Distribution System Upgrades

The District of Columbia Public Service Commission released for comment a proposed vision statement for modernizing the municipality’s distribution energy delivery system.

The proposal is part of an ongoing investigation by the commission to identify technologies and policies that can be implemented in the District to update the distribution energy delivery system for increased sustainability. The commission averred that it is committed, nearterm, to making the distribution energy delivery system more reliable, efficient, cost-effective, and interactive.

In its statement, the commission emphasized that it has a duty to ensure that rates for distribution service are just and reasonable and that balancing all affected interests, in the context of system modernization, can be particularly challenging when considering how costly distribution system improvements can be, especially since ratepayers may also be called upon to help subsidize renewable energy projects and distributed energy resource (DER) technologies.

Among other declarations, the document states that:

1. The commission recognizes that rapid technological change in the electric distribution industry increases the danger of “stranded assets” – capital investments that turn out to be unneeded; it thus warned that for that reason, before making investments in large capital projects, a utility must thoroughly examine the feasibility of non-wires alternatives as solutions to meet the stated investment objective at the lowest overall life-cycle cost, and the utility also must undertake “holistic” planning approaches that fully examine technological options that can be deployed at a pace and scale that can meet policy objectives and customer expectations; and
2. In the long run, the commission expects that, under fair interconnection procedures, DERs will be able to stand on their own in the competitive marketplace without subsidies from distribution ratepayers, such that the costs and benefits of any proposals to use distribution rates to compensate new DERs must be weighed carefully.

(Formal Case No. 1130, Order No. 19143)