A first-of-its-kind proposal to allow private industry to synchronize electric customers’ smart devices and receive compensation for helping utilities operate the electric grid more efficiently was unanimously approved by the Arizona Corporation Commission (ACC).
If successful, Arizona would be the first state to permit third-party providers to aggregate and control a portfolio of potentially millions of smart devices that large utilities could use to more efficiently allocate and store energy for the grid.
That could result in lower electric bills for homes and businesses and generate new smart technologies and industries here in Arizona, said Lea Márquez Peterson, the new chair of the utility regulating commission who introduced the proposal.
Márquez Peterson and her fellow commissioners voted to give the state’s largest electric utility, Arizona Public Service (APS), the go ahead to develop a “tariff” for the project — a plan that lays out the structure, fees and other parameters of the program — and move it forward after board review and approval.
“The proposal allows aggregators of all kinds and technologies to participate in APS’ tariff, opening the door to potentially untapped market opportunities and economic development,” Márquez Peterson said. “Previously, rooftop solar was the only tool in the distributed energy toolbox.
“But now, we have so much more. Air conditioners, appliances, devices, and batteries, even entire homes, as long as they are connected to the internet, can now be called upon to shift and respond to the grid. That’s extremely valuable.”
Tapping into millions of smart devices to benefit grid
These electric grid resources could include an array of smart devices and energy efficiency improvements, such as internet connected ‘smart’ thermostats and ENERGYSTAR appliances, as well as at-home batteries.
Through aggregation, they can help to reduce the total cost to the grid by reducing or shifting the time of energy used, reducing the amount of power needed during the most expensive times of day, utilizing or storing more power during the most affordable times of day, or otherwise improving the operating efficiency of the grid.
Companies, customers benefit based on value they provide
The third party companies providing the service for APS, potentially other utilities in the future, would be compensated for the value each provides to the grid. This would include compensation for the value of energy, capacity, demand reduction, load shifting, voltage support, and other ancillary services, to name a few, the chairwoman said.
Consumers participating in the program also would be compensated based on the value they provide.
“Our smart infrastructure, combined with Arizona’s digital connectivity and demand curve, which is unique to the Western United States, makes the Desert Southwest, and Arizona specifically, the perfect place to study demand-side optimization and lead on cutting-edge energy innovations and regulatory policies,” she said.
New chair brings business approach to regulatory body
Márquez Peterson, who is the only commissioner based outside of Maricopa County, brings a strong business background and education with her to the utility-regulatory commission.
Before being appointed to the commission in 2019 and her recent election in November, she served as the president and CEO of the Tucson Hispanic Chamber of Commerce and executive director for Greater Tucson Leadership.
She was the owner and operator of a business brokerage firm and a chain of six gasoline station-convenience stores in the Tucson region. She earned her undergraduate degrees in Tucson in marketing and entrepreneurship from the University of Arizona, and her master’s degree in business administration from Pepperdine University in California.
Among the many boards she serves on are the Pima County Workforce Investment Board, University of Arizona Foundation, president of the National Association of Women Business Owners in Tucson, and a member of the national U.S. Small Business Association’s Small Business Development Council advisory board.
Calling on stakeholders to participate in proposal
Stakeholders such as technology companies, consumer product manufacturers, and third-party aggregators that are involved in providing energy services or devices for the grid such as battery storage, energy efficiency, smart devices, smart appliances, internet of things, home energy monitoring devices, and ancillary services interested in getting involved in the development of the project, go to: Márquez Peterson’s office.
A copy of the proposal can be viewed here.
About the Arizona Corporation Commission
The ACC was established by the state constitution to regulate public utilities and business incorporation. The commission is Arizona’s co-equal, fourth branch of government. The five Commissioners elected to the Corporation Commission oversee executive, legislative, and judicial proceedings on behalf of Arizonans when it comes to their water, electricity, telephone, and natural gas resources as well as the regulation of securities, pipeline, and railroad safety. To learn more about the commission and its commissioners, visit: http://azcc.gov.