October 16, 2025 • 51 mins
#Ep313
Grid modernization is accelerating across America. In Q2 2025 alone, 48 states plus DC and Puerto Rico took 468 actions to modernize their grids through energy storage, microgrids, and virtual power plants. This shift is reshaping how utilities deliver reliable, resilient power.
Today on the Clean Power Hour, Tim Montague speaks with Vincent Potter, Policy Project Manager at NC State Clean Energy Technology Center, about the latest 50 States of Grid Modernization report. Potter tracks policy developments across all 50 states every quarter, providing unmatched insight into how states are transforming their grids from centralized, one-way systems into decentralized, interactive networks that integrate distributed energy resources.
Key Highlights:
- 41 states took action on energy storage in Q2 2025, making battery deployment a nationwide priority
- Self-healing grid technology is now deployed in major population centers, allowing utilities to reroute power around failed transformers
- Virtual power plants are emerging as non-wires alternatives that reduce utility capital investments
- Performance-based regulation is shifting utilities from guaranteed returns to outcome-driven compensation
- Microgrids are moving from niche pilots to mainstream resilience tools in Hawaii, Oregon, Texas, and West Virginia
- Time-of-use rates and advanced metering infrastructure are enabling smarter energy consumption patterns
- Equity and environmental justice are being incorporated into resilience planning in states like Maryland, New York and Illinois
The grid is evolving faster than most people realize. To stay informed about clean energy policy and technology, subscribe to the Clean Power Hour and visit cleanpowerhour.com for more resources.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Vincent Potter (00:00):
I think that looking at grid modernization
(00:02):
and how the grid evolves, as yousaid, it used to be kind of one
directional and it was very muchgeneration. Station goes through
transmission, goes throughdistribution and gets to the
households. And now withincreasing penetration of
distributed energy resources, aswell as more kind of usage
intensive devices, whether theybe home, located, energy
(00:23):
storage, public EV charging,induction stoves or other kind
of beneficial electrificationapplications, we're seeing a lot
more demands on the grid, sosome of it is advanced metering
and two way flow of informationup to two way flow of electrons
(00:44):
themselves.
intro (00:45):
Are you speeding the energy transition here at the
Clean Power Hour, our host TimMontague, bring you the best in
solar batteries and cleantechnologies every week. Want to
go deeper into decarbonization.
We do too. We're here to helpyou understand and command the
commercial, residential andutility, solar, wind and storage
industries. So let's get to ittogether. We can speed the
(01:07):
energy transition
Tim Montague (01:11):
today on the Clean Power Hour grid modernization,
meaning a smart grid, meaningmicro grids, things that are
good for resilience. The grid ischanging. It used to be, it just
kept the lights on, and now itneeds to do a whole lot more. My
guest today is Vincent Potter.
He is a Policy Project Managerat NC State. He is part of the
(01:32):
North Carolina clean energytechnology center. They also run
desire, which you solarprofessionals are very familiar
with. They track all of thepolicies going on relevant to
ders and clean energy. And we'regoing to be geeking out on their
recent report, 50 states of gridmodernization. Q2, 2025, welcome
(01:55):
to the show Vincent,
Vincent Potter (02:00):
and thanks so much for having me looking
forward to our conversation.
Tim Montague (02:04):
Yeah, I'm totally pumped to have such a storied
professional and organization onthe show. So this is a very long
report. It's like 140 pages. Itis a subscription service that
you guys offer so you can'taccess the full report without
(02:26):
buying it, but you you can getan executive summary at their
website. And so let's just setthe stage a little bit Vincent
your team tracks gridmodernization across all 50
states, every quarter. And fromyour vantage point, how would
(02:46):
you define grid modernization in2025 and why is it such a
critical lens for policy makersand practitioners today?
Vincent Potter (02:58):
It's a really interesting question. I think
that looking at gridmodernization and how the grid
evolves, as you said, it used tobe kind of one directional and
it was very much generation.
