Energy Department Allocates $220 million for Grid Modernization Funding

U.S. Energy Secretary Ernest Moniz announced the release of the U.S. Department of Energy’s (DOE’s) comprehensive new Grid Modernization Multi-Year Program Plan, a blueprint for modernizing the grid. The Secretary also announced the award of up to $220 million over three years, subject to congressional appropriations, to DOE’s National Labs and partners to support critical research and development (R&D) in advanced storage systems, clean energy integration, standards and test procedures and a number of other key grid modernization areas. Additional programs and funding opportunity announcements related to the Grid Modernization Initiative will be announced in the near future.

“Modernizing the U.S. electrical grid is essential to reducing carbon emissions, creating safeguards against attacks on our infrastructure and keeping the lights on,” said Secretary Moniz. “Our Quadrennial Energy Review and Quadrennial Technology Review identified needs and opportunities to invest in the grid. This public-private partnership between our National Laboratories, industry, academia and state and local government agencies will help us further strengthen our ongoing efforts to improve our electrical infrastructure so that it is prepared to respond to the nation’s energy needs for decades to come.”

The Grid Modernization Initiative represents a comprehensive DOE effort to help shape the future of the nation’s grid and solve the challenges of integrating conventional and renewable sources with energy storage and smart buildings, while ensuring that the grid is resilient and secure to withstand growing cybersecurity and climate challenges. The announcements fall under the Grid Modernization Initiative’s framework.

The Grid Modernization Multi-Year Program was developed by DOE in close collaboration with a wide range of key external partners. The program lays out a blueprint for the Department’s research, development and demonstration agenda to enable a modernized grid, building on concepts and recommendations from DOE’s recently released Quadrennial Energy Review and Quadrennial Technology Review.

The up to $220 million in R&D funding falls under the Grid Modernization Laboratory Consortium. The consortium involves 14 DOE National Laboratories and dozens of industry, academia and state and local government agency partners across the country. These funds are being awarded in response to a challenge to the National Laboratories to establish a comprehensive grid-related R&D effort to address various emerging challenges and opportunities in the power grid.

DOE’s Grid Modernization Award Recipients

Salt River Project, Omaha Power repeat in J.D. Power Business Satisfaction Ranking

Electric utilities must be doing a better job of communicating, participating in their communities and pricing their products, because business customers are certainly noticing.

The J.D. Power 2016 Electric Utility Business Customer Satisfaction Study found that providers were ranked significantly higher than last year. The overall average score, on 1,000-point scale, was 704, compared with 677 in 2015.

The average is the highest in eight years. The biggest jumps in satisfaction focused on communications (up 55 points), corporate citizenship (+45) and price (+43).

Consolidated Edison, Met-Ed, Ameren Missouri, Omaha Public Power District (OPPD), Entergy Arkansas, Jacksonville (Florida) Electric Authority, Salt River Project (SRP) and Sacramento Municipal Utility District (SMUD) headed up their respective regions.

“Communication and corporate citizenship are important to businesses,” said John Hazen, director of the energy practice at J.D. Power. “Providers are doing a better job of proactively communicating with their business customers not only during an outage, but also on a regular basis to keep them informed of things such as energy programs offered, and to gather customer feedback.”

The study is now in its 17th year measuring business customer satisfaction with utilities. The study covered 102 U.S. providers, each of which serves more than 25,000 business customers and altogether supplies electricity to more than 12 million customers.

The utilities were divided into four geographic regions and classified into one of two segments. Large utilities served 85,000 or more business customers, while midsize served at least 25,000 customers.

Jacksonville Electric Authority and SMUD topped their respective midsize south and west segments and the overall scoring with 754 points. SRP, based in Arizona, led the large west for the third straight year and sixth time in seven years.

SRP and OPPD were the only two repeat winners in their segments. It was an extremely competitive year for high satisfaction scores, according to J.D. Power.

“There are 53 ranked providers with an overall satisfaction score above 700 this year,” said Hazen, who noted that in 2014 only four providers achieved scores of 700 or higher. “This clearly demonstrates that when providers make an investment in customer satisfaction and put in the effort, they can improve their customers’ experiences.”

Electric Light & Power magazine’s 2015 Utility of the Year, Public Service Electric & Gas, was third in the large east segment at 702 points, close behind Consolidated Edison and second-place PPL Electric Utilities.

