2.4   What Are Some Recent Major Issues Being Discussed by Regulators?

2.4.1 What Can Be Learned from California’s Smart Inverter Working Group Process?

On December 18, 2014, the California Public Utilities Commission approved the Smart Inverter Working Group (SIWG) recommendations that all new DER systems must support seven autonomous functions and must be capable of communications if deemed necessary by the utility (see 3.5.2).

However, when the SIWG process first started, the utilities, the DER manufacturers, and the DER implementers and aggregators filled the weekly discussions with their concerns. The utilities expressed concern about possible additional utility costs for managing “smart inverters”. DER manufacturers were concerned about any mandates that could increase their costs by forcing them to certify their products with any new requirements. DER implementers and aggregators were concerned that this would slow down their implementations and would impact their revenues from selling energy.

However, amazingly through weekly discussions and a workshop during the first few months, all of the stakeholders began to see the benefits of smart inverters. Utilities saw that the DERs could benefit voltage management and emergency handling on their distribution systems. DER manufacturers began to see that by providing smart inverters, they would be able to sell more products since utilities could handle more DER installations. In fact, since European utilities were already requiring many of these advanced functions, some of their products already included the functions but were disabled in the US. DER implementers and aggregators realized that they could not only sell energy but also be compensated for ancillary services. So these discussions changed from nervous and confrontational interactions to “How fast can we get this accomplished?”!  Although it took a little longer than originally planned, the time between the start of the SIWG in January 2013 and the approval of the Phase 1 functions by the CPUC in December 2014 was only 2 years.