Station goes throughtransmission, goes through
distribution, gets to thehouseholds, and now with
increasing penetration ofdistributed energy resources, as
well as more kind of usageintensive devices, whether they
(03:20):
be home, located, energystorage, public EV charging,
induction stoves or other kindof beneficial electrification
applications, we're seeing a lotmore demands on the grid, so
some of it is advanced meteringand two way flow of information
up to two way flow of electronsthemselves. So a lot of new
(03:44):
things that we're figuring outhow to make the grid do and
trying to do it with less aswell.
Tim Montague (03:56):
When you say we're trying to do it with less, what
are you referring to?
Vincent Potter (04:00):
Well, if you look at some of the technologies
that we use to advance or thatutilities use to advance the
grid right to make it smarter,as it were, some of it is
looking moment to moment at whatyour transmission lines are
doing or your distribution linesare doing to see if you can
actually put more electronsthrough that. So if the weather
(04:23):
conditions or if the loads areconducive to not having to
invest that the Center Researchis a lot of what are called non
wires, alternatives toinfrastructure development. So
it's ways for utilities,transmission operators,
distribution operators, toreduce their capital investments
(04:46):
by using software solutions,strategically located storage or
other ders to make the powerflow more seamless and do it
kind of behind the scenes as a.
Opposed to building more andmore transmission.
Tim Montague (05:03):
So we're seeing the grid evolve from being a one
way centralized system to a moredecentralized, interactive
network. Where are we in thattransition, and what are the
largest drivers of urgency forthat transition?
Vincent Potter (05:22):
So we're in the thick of it. So in the what
Obama administration, with theAmerican rescue and recovery
act, I believe we started a lotof advanced meter infrastructure
deployment. Now advancedmetering is smart meters
deployed at, you know, kind ofpeople's homes and places of
(05:42):
business, and that's the that'sthe groundwork of the smart
grid, knowing what is happeningat every point in your grid, as
opposed to just measuring it atthe substation or measuring it
at your generator. So we are, weare beyond that part. In most
parts of the country, mostutilities are on their kind of
AMI, advanced meteringinfrastructure, 2.0 or sometimes
(06:05):
even 3.0 getting those meterssmarter and smarter so that they
can get the informationnecessary to make these kind of
more advanced decisions. We seesome advancement from the
regulatory perspective coming infor distribution system planning
or resource planning processesthat require implementation of
(06:26):
some of these technologies. Someof the stuff we're talking about
is fault location, isolation andthen service restoration. So
you'll have a whole bunch ofnodes that are reading so you
can actually find ways toreroute power past a transformer
that has failed in many parts ofthe country, you will see new
labeling on the transformers. Ifyou're an energy dork like me
(06:49):
and my children, we go and welook at the labels that are on
the boxes as we take our walks,and we'll see like self healing
grid or self restoring grid inseveral like large yellow
letters on these service boxes.
And so this is one of thoseupgrades, right? So if this pole
goes down, the electricity canactually be rerouted around it
(07:12):
to maintain service. So we seesome of that, and then we see
the continuing application ofenergy storage and other
hardware solutions, so advancedrelays and that kind of stuff
within the substations to getpast congestion. So you'll have
kind of ways to pool energy at apoint where you know you're
(07:34):
going to need it a lot, in themid afternoon, late afternoon
and summer times, for example.
Tim Montague (07:42):
Thank you. So the q2 report catalogs 468 actions,
I believe, across 48 states,plus DC and Puerto Rico, which
trends stood out to you the mostthis
Vincent Potter (07:56):
quarter. So a lot of it, a lot of the
regulation, is moving moretowards performance based so so
utilities being required to havecertain performance thresholds
or offer programs thatcompensate compensate various
entities for their performancewithin so if we're talking about
(08:16):
a demand response program or aload reduction program, you
would find compensation for theamount of demand you deferred or
the amount of load you couldshed. We're seeing a lot of
movements in the energy storagespace. Currently, New Jersey has
a new energy storage incentiveprogram that they've put out for
straw proposal through the lastyear and a half, and seems to
(08:39):
it's finalized. Now they're kindof moving out the procurement
window. I think they've pushedit out a month, a month and a
half, to kind of feel, feel outwhat the federal situation is
going to settle out in. And thenvirtual power plants have been a
big thing, and then trying tofigure out what to do with data
(09:00):
centers and how to make surethat reliable power can be
provided to large load customerswithout adversely impacting
other customers.