The top 3 winners in each region include:

Large East: 1) Con Edison; 2) PPL Electric Utilities; 3) Public Service Electric & Gas.

Midsize East: 1) Met-Ed; 2) Pepco; 3) Delmarva Power.

Large Midwest: 1) Ameren Missouri; 2) Kansas City Power & Light; 3) DTE Energy.

Midsize Midwest: 1) Omaha Public Power District; 2) Kentucky Utilities; 3) Indianapolis Power & Light.

Large South: 1) Entergy Arkansas; 2) Alabama Power; 3) Florida Power & Light.

Midsize South: 1) Jacksonville (Fla.) Electric Authority; 2) Nashville Electric Service; 3) Orlando Utilities Commission.

Large West: 1) Salt River Project; 2) Rocky Mountain Power; 3) Puget Sound Energy.

Midsize West: 1) Sacramento Municipal Utility District; 2) Seattle City Light; 3) Avista.

EEI Honors Edison International CEO Craver with Distinguished Leadership Award

Edison International Chairman, President and CEO Theodore “Ted” F. Craver, Jr. was awarded the Edison Electric Institute’s (EEI’s) Distinguished Leadership Award by his industry peers for his years of significant contributions and commitment to the electric power industry, EEI announced recently.

“Ted is a visionary leader for our industry, and it is a privilege to present this award to him,” said EEI President Tom Kuhn. “Ted is always ready and willing to serve the broader industry, and he has been unwavering in his efforts to help focus the EEI membership in critical areas. His steady and determined leadership style truly has helped guide our industry as it undergoes a major transformation.” The award, established to recognize outstanding individual achievement, was presented during EEI’s winter CEO and board of directors meeting. Craver is the eighth industry CEO to receive the award.

Edison International is a holding company for several utilities, including Southern California Edison and Edison Transmission. EEI is an association representing all U.S. investor-owned utilities.

Craver was elected president of Edison International in April 2008, and chairman and CEO in August 2008. He also served as chairman, president and CEO of Edison Mission Group from 2005 to 2008. Additionally, he served as executive vice president of Edison International, and as chief financial officer and treasurer from 2000 through 2004. Craver served as EEI chairman from June 2014 to June 2015, and is currently a member of EEI’s leadership serving on the executive committee.

“I have seen first-hand the tremendous leadership role that Ted plays, not just in California, but also nationally. He is a major force in driving our industry to the future with a keen eye on the need to provide reliable and affordable energy every day to all of our customers,” said PG&E Corp.chairman, CEO and president Tony Earley, a previous EEI Distinquished Leadership Award winner. “On a personal note, Ted is a great friend who helped me transition into California and serves as a role model of integrity and dedication. He is absolutely deserving of this distinction.”

Electric Light & Power magazine last year honored Craver as its Large Utility CEO of the Year. In last year’s EL&P article about the CEO of the Year Award, Craver was asked about his leadership approach and interacting with employees.

“Truth be told, it is the contact with our employees that consistently rescues my mood. I’ve lost count of the number of times I have gone into an employee roundtable, on a facility tour or simply gone to the cafeteria or walked the halls where I come away feeling re-energized and recommitted,” Craver said. “I think it is because it makes me get outside of myself and whatever I’m thinking about and gets me into thinking about what is important to them. As human beings, perhaps especially as CEOs, we can become too self-absorbed.”

Before joining Edison in 1996, Craver served as executive vice president and corporate treasurer of First Interstate Bancorp and held positions of increasing responsibility in capital markets, sales and trading, and corporate development throughout his 23 years in the banking industry. He serves on several Boards, including Health Net Inc., The Nature Conservancy, Autry National Center, the Smithsonian National Museum of American History, and is past-chairman of the Electric Power Research Institute and of the Edison Electric Institute. He is a member of the Business Roundtable and the Economic Advisory Council of the Federal Reserve Bank’s Twelfth District. Craver earned an MBA and a bachelor’s degree in economics and international relations from the University of Southern California.

DER Adoption Trending with Customers, Tougher for Utilities, Study Shows

Consulting firm West Monroe Partners’ latest study of customers, utility executives and utility regulators on the present and future state of distributed energy resources (DER) found that the interest and growth of DER is increasing among residential customers particularly, but some utility executives and regulators have yet to settle on collaborative ways to prepare for the potential shift.

