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Commentary Energy & Environment

Maryland PSC: We’re On It — Distribution System Planning Is Too Important to Rush

Pixabay.com photo.

By Jason M. Stanek

The writer is chair of the Maryland Public Service Commission, the state’s utility regulator.

In the recent op-ed “Remember Texas! Md. Needs Robust Electric Distribution Planning,” the People’s Counsel David Lapp argues in favor of legislation to prescribe how we plan the electric grid of the future. Unfortunately, Mr. Lapp’s article and the legislation he references, House Bill 88, exhibit fundamental misunderstandings of distribution system planning, which is an incredibly complex undertaking that will require rigorous analysis and input from many parties if we are to get this right for Maryland.

I agree with Mr. Lapp on many points. First, as we were reminded by the events in Texas last February, keeping the lights on is essential to the fabric of a modern society. Electric reliability is essential to health, public safety, economic development, and simply living our lives. We also agree that the Maryland grid and the utility planning processes must evolve to support our state’s policy goals addressing climate change, environmental justice, and increased electrification. These issues are a top priority at the Maryland Public Service Commission. However, the article draws an erroneous connection between Texas’ failure to generate sufficient power and how we can better design an electric grid to move that power.

There is no question that improved, and more transparent grid planning will support adoption of renewable and distributed energy resources such as batteries and rooftop solar. Inclusive and creative system planning that considers non-wires alternatives can minimize unnecessary system investments. The distribution grid, if thoughtfully planned, can support deep decarbonization efforts by ensuring the grid is ready to support an influx of electric vehicles and other transitions away from fossil fuel resources. Unfortunately, the proposed legislation advocated by the author does not give the PSC and stakeholders the flexibility to thoroughly explore how to achieve these benefits in a timely, affordable, and effective manner.

Over the last six years, the Maryland PSC has consistently pursued grid modernization efforts and I respectfully disagree that legislation is necessary to ensure timely action. During my time at the commission, in the absence of legislation, we have updated our interconnection and reliability regulations, pursued supplier consolidated billing, launched electric vehicle pilots, developed an energy storage pilot program, transitioned to multiyear utility rate plans, and directed utilities to propose incentive mechanisms to align their performance with state policy goals.

We have accomplished all of this through collaborative, public processes. The PSC’s accomplishments are partially due to the work and input of our fellow state agencies, Maryland utilities, and local and national policy advocates. I am proud of our inclusive processes and our track record of consistent progress.

As drafted, the proposed legislation would codify a list of requirements for distribution system planning that is incomplete, potentially contradictory, and likely subject to change in the near future. We’ve all heard the adage that you can have something done well, done fast or done cheap – but it’s nearly impossible to have all three. We need the time to get this done right if we want to make thoughtful system investments at least costs.

We also need the flexibility to react to the rapidly changing technologies and economics that will allow the distribution system to support broad decarbonization. Lastly, answers that seem clear today may not be the best options in the future – it’s impossible to imagine all the doors that will open in the next two decades.

Grid modernization and adaptation to climate change are too important, and too complex, to tie the commission’s hands to particular outcomes without due consideration. Moreover, contrary to the suggestion that the PSC is “reluctant” to develop regulations, the PSC currently has a careful, deliberative and public process underway to inform the drafting of distribution system planning regulations — and that process should be allowed to continue. In my opinion, based on decades in the industry, rushed efforts pose a risk of wasted resources, increased costs to all rate payers and regrettable distribution system investments – precisely what I believe the People’s Counsel is trying to avoid.

Despite sharing many of Mr. Lapp’s stated goals – a modern grid that aligns with state policies, increased transparency and better investment decisions that save customers money – there is one area where we simply disagree. The PSC has never “overlooked” its responsibilities to ensure safe, reliable and affordable service. Maryland’s utilities hold the franchise to provide safe and reliable service; they own the distribution system infrastructure; they operate their utility systems. The utilities must remain in primary control of their planning processes. As an independent regulatory agency, the PSC will make its expectations known, reward or penalize performance as appropriate, and continue to work in partnership with our public service companies and other state agencies as we have for over 110 years.