Tim Montague (09:13):
So I was able to identify three trends, two of
which you mentioned explicitly,energy storage. 41 States took
action in this quarter. Are youseeing states converge on common
approaches like mandates,incentives, interconnection,
reforms? Let me finish mythoughts. So I found three
(09:36):
trends, energy storage, microgrids and virtual power plants,
which two of the three youmentioned, but this energy
storage trend, it's no longerjust California and Texas and
Hawaii like there's a lot ofstates doing a lot of different
things. Are they all just dogpiling on to what California has
(09:58):
done?
Vincent Potter (10:01):
I'm not entirely a lot of regulators and
legislators are recognizing thevalue of energy storage.
Sometimes it's as a complementto existing renewable resources.
Other times it is a non wiresolution. So looking at what we
would call front of meter energystorage, so stuff that's on the
(10:21):
utility transmission ordistribution grid, but still
located near large loads, sosubstation, energy storage and
that kind of thing. We're seeingsome you mentioned
interconnection reform, andwe're seeing some modifications
in proposed interconnectionrules that would allow Co
(10:42):
Location of like battery, energystorage with wind or solar in
some states, as long as youwithout requiring a new
interconnection review, as longas you don't inject to the grid
more than your nameplatecapacity. So that would allow
some arbitrage in that so ifyou've got a wind power producer
that's producing a lotovernight, you could then store
(11:04):
some of that energy to dischargeto help allay peak demands. Same
thing with solar, you know, youcould, you could location, or
you could kind of temporallyshift that to the morning to
meet winter loads or something.
Tim Montague (11:19):
You mentioned New Jersey, but you know, storage
incentives are now in manyplaces, New York, Massachusetts,
Illinois. How do you perceivethat states and I guess ISOs are
(11:40):
really getting wind of thesephenomena and deciding to take
action at the state level. Itseems somewhat random to me, but
I'm just, yeah, I'm justcurious, like, how do you see
this percolating throughout thecountry, yeah.
Vincent Potter (12:02):
So it's, it's interesting to watch as it kind
of starts to bubble up. So itseems like it will almost
proliferate through a through anISO, right? So you've got
something that's happening inNew Jersey, and it will go
through the PJM interconnection,or something in Maryland. So
Maryland, studying energystorage as well. Pennsylvania is
(12:22):
looking at energy storage. Andthen you'll, you'll see various
bills introduced. So we, a largepart of the addendum to our
report is actually the ourtracking notes on each like
regulatory action and Bill,right? So the the write up
itself is a svelte, maybe 4050,pages. The rest of it is kind of
(12:46):
in depth, Bill and regulatorydetail, but it's really
interesting to watch storagepolicies kind of evolve from a
state by state perspective. Sowe'll see things come up in
Illinois, and it it will changeslightly when it gets to
Wisconsin or Minnesota, butthese actions are still kind of
(13:12):
similar, right? And so what it'sdoing is it's looking for ways
to supplement the grid, andbecause there are the grid needs
reliable energy. It needs waysto either meet demand or offload
excess demand at a reasonableprice. So we see a lot of the
same policies popping up. It'salmost like convergent
(13:36):
evolution, right? Where, even ifI don't think they're
necessarily copying thepolicies, I think they're having
similar problems or identifyingsimilar issues that they see
that energy storage can solve.
Tim Montague (13:49):
I found some of these charts to be, frankly,
very encouraging. There's a lotof action happening in a lot of
places. This figure two onscreen is action on grid
modernization by number ofactions. And the dark blue are
10 or more actions. The lighterblue are six to nine actions.
(14:12):
The lighter blue is three tofive actions. And there was only
one state with no actions so andplaces like Texas and Louisiana
would not be my first, you know,anticipated answer to grid
modernization, or places where Ithought that was going to
happen, you know, early, so tospeak.