Commercial and industrial customers have long led the charge for self-generation technologies; however, the tide is changing as residential customers increasingly look to adopt DER in their homes and neighborhoods through shared resources such as community solar.

According to West Monroe Partners’ study, residential customers are the largest group adding DER as cited by 82 percent of utility executives, closely followed by commercial and industrial customers (77 percent).

A combination of factors is impacting customers’ interest in DER, from the social benefits to their economic and reliability benefits. Of customers that have adopted renewable energy sources, 71 percent did so to lower their utility bill and 17 percent did in response to their stated environmental stewardship.

“While DER adoption is beneficial for customers and the environment, it’s forcing the utility industry and regulators to reconsider the traditional utility business model and how the utility monetizes the value of the services it offers to customers,” said Tom Hulsebosch, managing director in West Monroe Partners’ Energy & Utilities practice.

Despite residential customers’ increased interest in DER, only 37 percent of utility executives offer DER-specific support services, systems or technologies, and 59 percent plan to make no or minimal investments to support DER unless mandated to do so. Utilities’ inaction is attributed to the industry’s lack of clarity around DER’s impact on their systems and regulatory uncertainties. The study found 66 percent of executives feel DER are both a threat and opportunity for their businesses.

Utility executives hold a conservative outlook toward the spread of distributed energy resources within their systems. Sixty-eight percent of executives expect DER technologies to only provide 1 to 5 percent of supply resources in the next five years, and 47 percent believe small residential systems will be the most prevalent source of DER on their systems in the next five years, followed by third-party power providers, the utility itself and commercial/industrial systems.

Compared to utility executives, regulators are already modifying their compliance requirements to support DER integration. Regulators cite a handful of concerns driving the proposed changes. Grid reliability was ranked by regulators as the top factor driving regulatory action to support DER with 78 percent, followed by rising costs of delivered energy and requests from external stakeholders with 67 percent.

Supporting DER and integrating them into daily utility operations will not come without challenges. According to the study, 61 percent of utility executives believe capital and financial constraints are barriers to DER adoption and support, while 61 percent of regulators believe regulatory barriers are the most significant obstacles.

“Utility executives and regulators have contrasting views on the amount of DER penetration that can be readily absorbed into the existing grid without fundamental changes being made to accommodate them,” said Paul A. DeCotis, director in West Monroe Partners’ Energy & Utilities practice. “This divide, along with technology availability and cost, pivoting business models and public policy interests, have put a hold on the amount of DER integration expected to come on line in the immediate future. These and other issues continue to impede the industry’s ability to accommodate new energy technologies and gain greater support.”

Educating customers on these new technologies is another barrier to DER adoption. The study found 69 percent of customers do not know if their utility offers DER enrollment and 94 percent say their providers haven’t approached them about alternative energy options. Utilities that fail to educate customers and provide a sufficient DER customer experience may suffer business and compliance consequences, and as a result, more oversight from regulators.

PennEnergy Report: Energy Firms Take Varied Cybersecurity Measures

More than half of respondents who work in the energy industry say their companies do not have a chief security officer overseeing defense of cyberattacks from the outside, according to a survey by PennEnergy Research.

The survey, which started in October 2015, found that 52 percent of those professionals answered that their firms had not hired CSOs with explicit cybersecurity functions. About 40 percent said yes to CSOs while 8 percent were not sure.

Yet more than half either said their firm had experienced an unauthorized use of the computer system in the last 12 months (29 percent) or they were not sure (24 percent). Of those, nearly 28 percent said they experienced more than 10 incidents of unauthorized access to computer systems.

These companies also apparently handled most of the detected and unauthorized computer access in-house. Nearly 60 percent said companies “patched holes,” as the survey puts it, while 17.2 percent reported the intrusion to law enforcement. Nearly 14 percent did not report at all, while 10 percent contacted their legal counsel.

A strong majority, or 80 percent, believed that their cybersecurity investments had met or exceeded expectations, according to the report. Fifty-one percent of respondents do not outsource their computer security functions, which, of course, means that 49 percent do.

Computer viruses led the way as the most detected type of attack at 66 percent. Insider abuse of Internet access and laptop/mobile theft were next at 28 and 25 percent, respectively.

