Grid Modernization in
Minnesota
Presentation for More Than Smart Webinar
Chris Villarreal
Minnesota Public Utilities Commission
August 4, 2015
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Chris Villarreal
Director of Policy
Minnesota Public Utilities Commission
Chris joined the Minnesota PUC in May 2015 as its Director of Policy. In this role, Chris will provide policy research and
assistance to the Commissioners and analyze policy considerations for future and on-going policy development,
including on issues such as grid modernization and cybersecurity. With the Minnesota PUC, Chris is active in the PUC’s
on-going data privacy docket, as well as the e21 Initiative.
Chris is an active participant in many national grid modernization efforts, including NIST Grid 3.0 and the Smart Grid
Interoperability Panel. Chris is on the Board of Directors for the Smart Grid Consumer Collaborative, and is also on the
Board of Directors and the Executive Committee for the North American Energy Standards Board (NAESB). At NAESB,
Chris chairs the Energy Services Provider Interface (ESPI) Task Force which is the standard that supports Green Button.
Prior to joining the Minnesota PUC, Chris spent the previous 9 years at the California Public Utilities Commission as a
Senior Regulatory Analyst. At the California PUC, Chris worked on a variety of CPUC proceedings, including on Smart
Grid, data privacy and data access, cybersecurity, demand response, and rate design. Chris also authored several White
Papers on topics such as pre-pay, cybersecurity, and microgrids. Before the CPUC, Chris worked in Washington, D.C. as
an energy law paralegal focusing on FERC matters. Chris has a B.A. in History from Baylor University.
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Public Utilities Commission
 Regulates
 Permitting for power plants, pipelines, transmission lines
 Local and in-state long distance telephone companies
 Investor-owned electric and natural gas utilities – rates and
services
 5 Commissioners
 Appointed by the Governor
 Serve staggered terms
 Full time employment
 50 staff
mn.gov/puc 651-296-0406
1-800-657-3782
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Minnesota Electricity Overview
 5 IOUs, serve 1.5 million customers (about 65% of total sales)
 Average cost is under $.09/kwh
 Xcel is largest utility, serving Twin Cities
 Majority of electricity generated by coal, with nuclear, natural gas,
and renewables.
 26,000 AMI in Minnesota Power territory under ARRA grant
 Utilize Integrated Resource Plans to ensure utility meets customer
needs at reasonable cost
 Department of Commerce
 Oversees Conservation Improvement Programs
 CIP has spending and savings goals
 Clean Power Plan
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Why Minnesota?
 Time
 Not in reaction mode
 Can get out front
 Goals
 RPS
 Solar growing
 Location
 Not a coastal state
 Vertically-integrated
 Collaboration
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E21 Initiative
 Multi-stakeholder effort
 Not a Minnesota PUC initiated effort
 PUC is an observer
 Recognizes that grid and customer expectations are
changing
 Maintain utility revenues
 “Develop a more customer-centric and sustainable
framework for utility regulation….”
 http://www.betterenergy.org/projects/e21-initiative
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Goals of Phase 1
 Recognize that utility business is changing
 Shift from traditional utility business model (few
options) to new model (many options)
 Shift from traditional cost of service regulation…
 Rewards sales of electricity and new capital
 And to performance based
 Meet agreed-upon outcomes based on a set of
metrics or goals
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Phase 1 Report
 December 2014 Released Phase 1 Report
 4 Recommendations




Performance-based Ratemaking
Customer Option and Rate Design Reforms
Planning Reforms
Regulatory Process
 Grid Modernization
 Need for proactive planning for new distribution grid
 Future discussion
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A few details of Phase 1 Report
 Multi-year, performance-based ratemaking framework
 15 year Integrated Resource Analysis
 Replace existing integrated resource plan
 Develop methods to determine value of grid and DER
services
 Consider time variant rate structures
 Initiate a distribution planning process
 More efficient regulatory process
 More regulatory staff
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Phase 2
 Started in March 2015
 Develop details to implement Phase 1 recommendations
 Created three subgroups
 Performance-based ratemaking goals and metrics
 Integrated Resource Plan
 Grid Modernization
 Monthly meetings for full group
 More frequent meetings for subgroups
 Identify national trends and its impact in Minnesota
 Speakers from Synapse, RAP, and California ISO
 Goal is for new report in December 2015
 PUC remains involved in effort as an observer
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Meanwhile, at the MN PUC
 Opened proceeding on grid modernization in June
2015 (15-556)
 Three public meetings scheduled
 September 25: Minnesota’s utility distribution systems
 October 30: National efforts on grid modernization and
best practices
 November 20: Stakeholder perspectives, including current
distribution planning processes and suggested next steps
 Staff Report in mid-February 2016 on next steps
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Framing for MN PUC Process
 The Minnesota PUC’s grid modernization initiative will be designed
to address the following key questions:
1. Are we planning for and investing in the distribution system
that we will need in the future?
2. Are the planning processes aligned to ensure future
reliability, efficient use of resources, maximize customer
benefits, and successful implementation of public policy?
3. What commission actions would support improved
alignment of planning for and investment in the distribution
system?
 Other state policies
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Future Electric Grid
 Tomorrow’s grid will:
 Be more distributed, flexible, intelligent, real-time controlled, autonomous,
open and secure
 Be cleaner and reliable
 Operate resiliently against attack and natural disaster.
 Tomorrow’s distribution system will: –
 Enable a high level of integrated Distributed Resources, both supply and
demand side, with active participation by consumers;
 Manage two way flows of electricity;
 Provide for seamless integration and interoperability of varied systems and
components;
 Implement modern distribution management systems (DMS) including
advanced control and communications;
 Be planned in coordination with resource and transmission planning; could
incorporate stakeholder informed planning scenarios.
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Conclusion
Pro-active
Grid and customer demands are changing
Distribution grid planning processes becoming
more important
Minnesota is positioned to be a leader in this
national discussion
Come and participate!
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Questions?
Thank you!
Chris Villarreal
Director of Policy
Minnesota Public Utilities Commission
651-201-2222
chris.villarreal@state.mn.us
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