Vincent Potter (14:36):
Yeah, when you look at the most active states,
of course, Texas is the largest,followed by California. But also
you see Colorados up there,Michigan, Maine and Missouri,
Oregon, Illinois, Hawaii. Sowhere Louisiana makes it in the
top half, I believe, of the ofthe nation, speaking of them, as
(14:59):
well as a. Arizona, yeah. Soeven some of these more
historically, let's call themunfriendly to renewable
generation,
Tim Montague (15:10):
yeah, yeah. I mean, there is a certain
overlay, red state, blue statehere going on right like the
Northeast is a hot spot, andthat's very blue California and
and Oregon, but yeah, Texas,Louisiana, red, states going,
going for it, so to speak, withgrid modernization. What was
(15:35):
sorry? Go ahead.
Vincent Potter (15:37):
Well, I will say that I don't think that I
distribution and transmissiondifficulties. Care about
politics, right? So it's, it'sone of those things that you're
going to have problems thatcould be at least attenuated by
energy storage, irrespective ofwhat your grid looks like
Tim Montague (16:01):
on on micro grids, Hawaii, Oregon, Texas and West
Virginia, all advanced rules orprograms. What's motivating
these states? And do you seemicro grids becoming mainstream
resilience tools, rather thanniche pilots?
Vincent Potter (16:15):
In some cases?
Yeah, West Virginia is veryinteresting looking at micro
grid districts, right? So kindof looking at large load
centers, industrial facilitiesor even commercial facilities
that would want to locate, sharea load and have their own or a
secondary generator to servetheir demands in parallel to the
(16:40):
electric grid. There it's, it'sfascinating watching it kind of
develop, as you know, we see alot, or at least when we look at
the generation mix of WestVirginia, it's largely, you
know, coal fired power plants.
But when we have thedevelopments that would allow
(17:05):
businesses and industries tohave a little bit more leeway in
what they get to power theirtheir processes with, it's it's
quite fascinating. In Hawaii,we're seeing a lot of
development and changes in howthey achieve reliability. They
(17:25):
recently started reducing theamount of oil they consume. So
looking at how renewables andmaybe some liquefied natural gas
or something like that, fitsinto their energy mix. And so
some of it looking at, you know,Hawaii, looking at Puerto Rico,
(17:45):
there's a lot of kind of seeingmicro grids as a large portion,
or at least a significant partof the grid itself.
Tim Montague (17:57):
And you know, in my mind, there certainly is a
resilience undertone here. Youhad the storms, you know, the
storm Yuri a couple of years agoin Texas, which was a real wake
up call for the Texas grid. Itimpacted all kinds of assets,
(18:18):
fossil and renewable energy, andnearly was a major disaster.
They they averted a much longeroutage by a by the hair on their
chinny chin, chin. But is there?
Is this a theme that a lot ofstates are really looking into.
Vincent Potter (18:44):
We've worked with a number of states so
adjacent to the the 50 statesreporting, we've we've worked
with a number of states andtheir emergency management
agencies to look at whatresiliency, energy resiliency,
actually looks like,particularly on the eastern
seaboard of the US. So that'slooking at not necessarily
(19:09):
electric sector reliability,right? Because our reliability
in the United States is very,very good, right? But looking at
what happens when the grid goesdown, and what happens over that
next 612, 4872, hours. So someof it has been grant related
work that we've done, and someof it has been kind of
(19:31):
consulting partnerships betweenemergency management agencies at
the at the state or regionallevel to develop more robust
resiliency plans. We are seeinga lot of legislators that are
very cognizant of the potentialthat micro grids can offer,
(19:51):
especially when we talk aboutthis kind of critical
infrastructure facilities,right? So when we when we look
at hospitals or emergencycenters or. Or, you know, just
your municipal complex, right,that has a fire station, a
police headquarters and maybesome government offices,
providing them with the leewayto either self generate or be
(20:13):
part of a micro grid, so that ifthe larger grid goes down, they
can at least maintain some levelof services. A lot of the
advancement we've seen has beenlegislatively driven and then
implemented by regulators.
Tim Montague (20:29):
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call 855-584-7168, to find outmore, Virginia mandated dominion
to launch a 450 megawatt virtualpower plant pilot. How
significant is this shifttowards VPPs and what role do
you see aggregated durs playingin a resilience in resilience
(21:36):
markets?
Vincent Potter (21:38):
Ah, wow. Those are, those are two really
fascinating questions, right? Solooking at harnessing all of
these ders that are on the gridas as an asset is is a really
strong way to, like increasetheir value proposition, right?
