayers foot the bill, amplifying already high electricity rates.
The timing of grid upgrades also presents challenges: customer sites may be non-operational for months or years. In the meantime, the utility receives neither revenue from the new load nor energy and services from the new DER.
While a distribution circuit may not have room for new loads or DERs to run at full capacity all hours of the year, there are likely many hours in which the circuit is not fully loaded. New DERs and loads can agree to vary their operations to match circuit loading and unlock more grid capacity without more poles and wires. This is called a flexible connection. Note that in the case of DERs, as opposed to load, flexible interconnection is the commonly used term.
Read the full article here.
