Nevada tops new CUB state rankings on utility affordability, reliability and environmental responsibility

Diving Brief:

• According to an inaugural Citizens Utility Board (CUB) report, Nevada, Washington and Idaho are the top three states in terms of utility performance in terms of affordability, reliability and environmental responsibility. Hawaii, Alaska and West Virginia rank last on these measures combined among all states and the District of Columbia.

• Using federal data, the report — “Electric Utility Performance: A State-by-State Data Review— aims to track the progress of utilities through the energy transition, according to CUB, a Chicago-based ratepayer watchdog organization. Among its findings, the ranking indicates a weak link between investments in advanced metering infrastructure ( AMI) and reliability in certain states. , specifies the group.

• “You can’t improve what you don’t measure” David Colata, executive director of the CUB, said in an interview on Friday. “We want to make this data more accessible. We think it’s important, as we start to think about the energy transition, to document how it works.”

Overview of the dive:

CUB’s report comes as investor-owned utilities are is about to spend about $140 billion a year in capital spending over the next two years, up from about $79 billion in 2011.

Duke Energy, for example, plans to spend more than $130 billion over the next 10 years, with $63 billion in planned spending over the next five years, said Steve Young, executive vice president and chief financial officer of Duke, February 10. a quarterly earnings call with investor analysts.

More than 80% of Duke’s capital plan through 2026 will fund investments in “fleet transition” and modernizing the company’s network, according to Young. The plan puts Duke on track to grow its rate base by 6.5% to 7% per year, Young said. Duke has utilities in Florida, Indiana, Ohio, North Carolina and South Carolina.

The CUB hopes regulators, policymakers and stakeholders can use the group’s report, which is expected to be updated annually, to monitor utility performance during the energy transition, according to Kolata.

“We need to move beyond just, ‘Okay, here’s how much utilities are spending,’ and we need to move towards, ‘What are we actually getting as a result?'” Kolata said. What about our bills, what happens to our environmental performance and what happens to our reliability? And if we see that rate base increasing, but we don’t see any improvement in reliability or environmental performance, that raises some pretty deep questions.”

The report is based on 2019 data from the Energy Information Administration, Environmental Protection Agency, Census Bureau and other federal agencies, according to the CUB.

Further research is needed to determine what specifically drives the ranking results, according to CUB. However, the group said some tentative conclusions could be drawn from the report.

The report found that some states heavily reliant on coal generation, such as West Virginia and Indiana, had below-average affordability measures, debunking the idea that fossil fuel generation is generally less expensive than other energy sources, according to CUB.

State rankings indicate that the link between AMI and reliability is not necessarily strong, according to CUB. Some states that have launched AMI upgrades, such as Nevada and Florida, are doing relatively well, but states like Michigan, Oklahoma, and Ohio that have invested heavily in network modernization blame a lag in reliability performance, CUB said.

“While this is likely a necessary condition for future improved resiliency, it appears that smart grid infrastructure alone is not enough to improve reliability,” CUB said.

Additionally, CUB found that many states with the lowest per-unit electricity costs have some of the highest average residential bills.

The difference is partly caused by weather conditions, but energy efficiency and other clean, cost-effective energy resources reduce electricity bills over time, especially in restructured states, according to the CUB.

“Consumers ultimately pay the bills, not the rates, so analysis of any program or set of policies must look at the impact over time on energy bills,” CUB said.

States that tend to be at the top of a category often perform very well across all categories, CUB said in the report. The same pattern appears for states at the bottom of any metric. “While this requires further investigation, it suggests an interrelated socio-political landscape producing consistent results,” CUB said.

In future reports, CUB intends to take a closer look at the factors that drive utility performance results, according to Kolata.