Hydrogen is emerging as an important player in the U.S. energy landscape because of its ability to decarbonize multiple sectors. A number of exciting projects harnessing the technology are taking shape as hydrogen and fuel cells can store energy to help enhance the power grid and maximize opportunities to deploy renewable energy.
With growing access to competitive retail energy markets, regulatory reforms are focused on ensuring that consumers choosing third-party suppliers have accurate information to make educated decisions. In addition to updating marketing standards and sales practices that enhance customer protections, recent reforms are intended to empower customers by improving transparency of product and pricing information.
State policy goals are driving comprehensive grid modernization endeavors aimed at transitioning to a flexible and efficient grid that caters to the needs of the evolving electric sector and diverse customer interests. A growing number of state regulators and utilities alike are embarking on innovative ventures, striving towards necessary enhancements to accomplish energy and environmental goals.
In light of the ongoing nature of the COVID-19 pandemic, state utility commissions are taking different approaches to mitigate the impacts on utilities and ratepayers. Several states have extended moratoriums on service terminations while directing utilities to proactively engage in outreach programs to inform customers about payment assistance and plans. Others have allowed utilities to resume disconnections for nonpayment as costs of unpaid bills continue to mount.
States and utilities across the U.S. are expanding electric vehicle (EV) charging infrastructure to overcome barriers to transportation electrification. The demand for fast charging in states with zero-emission vehicle goals, such as California, New York, and New Jersey, have heightened the need for reliable access to a wider network of stations.
Proposals to accelerate the phase-out of coal-fired generation appear more prominently in long-term resource plans of U.S. electric utilities, reflecting the growing shift to renewable energy. The transition from coal continues to be driven by state clean energy mandates, emissions reduction goals, low natural gas prices, and increased availability of low-cost renewables and storage resources.
There is a growing interest in how carbon pricing can be incorporated into wholesale power markets as more jurisdictions embrace policy goals to transition to a lower-carbon power system. The Federal Energy Regulatory Commission has scheduled a technical conference to consider state adoption of mechanisms to price carbon emissions in regions with commission-jurisdictional electricity markets.
Recently, state regulators have stepped up efforts to value distributed energy resources (DERs) more accurately while looking for ways to better reflect the costs they impose on the grid. Among recent actions, New York adopted a mechanism to move the market towards more cost-reflective rates, while California decided to include avoided transmission costs in the valuation, and Connecticut unveiled a study on quantifying the benefits of these resources.
Alternative ratemaking plans and innovative rate design proposals continue to emerge as utilities adapt to policy and technology changes driven by decarbonization efforts and distributed energy growth. With growing state mandates to increase renewable energy generation, regulators are devising performance metrics and incentives to encourage utility innovation in achieving policy goals.
The offshore wind industry continues to progress in the U.S. with East Coast states proceeding with new solicitations to procure capacity to meet their ambitious goals. New York and New Jersey are seeking to add nearly five gigawatts alongside offshore port infrastructure. Massachusetts is considering a bundled solicitation for generation and transmission in its next round of procurement. The industry’s growth has prompted federal regulators to examine whether existing frameworks in regional transmission organizations can accommodate offshore wind integration.
The debate over ratepayer subsidies for struggling nuclear power plants has resurfaced, following a racketeering investigation related to a controversial Ohio law, which created a $1 billion bailout for FirstEnergy Corp. last year. The economic troubles of the embroiled industry come to the fore even as states such as New Jersey and Illinois evaluate plans to opt out of the regional capacity market in response to reforms that expanded the minimum offer price rule to subsidized resources.
The Federal Energy Regulatory Commission has revised the regulations for implementing a 1978 federal law, which requires electric utilities to purchase power from small power producers. The reforms, intended to reflect changes in the energy markets, mark the first major overhaul to utility power procurement rules under the law, which has spurred the growth of small renewable generators.