A 51st State Initiative Update: Phase 2 — Getting over the big wall

By K Kaufmann

UPDATE: Want to read the ideas SEPA received for its 51st State Initiative? They will be posted for all to read and comment on, beginning Friday, March 27,  on www.sepa51.com. Read more here.

As renewable energy becomes a larger part of the power mix across the country, utilities and the policy makers who regulate them face a seemingly insurmountable wall between existing energy markets’ 100-year-old business models and a range of emerging visions for the future.

Graphic courtesy of Kathy Sierra

Getting over that “big frickin’ wall” is what the Solar Electric Power Association’s (SEPA’s) 51st State Initiative is all about, said Julia Hamm, the educational nonprofit’s President and CEO, speaking at a breakfast at the National Association of Regulatory Utility Commissioners winter conference in Washington, D.C.

SEPA’s original goal for the initiative was to challenge solar and utility industry stakeholders and other innovators to come up with ideas for building an energy market from the ground up, as if for a 51st state with no regulatory or market structures in place. A varied energy portfolio, including robust solar and other distributed generation resources must be part of each proposal.

Check out the 51st State Initiative website here.

Now, with 40 groups and individuals working on ideas for an upcoming Feb. 27 deadline, SEPA has expanded its vision for the project. Once a distinguished panel of industry thought leaders has picked three to five concepts for further development, SEPA will launch a second phase of the initiative, Hamm announced at the breakfast on Feb. 16.

“Our next challenge will be to ask people to apply one of the top 51st State concepts to a real-life situation — for example, a specific state or market structure — and develop a practical road map for implementation,” Hamm said.

“Our goal for the 51st State has always been to develop a set of core concepts that could be adapted to local conditions,” she said. “The Phase 2 road maps are aimed at taking that next step so utilities, regulators and other policy makers have a more tangible set of of options to work from.”

“I thought (the initiative) was extremely intriguing,” said Dan Delurey, CEO of the Association for Demand Response and Smart Grid, a Washington, D.C.-based nonprofit. “In the electric sector, you sort of have a situation that is so status quo-oriented . . . and now you have the new technology coming in, and the structure and regulations are not designed for what’s coming into play. This is a new way of getting at a new end state instead of what would we change.”

“Phase 2 would be the really exciting part. It makes it less of an academic exercise and more about tackling real world problems,” said James Tong, Vice President of Strategy for Clean Power Finance, a finance and software company serving the residential solar sector, “It forces us to think about how the proposed concepts can be relevant and how they might be implemented.”

Stephen Bennett, senior manager in external affairs for PPL EnergyPlus, a retail electricity and natural gas provider based in Pennsylvania, said he will be looking for road maps that cover states with restructured markets. According to the U.S. Energy Information Administration, these markets — where consumers can chose among retail power providers, which are separate or “decoupled” from transmission and distribution entities — now exist in 15 states, including several where PPL does business.

“We have such a varied landscape as far as markets for electricity are concerned across the U.S.,” Bennett said. “It’s a very different discussion when you’re talking about solar or solar regulations in restructured versus non-restructured states.

“My hope would be that somewhere in the roadmaps someone will be looking to optimize the advantages of restructured markets — the competition, the customer choice — to come up with a plan where you’re leveraging competition rather than disrupting competition,” he said.

More details on Phase 2 will be forthcoming, Hamm said, but she expects this next stage of the project to launch in the second half of 2015.

In the meantime, SEPA plans to have all the concepts it receives posted online by early March and will hold a 51st State Summit on April 26-27 in San Diego. Featured summit participants will include all five members of the Innovation Review Panel and the lead authors of the top concepts.

The review panel members include Ron Binz, a consultant and former Chair of Colorado’s Public Utilities Commission; Nancy Pfund, Founder and Managing Partner of venture capital firm DBL Investors; Jim Rogers, former Chairman and CEO of Duke Energy; Jigar Shah, clean tech entrepreneur and founder of SunEdison, and Sue Tierney,Senior Advisor at Analysis Group in Boston and former Assistant Secretary for Policy at the U.S. Department of Energy.

Read detailed bios of the Innovation Review Panel members here.

The event will be by-invitation-only, but some portions of the summit may be either recorded or live-streamed.

Webinars and presentations at other industry conferences, including Solar Power International in September in Anaheim, are also in the works.

“Before we even start Phase 2, we want to get these ideas in front of as many audiences as possible — both in and outside the industry — to get feedback and spark discussions,” Hamm said. “We won’t get over the wall without that kind of collaboration.”

Tong,  who is one of a team working on a submission for the initiative, agreed that broad stakeholder participation will be critical for “getting the various sides at the table — regulators, utilities, consumer advocates and distributed energy resource companies, from solar to storage to electric vehicles — getting them to come with an open mind, to really understand the issues.

“It’s not one side’s problem,” he said. “Everybody uses the grid. It’s a challenge everyone has to tackle.”

K Kaufmann is Communications Manager at SEPA. She can be reached at [email protected].