A slight majority, 51 percent, leaned toward using cybersecurity as a criteria for vendor and device selection. Twenty-one percent said no while 28 percent were not sure if cybersecurity was a criteria for their company.

Power utilities of some kind employed 43 percent of the respondents, with investor-owned utilities leading the way at 28 percent. Another 21 percent worked in the energy service and supply sector, according to PennEnergy.

More respondents than not, or 53 percent, worked with smaller companies employing 200 or fewer people. Fourteen percent worked for firms of 10,000 or more people.

With a wide audience from different spaces in the energy industry, PennEnergy Research can also conduct specialized custom surveys, tailored for individual studies. Some of the surveys it has completed include brand awareness, pain points and challenges in the industry, industry reception of new ideas and more. Contact PennEnergy about a study by emailing

For more detailed findings of this survey, including the in-depth analysis, please visit

MusiComms SurveY: SOME Customers Want Tunes from Their Thermostats

A survey led by a music-distribution organization found that customers want to receive music from their thermostats and energy providers, as well as from many other services.

MusiComms, an organization dedicated to the future of music distribution, announced the results of their 2015 Year End Consumer Preferences for Future Music Delivery Survey. The questions were provocative and the answers telling.

Males were more likely than females to select the thermostat option, and about 8.2 percent of the people surveyed thought it was a good idea. Demographically, those 25 to 34 years old were the most likely to like this idea.

More than 4,000 people were asked how they want to receive their music in the future. Specifically, “How would you like to receive your music in the future?” In addition to from their thermostat via their energy provider, the options for response included:

  • From their accessories like exercise bracelets, earrings or sneakers
  • From their TV provider
  • From their car, streaming as part of a service with their automobile purchase.

Consumers were also asked whether or not they would be more inclined to buy things if companies offered free music with purchase and whether or not they would change wireless providers if music was included.

More than 40 percent of respondents confirmed that they would change wireless providers if free music streaming came with their service plan. Another striking result was that nearly 25 percent of consumers would buy streaming services from their automobile manufacturers.


Moody’s Service Rates Nevada Net Metering Reform as Credit Positive

Moody’s new Credit Outlook issued a release about the impact of Nevada’s net metering reform on NV Energy:

On January 1, NV Energy Inc.’s electric utilities put into effect new net energy metering (NEM) tariffs approved by the Public Utilities Commission of Nevada (PUCN).

The new rates will raise future bills for its rooftop solar customers and avoid unreasonable rate increases for other customers, so that the net effect will be neutral to NV Energy’s cash flow. The PUCN’s order is nevertheless credit positive because the revised rate design addresses cost-shifting among its customers as a result of technological change, while ensuring the sufficiency and predictability of the utility’s revenues.

The new tariff design addresses the cost-shift issue by lowering the rate at which NEM customers are credited for the excess power sold to the grid and by increasing the fixed charge component of their bill. For example, residential NEM customers of NV Energy’s largest subsidiary, Nevada Power Co. (Baa1 stable), used to see their bills credited at the average retail price of 11 cents per kilowatt-hour in 2014.

Under the new tariffs, they initially will receive bill credits at an average rate of nine cents per kilowatt-hour, which will gradually be decreased over the next four years. Increased fixed charges aim to ensure NEM customers are paying their share of the fixed costs to maintain the utility’s facilities. A higher fixed component will also make revenues more predictable and less susceptible to changes in sales volumes.

Available in 43 states, net metering has been used for 30 years as an incentive to promote clean energy by allowing customers who install rooftop solar to reduce their electric bills.

Under an NEM tariff, solar customers offset the cost of the power they buy from the utility with the price of excess power they sell to the grid. The rapid growth of rooftop solar in recent years has caused numerous utilities to call for NEM reform to ensure that NEM customers are paying their fair share of the costs of running a utility and not shifting that burden unduly to non-rooftop solar customers. In fact, 31 states are now in the process of revising their NEM policies.

In this order, the PUCN made a precedent-setting move to impose higher costs on both current and future NEM customers, unlike other states such as California and Hawaii that have grandfathered pre-existing NEM tariffs for existing NEM customers. The Nevada order will raise NEM customers’ utility bills and diminish their savings from owning solar panels as they bear more of the fixed costs that were previously shifted to non-rooftop solar customers.

