The Distributed Capacity Procurement Framework: A Practical Roadmap for Procuring Distributed Energy Resources to Boost Energy Affordability and Grid Reliability

Utility regulators, grid operators, and energy policy leaders around the country broadly agree that distributed energy resources (DERs) like solar and storage are important for developing a reliable and affordable electric grid.

The real question is: what’s the best way to procure and deploy DERs to maximize their benefits to utility customers and the grid?

The Distributed Capacity Procurement (DCP) Framework whitepaper, authored by Current Energy Group on behalf of SEIA, answers that question, providing a practical roadmap for regulators and policy leaders working to build a 21st-century grid that can meet the needs of the 21st-century economy.

The whitepaper outlines three procurement pathways that can bolster available resources, respond to growing loads, and provide a faster, more cost-effective response to infrastructure needs.

The paper also outlines 10 key principles and accompanying policy tools to turn the DCP Framework into practical action using implementation tools that regulators already have. Two of the principles guiding the proposed procurement pathways are: 1) use the least restrictive pathway that meets the need, and 2) make third-party-owned or customer-owned DERs the default, with utility-owned resources considered only in limited cases.

Competitive procurement of third-party-owned DERs can lower electricity bills in many ways, including by reducing utilities’ reliance on higher-cost wholesale market purchases to meet capacity needs. Third-party or customer-owned DERs are also the fastest way to add new electrons to the grid at a time when grid operators and regulators are grappling with the challenge of meeting fast-rising demand.