National Council on Electricity Policy

2020 NCEP Annual Meeting on Evolving Compensation and Market Mechanisms

Meeting Scope

In 2020, NCEP explored the age-old utility question of "who pays?" with a new twist from grid modernization: "how?" The modern grid will allow for the exchange of more granular information on electricity use and supply across the distribution and transmission systems. State electricity policy decision-makers explored:

  • What is a state's role in maintaining a well-managed, efficient electricity system, now with rapidly changing requirements and many more participants?
  • How is value acknowledged and compensated among sellers, operators, and buyers? What risks are shared with customers?
  • How can modern cost-benefit analysis, valuation approaches, and cost recovery plans be used to compare and optimize between bulk power system solutions and distribution system solutions?
  • What capabilities exist and are needed for potential distribution system-level markets, and TSO & DSO coordination?

Meeting Materials

Session descriptions and links to presentations follow.

Welcome and Announcement for the Second Jan Brinch Award for Collaboration in Public Service – Day 1, September 13, 2021

In 2019, NCEP initiated an award in memory of Jeannette “Jan” Brinch, who passed away in 2018 and energetically facilitated the National Council on Electricity Policy (NCEP) from 2014 to 2018. Jan’s career was marked by progress on energy and environmental issues from a wide range of public service positions. One of the hallmarks of her success in each of these roles was her desire to collaborate with others with diverse perspectives, positions, and organizations. This award honors other public servants who similarly view their positions as opportunities to bring people together to accomplish public interest goals in the electricity sector.

The 2020 Jan Brinch Award was awarded to former U.S Department of Energy, Office of Electricity, State and Regional Assistance Director Larry Mansueti. See press release.

View session recording

Recent FERC Decisions – Day 1, September 13, 2021

Staff from the Federal Energy Regulatory Commission (FERC) provided an overview of the recent issuance of Order 2222. Order 2222 enables distributed energy resource (DER) aggregators to compete in all regional organized wholesale electric markets./p>

Panelists Speakers:

Karin Herzfeld, Federal Energy Regulatory Commission – View presentation

David Kathan, Federal Energy Regulatory Commission

View session recording

Operational Considerations for Distribution Level Markets – Day 1, September 13, 2021

What capabilities exist and are needed for potential distribution system-level markets, and TSO & DSO coordination?

This foundational session provided an update on the latest thinking on operator architectural frameworks and key operational considerations for policymakers. This session discussed grid to grid communications, operational functions, and aid in understanding how markets work behind the scenes.

For introductory material on T&D operational coordination and considerations for states, please review materials from the 2019 Annual Meeting

Panelists (presentation hyperlinked):
Paul De Martini, Newport Consulting Group – View presentation
Anne Hoskins, Sunrun – View presentation

View session recording

Introduction to Compensation and Market Mechanisms – Day 1, September 13, 2021

How is value acknowledged and compensated among sellers, operators, and buyers? What risks are shared with customers? “Who pays?” is a constant question that surrounds decision making in the public interest and has caused tension at interstate levels. What have been some landmark movements toward where we are today? What do some of those decisions tell us about the path that we are currently on and directions that lay ahead? With actions of the states today, where are they striving to go? How do we know what is working?

Speakers:
Burcin Unel, NYU Institute for Policy Integrity – View presentation
Ann McCabe, Regulatory Assistance Project – View presentation
Lynne Kiesling, Carnegie Mellon University – View presentation

View session recording

Exploring Optimization through Benefit-Cost Analysis – Day 1, September 13, 2021

How can modern cost-benefit analysis, valuation approaches, and cost recovery plans be used to compare and optimize between bulk power system solutions and distribution system solutions?

This session explored the latest trends in comparing and optimizing between the bulk power system and distributed system solutions. For a utility regulator, a benefit-cost analysis (BCA) is essential information before investing in any solution. BCAs were developed before DERs were impacting the system. This session explored the status of BCAs and new developments for consideration.

Speakers:
Hon. Abigail Anthony, Rhode Island Public Utility Commission – View presentation
Julie Michals, E4TheFuture – View presentation
Snuller Price, E3 – View presentation

View session recording

Fireside Chat: Evolving Compensation and Market Mechanisms – Day 2, September 14, 2021

With the distribution system adopting contemporary technologies, what are the considerations for modern compensation and market mechanisms? What is the vision for markets and financial transactions? How does policy impact technology development and markets?

Moderator:
Hon. Paul Kjellander, Idaho Public Utility commission
Panelists (no presentations):
Julia Frayer, London Economics International
Mark Paterson, Strategen
Tanya Barham, Community Energy Labs

View session recording

A Future with Customer Level Markets – Day 2, September 14, 2021

The modern grid will allow for the exchange of more granular information on electricity use and supply across the distribution and transmission systems. What approaches are in place and on the horizon for leveraging customer resources to support grid needs?

Speakers:
Mark Knight, Burns and McDonnell - View presentation
Monica Neukomm, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office - View presentation
Ajit Renjit, Electric Power Research Institute (EPRI) – View presentation

View session recording

Intersections of Regional Markets and State Policies – Day 2, September 14, 2021

Discussed state and RTO experiences leveraging and compensating distributed energy resources and coordinating interfaces of the electricity system. This session examined ideas around the needs of a coordinated system and how states and RTOs play a role in developing a future-proofed system. Topics included interconnection, recent FERC orders, and state policy goals.

Speakers:
Marcus Hawkins, Organization of MISO States – View presentation
Asim Haque, PJM – View presentation
Hon. Katie Dykes, Connecticut Department of Energy and Environmental Protection (DEEP) – View presentation

Greg Poulos, Consumer Advocates of the PJM States (CAPS) – View presentation

Overview of the National Standard Practice Manual (NSPM) for DERs – Day 2, September 14, 2021

Throughout the past two days, NCEP members and stakeholders have heard about their roles in maintaining a safe, reliable, and affordable electricity system while grid planning, operations, and markets are changing. This facilitated workshop will leverage example scenarios to demonstrate the tradeoffs that decision makers consider when considering investments and alternatives through the NSPM Benefit-Cost Analysis Framework.

Speakers:
Julie Michals, E4TheFuture
Tim Woolf, Synapse Energy Economics - View presentation

View session recording

Example scenarios:
Developing your Primary Test
Use of Secondary Tests
Prioritizing DERs Addressing Rate Impacts

Economic Benefits of Resilience Investments – Day 2, September 14, 2021

Speakers:
Pete Larsen, Lawrence Berkeley National Laboratory - View presentation

View session recording