Our Set of Proposals to Enable a Distributed Energy Future for All

We view distributed generation as an opportunity to make our nation’s power grid more flexible and ultimately to better serve our utility customers. That’s why we are investing in solar technology and have installed approximately 90 megawatts of rooftop solar generation on warehouses over the past few years as a way to encourage growth of the emerging solar industry.

The primary challenge is how to get from where the industry stands today to the distributed-energy future, while ensuring that electric service remains safe, reliable, and affordable for all utility customers. We have been working on a set of proposals designed to enable a distributed energy future for all customers.

These ideas involve technology and infrastructure investment, regulatory reforms and new business models.

At Edison International, we view distributed generation as an opportunity to make our nation’s power grid more flexible and ultimately to better serve our utility customers.

About Distributed Generation

“Distributed generation” is a term that refers to power generators, typically smaller than one megawatt, located at or near customer sites—such as rooftop solar panels, natural gas-fired micro turbines, combined heat and power systems, wind turbines and fuel cells. These sources provide customers with an alternative to receiving their electricity solely from large, centralized power plants.

Implications of Distributed Generation: Technology & Infrastructure

Utility customers with solar panels rely on a reliable and modernized electric power grid, as much as, if not more than, traditional customers. They require a grid capable of enabling two-way flows of electricity when, for example, their solar generator feeds power back into the system.

Illustration: homes with solar panels still rely on the utility grid (PDF)

Integrating Distributed Generation Resources with Smarter Grids

Distributed generation requires a grid that is not only capable of remaining stable while managing two-way flows of electricity, but also capable of offering customers flexibility and choice. So smart technologies must be integrated – from digital meters to smart appliances, smart inverters, and plug-in electric vehicles.

Smarter grids at Southern California Edison

A Distributed Generation Future & Rate Reform

Rooftop solar and other distributed energy sources present important fairness questions about who pays for the shared system costs. When customers use their rooftop solar array to self-generate a portion of their total electricity needs, they receive less power from the grid. However, they must remain connected to the grid to supply electricity when the sun isn’t shining or their system isn’t generating enough to meet their needs, or when their generators feed power back into the system.

Because certain rates have subsidies for solar and other distributed energy, they shift a portion of the fixed cost of the system to all the other customers who don’t have solar. The current system of subsidies for distributed energy has distorted the true costs of these technologies and created inequities between customer groups. That is why we are working with state regulators to improve our current rate design. Our philosophy is that electric rates should as much as possible reflect the true costs of providing electric service.

Distributed Generation & New Business Models

We in the utility business have decades of experience in delivering electricity and are eager for the chance to develop new and better ways to serve customers. Current regulations limit how we can participate in these new technologies. We believe regulators should allow utility companies — either directly through their regulated utilities or affiliated competitive companies — to participate in distributed energy markets through direct ownership, partnerships, or other means.

The way electric power is generated, distributed, and used is likely to change a great deal in the next 10 to 20 years. That’s why we are looking for opportunities to find new and better ways to serve our utility customers today.