The new tariffs will have little effect on NV Energy’s revenues, since PUCN’s order in effect reallocates the utility’s cost responsibility between solar and non-rooftop solar customers. The company estimated that its non-solar customers subsidize solar customers by $28 million annually. Furthermore, enrollment in NV Energy’s NEM program is limited and was just over 1 percent of its total customers as of November 2015.

The largest utility company in Nevada, NV Energy is a subsidiary of Berkshire Hathaway Energy Co. (A3 stable), Berkshire Hathaway’s energy investment vehicle. Berkshire Hathaway is also an investor in Moody’s Corp.

EYE ON the world

SaskPower Places 230 kV Canadian Transmission Line in Service

By Tom Tiernan, Senior Analyst, TransmissionHub

Some right-of-way reclamation and additional work has yet to be completed on the Island Falls to Key Lake transmission line in northern Saskatchewan, but the line was placed in service in October 2015, a Saskatchewan Power spokesperson told TransmissionHub.

The additional work includes assembly of five reserve towers, completion of a 230-kV bay at the Island Falls switching station, additional switches near Lindsay Lake, at about the mid-way point on the 186-mile project, and an interconnection with a power system in Manitoba, the SaskPower spokesperson said. Some of that work needs to take place in the spring, he said.

The single-circuit, 230-kV line was added to improve reliability in the region and meet projected loads from new mines in northeast Saskatchewan. It begins at the Island Falls hydropower station and extends northwest to the Key Lake area, according to a SaskPower fact sheet about the project.

The project is projected to come in under the established budget of $270 million, the SaskPower spokesperson told TransmissionHub.

SaskPower originally had a lower estimated cost for the project, at about $140 million, according to TransmissionHub data.

SaskPower chose Quanta Services unit Valard Construction to build the project, and the work took a couple years and Valard encountered some challenges, Valard and Quanta noted in different statements over the past several months. Access points on the project were limited to the two points at Island Falls and Key Lake, and at Lindsay Lake, with much of the assembly and other work completed with the use of helicopters, Valard said.

Extreme winter weather in the first half of 2015 and forest fires in the middle of 2015 caused construction work stoppages, Quanta noted. Work was nearly complete when Valard demobilized crews late in the summer of 2015 due to the fires in Saskatchewan, Quanta President and CEO James O’Neil said in August 2015 during the company’s 2Q15 earnings conference call.

SaskPower awarded Valard the construction contract in early 2013.

Much of the route of the Island Falls to Key Lake line follows an existing SaskPower transmission line, according to SaskPower. The 138-kV power line that originally began serving the area was built in the early 1990s, the utility said in its fact sheet about the project., Lloyd’s Register Team up on Wind Substation off Danish Coast, Denmark’s transmission system operator, will work with experts from the consulting business of Lloyd’s Register to measure underwater sound propagation for the Horns Rev 3 wind farm substation development.

It is a collaboration that provides a critical approach on how to control noise transmission at sea, and will help to safeguard marine life as well as ensure a sustainable project delivery.

The 400 MW Horns Rev 3 wind farm off the west coast of Denmark is expected to generate green power for some 450,000 households when fully operational. The project will contribute to the EU goal of reducing carbon dioxide emissions by 2020-a key factor in the recent COP 21.

The Danish transmission operator will take on installation of the substation for guiding the electricity into the onshore power grid. The substation, scheduled for installation later in 2016, is to be positioned on a four-legged jacket that will be put in place by pile driving.

This activity generates noise levels that potentially could have a negative impact on marine life. Experts from Lloyd’s Register’s leading risk integrity, compliance and specialist risk consulting services group will undertake a pre-construction investigation and determine the site specific underwater sound propagation for the substation.

The consulting business of Lloyd’s Register will dispatch highly experienced acousticians to determine the site specific sound propagation. The team will deploy an airgun to trace an acoustic signal in proximity of the wind farm to determine the sound propagation. can then integrate the captured data in the project execution, making sure that the noise impacting on the nearby marine environment is considered and that mitigation measures are put in place should this be needed.

The investigation by Lloyd’s Register will adhere to the guidelines recently implemented by the Danish Energy Agency for Horns Rev 3 addressing the underwater noise impact from construction of offshore wind farms.

The first wind turbines at Horns Rev 3 are expected to be connected in 2017.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at

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