Utility regulators are struggling with how to accommodate increasingly popular new “microgrid” technologies that allow some homes to generate ample electricity without having to draw power from large established grids, McGuireWoods partner and McGuireWoods Consulting senior advisor Bernard McNamee told The New York Times in a Sept. 1, 2022, story.
The Times’ story explained how a solar energy firm is seeking permission from state regulators in California to provide electricity to homes in new residential developments as a private “micro-utility” — a business model that’s illegal in much of the country.
McNamee, who served on the Federal Energy Regulatory Commission from 2018 to 2020, said that while the traditional regulated utility monopoly model might seem antiquated, it has ensured that everyone, regardless of income, has had access to a generally reliable electric grid. State and federal regulators still need to figure out how to treat new technologies like residential solar and battery systems that can operate independently of, and even compete with, established utilities.
“What we need to make sure of is that the system is designed to provide reliable, affordable electric service to every customer,” McNamee told the Times. “People throw around things like competition and markets, all of these things are complicated.”
McNamee also was quoted in a Sept. 15, 2022, S&P Global story discussing grid reliability, which has drawn attention as states like California have struggled to meet demand amid heat waves and a shift toward more intermittent renewable resources. Those challenges could prompt scrutiny of the clean energy transition broadly and the efficacy of wholesale power, McNamee said.
“Because of the changing resource mix, we’re seeing that the [regional grid operators] may not be providing reliability or the economic value that was promised to customers, particularly as you have a growing number of subsidized resources like wind and solar that also don’t have fuel costs and yet power prices are generally set at a clearing price set by natural gas and all resources are then paid at price,” McNamee said. “As we get more subsidized resources, the question is going to become, when are those economic benefits going to pass to customers?”