How will the utility of the future successfully serve next-generation customers? During today's OnPoint, Heather Rosentrater, vice president of energy delivery and customer service at Avista, a medium-sized utility operating in Washington state, discusses her company's untraditional approach to developing and implementing innovative grid technologies.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Heather Rosentrater, vice president of energy delivery and customer service at Avista. Avista is a medium-sized utility operating in Washington state. Heather, thank you so much for joining me today.
Heather Rosentrater: Absolutely. Thanks for having me.
Monica Trauzzi: Heather, Avista is trying to do things differently, taking steps away from the traditional utility business model and hoping to begin to shape the utility of the future. What separates your model from that of other utilities?
Heather Rosentrater: Well, to start, we have a history of innovation. That's what attracted me to Avista in the first place almost 20 years ago. We had a fuel cell subsidiary called Avista Labs at the time, which we recently sold to Plug Power. We've just historically tried different things. Really looked at advancing technology and tried to solve problems with it.
We started Itron in the mid-'80s trying to solve problems and started a company called Ecova that used data analytics to solve customer problems, which we just sold last year as well.
We right now are looking at continuing to take advantage of economies of scale that utility industries have typically done, but with the new distributed energy resources and assets at the edge of the grid, we're looking at a new model to add of economies of scope. So it's looking at different value streams on the same asset. So something like a battery can have a value stream of creating additional reliability for customers and also creating value through charging when prices are low and discharging when prices are high. It can also have value around supporting voltage on the system and supporting frequency on the system.
Monica Trauzzi: Is that ultimately what you think the future utility business model across the country will look like?
Heather Rosentrater: I think it will be a piece of the future of the utility industry is really taking advantage of these advancing technologies on the edge of the grid for multiple values for customers.
Monica Trauzzi: How has your planning changed as a result of the Supreme Court's stay of the Clean Power Plan? Does that affect any of your near-term plans?
Heather Rosentrater: Well, I wouldn't say that our planning has changed. We're definitely watching what's going on and trying to understand how it will impact us, but what we've historically done is tried to be proactive in taking advantage of advancing technology for our customers and analyzing different scenarios from an economic perspective of what makes sense given different policies, different regulations for our customers and making sure we're prepared for whatever the future looks like.
Monica Trauzzi: So we hear from many utilities that they need certainty from regulators, and certainly the Clean Power Plan would give that. Do you not put yourself in that column? Do you feel that Avista is creating its own certainty?
Heather Rosentrater: I think it's hard to get certainty. So we are trying to be prepared for multiple different scenarios that the future could look like and really looking at the technology and piloting at different technologies to understand what are the different benefits we can provide to our customers based on continuing advances.
Monica Trauzzi: So in Washington air regulators are currently working on a new proposal to cap greenhouse gas emissions. What are you looking for in that new proposal?
Heather Rosentrater: Well, we have a team who continues to participate in the discussions and is looking at what impacts to our customers there would be with the different scenarios. From a technology side, we really continue to focus on testing the different technologies making sure that we can understand and apply values to the different tests that we're doing for our customers and looking at not just one value for an asset, but looking at the multiple value sets that we can provide to our customers.
Monica Trauzzi: So you mentioned the energy storage project that you're currently working on. You are testing seven different scenarios. What are the different scenarios, and why are you going this route with the testing?
Heather Rosentrater: So we think that an asset like a battery, we really should be utilizing it every minute of every day depending on the different conditions. So if we're seeing in the springtime like we do when we have a lot of hydro in our area that sometimes prices can go negative and so we should be charging at those times and discharging when the prices are higher.
But then also if we see from a weather forecast that a storm is coming to an area, then that scenario, that use case would actually be prioritized above the price arbitrage use case. So we would make sure that the battery was charged to be prepared for a possible outage that could be coming to support an area.
Another use case that we've actually practiced this last summer was when we had one of our peaks on our system and we wanted to see if we could actually reduce the peak on that circuit by charging in the off-peak hours and discharging during the peak, and we were able to see the benefit of reducing the load on our system.
Monica Trauzzi: How large is this energy storage technology? One of the things we hear about when we talk about battery storage is that it's not on a large scale, enough of a large scale. So how big is this one?
Heather Rosentrater: This one's 1 megawatt and 3.2 megawatt-hour vanadium flow battery.
Monica Trauzzi: Your company recently filed requests with Washington utility regulators to increase electric and natural gas rates. What's behind that rate increase request, and what are the capital investments that you're hoping will justify that increase?
Heather Rosentrater: Well we continue to modernize our grid. We have aging assets that we continue to need to replace. So that drives a lot of the request. That's why we're looking at these pilots is what can we do to understand better life-cycle costs for our assets? A lot of our assets are 40-year assets on the system, and we want to make sure that we're understanding the full life-cycle cost of those assets. So we do a lot of analysis in that respect.
Then we want to look towards the future and make sure that we're prepared to use advancing technologies to support our customers and help minimize rate impacts into the future.
Monica Trauzzi: Is the request though demonstrating that some of the advanced and disruptive technologies in many cases that are being debated throughout the country are significantly more costly than business as usual?
Heather Rosentrater: I think there's a lot of drivers that are impacting rates right now. What specifically is in our most recent rate case is really around the aging infrastructure and replacing our existing assets.
Monica Trauzzi: We'll end it right there. Thank you so much for your time. Thanks for coming on the show.
Heather Rosentrater: Thank you.
Monica Trauzzi: Thanks for watching. We'll see you back here tomorrow.
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