So, so not just are youdelivering electrons to
(22:00):
somebody's home or somebody'sbusiness, but you could also, on
aggregate, be shaping thegeneration profile, right if you
can be accurately dispatched.
We've seen a lot of back andforth within the PJM
interconnection, of whichVirginia is a part in its
implementation of for order 2222which requires der aggregation,
(22:22):
or aggregated ders, same thingas a VPP, really. And so some of
this is just executing, rightthose, those kind of Federal
Energy Regulatory orders, andsome of it is allowing dominion
and other large utilities toharness the power that this
(22:46):
distributed energy network has.
Yeah, I think it's, it's, it'snot pushing the the landscape
right? We're not at the phase ofVPPs where we can say, Okay,
well, we don't need to build anew natural gas plant or
(23:09):
something like that, because wehave all of these ders, but we
are strongly in the in the nonwire solution space with VPP so
far,
Tim Montague (23:19):
I know that California and Kaiso have been
in the news lately, also, right,because of the amount of battery
storage in that market and howthe VPPs are really becoming
substantial players forattacking The cost of power and
(23:41):
attacking the duck curve, right?
The duck curve is you get thisbig belly in the middle of the
day because there's so muchsunshine and the solar is
cranking well. Now in theafternoon, you can attack the
head of the dock with thevirtual power plant of batteries
and other resources, otherpeaker resources, but is, do you
have anything else? I mean, Iguess that's also a lingering
(24:05):
question for me. Is becauseCalifornia is so much further
along. You know, they're, theymight be 10 years ahead of most
other states in the country,both legislatively and
practically speaking, does itnot loom so large for you guys
when you're looking at theemerging phenomena?
Vincent Potter (24:31):
I would say yes, it does. Looking at looking at
the development in California.
What's interesting about, youknow, seeing these VPP proposals
is they pair a lot with changeswe see to other der policies,
right? So, like, we have a lotof changes that we flagged with
net metering successor tariffsand whatnot. So changing the
(24:56):
value of electrons, you. Deliverto the grid. We're, in fact,
seeing some support in so wetrack what's going on with
utility business models. And asI said, some of it, some of what
we track is performance basedpolicy options. And so looking
at new utility programs thatdon't pay for exports during
(25:21):
certain hours to reallyincentivize that battery
storage, right? So, like yearsago, and still, now we're
looking at the development oftime of use rates, right? That
kind of time varied. You paymore during peak times. You pay
less during the overnight hourswhen not as many people need it.
And now we're seeingcompensation for kind of exports
(25:42):
to the grid, whether they befrom batteries, from solar, what
have you on site, generation ofsome description, to match that,
to really enhance those gridservices. So some VPP policies
that we're seeing, some VPPproposals would pay more based
on you know, what the chargewould be for those and that
(26:06):
makes it really advantageous andmaximizes the grid services that
you get from ders, Californiahas got some really interesting
strategies. Kaiso has a state ofcharge based compensation
structure for batteries, andCalifornia itself just moves a
lot of the renewable electrons,but they they have also a net
(26:32):
metering program that strongly,strongly incentivizes energy
storage along with selfgeneration for all users,
Tim Montague (26:47):
I have figure four on screen now, and I'll just
zoom in a little bit. You seethat the most active states in
q2 were Texas, California,Colorado, Connecticut,
Massachusetts, Michigan, NewYork and Maine. And I would say
(27:09):
half of those, you know, are nosurprise to me, and half are
somewhat of a surprise, but andthen I'll just, I'll just
describe the differentcategories that are that are
laid out here, studies andinvestigations, utility,
business model and rate reform,incentives, planning and market
(27:29):
access, policies and deployment.
Anything else noteworthy aboutthis before we move on?
Vincent Potter (27:37):
So, yeah, I think so, if you look at so the
orange is studies, right? Sothat's either the legislature or
the governor or the UtilitiesCommission has ordered some
investigation into new gridmodernizing technologies, or how
it might fit some of this isresearch into VPPs battery
(28:01):
storage development incentiveprograms. What we what I
personally find most interestingis that light blue section,
right? And that is utilitybusiness model and rate reform.
