May 20, 2015: Legislation Introduced That Promotes Distributed Energy Resources
Bill Creates a Framework to Support Greater Implementation
WASHINGTON — Sen. Angus King, I-Maine, a member of the Senate Energy and Natural Resources Committee, has introduced The Free Market Energy Act of 2015, legislation designed to help promote distributed energy resources in the United States.
“Whether it’s solar panels on the roof or battery storage in the basement, advanced technologies are unlocking America’s energy future by literally bringing power to the people. But policies governing how these technologies connect to and interact with our nation’s electricity grid are stuck in the past and, as a result, are holding back the enormous potential for these technologies to flourish,” said King. “My legislation would create a set of guidelines with deference to the states to protect the right of people to connect their technology to the grid, ensure that grid-owners and operators receive their due compensation, and support the continued development of energy resources that will define our future. I look forward to working with my colleagues, industry stakeholders, and utility companies as we move forward on this important issue.”
America’s electric grid has remained relatively unchanged over the past 100 years, but new technologies are beginning to fundamentally transform the way electricity is generated and delivered. Distributed energy resources (DER), which can include generation, storage, efficiency, and demand response, among others — are being deployed at the edge of the grid, helping to create a more secure and resilient electricity system.
However, antiquated policies governing how these new technologies interact with the grid are leading to problems that are largely being addressed in an inconsistent manner around the country and, as a result, are discouraging investment in DER. For example, utilities can levy expensive grid-connection fees that disincentivize consumers from pursuing newer technologies while, without a more complex electricity rate design, simplistic net metering formulas may not properly compensate grid-owners when these new technologies are connected.
The Free Market Energy Act of 2015 would establish a set of parameters for the governance of distributed energy resources and retain the authority of each state to design its own set of rules within those parameters to properly reflect the state’s needs. Importantly, the parameters would protect the right of consumers to connect their distributed resources to the grid for a reasonable price while also ensuring that grid owners and operators receive proper compensation through a more sophisticated electricity rate design that would maximize the potential of distributed energy resources in relation to the grid.
By establishing the criteria for these new technologies, King said the legislation would provide important guidance to the states, allow for the continued development of these technologies and the jobs they support, foster energy independence at the personal level, and bolster national security by making the electricity grid more resilient.
Publication date: 5/18/2015