So that's when we're looking atcompensation or cost for
consumption during certain hoursor production during certain
hours, and so changes to the waythat utilities get made whole
(28:26):
based on the peak. So givingcustomers better price signals
for when they can choose toconsume or not to consume. Or in
the der space, right in this VPPspace, giving them better price
signals for when it's the besttime to generate beyond what
they need so they can providemore grid services.
Tim Montague (28:51):
Fascinating. All right, let's move on to utility
business models and regulation.
Several states studied orenacted performance based
regulation. This includes Maine,Virginia, Oregon, in your view,
can can performance basedregulation meaningfully,
meaningfully accelerate theintegration of durs and
(29:13):
resilience technologies?
Vincent Potter (29:18):
Well, yes, it can when it's designed
thoughtfully. So if you tell autility that they need
performance, that they need toimplement a performance based
program, having kind of an ideaof the type of performance that
is reasonable to ask for andachievable within the grid,
(29:40):
which is why we see so muchaction of the study space is is
key. So if you have, let's say,for example, a winter peaking
utility whose highest peaks ofthe year are January and
February mornings from five to7am THE. The ways to get them to
(30:01):
deal with that during using derswould be largely through
storage, possibly through windenergy. But the only way you can
get that kind of controlleddispatch during those peak
periods are going to be withwith energy storage if
conversely, your utility andyour state deals mostly with
(30:24):
congestion and throughput onyour transmission lines. Then
maybe something that involvessome of these grid modernizing
technologies, the fault locationor various advanced distribution
management systems ordistributed energy resource
management systems that could bea better implementation for
(30:44):
that, and so it would beperformance of those particular
systems as opposed to storagedeployment. So yes, it certainly
can. But like all policies, ithas to be thoughtfully designed
and implemented.
Tim Montague (30:56):
How new is performance based regulation?
Period
Vincent Potter (31:00):
performance based regulation has been around
for 2025, years. It started withwhat we originally what, what I
believe was called in the late90s, deregulation, and we prefer
to call restructuring now. Soelectric, electric utilities
that were traditionally naturalmonopolies would have been
(31:20):
restructured into kind ofspinning off generation and then
having transmission anddistribution handled by the
utilities. So if you when youdon't have that kind of
monopolistic utility incentiveto just build large generation
(31:41):
assets and get a guaranteed rateof return. It all, it all
becomes performance based, andso we're seeing kind of a
continuation of this
Tim Montague (31:51):
time of use and advanced rate design remain
contentious. Hawaii, forinstance, declined to expand
time of use rates. What lessonsshould other states take from
these mixed outcomes?
Vincent Potter (32:05):
You've got a time of use is one of those
conceptual matters that worksvery, very well if everybody
understands their energy use,right? So as an energy expert,
as an electric sector expert, Iunderstand, you know, this is
the time where I should run mydryer. This is the time where,
(32:27):
you know, it's best to charge myelectric vehicle, if I have an
electric vehicle, or to, youknow, do what have you? Run the
dishwasher, run your AC. Butthat is a level of detail that
many customers just don't havethe time right to deal with so
part of time of use, rate designimplementation really needs to
(32:50):
be an education component,right? You need to get involved
with the customers and help themunderstand how to shift their
energy use, or whether they needto shift their energy use so
it's, it's, you know, ifeverybody is the perfect market
participant that we learnedabout in economics, 102, then it
(33:12):
makes sense for everybodyimmediately. But sometimes
there's an education effort thatneeds to happen to bring people
up to speed.
Tim Montague (33:20):
I think of time of use rates as facilitating the
implementation of storage on thegrid, frankly, and so, you know,
I just kind of generically thinkof time of use as a public good.
But if you're not implementingstorage, and you have patchy
(33:44):
usage that can come back to biteyou right, like, if you have
consistently high usage in thelate afternoon, when energy is
more expensive, but you don'thave a battery, then maybe that
is counterproductive. Is that
Vincent Potter (34:01):
true? Yeah, I would say so energy storage can
kind of reduce the mentalburden, right? Or the kind of
onerous nature of having toremember not to turn this on, or
to set your HVAC back, orsomething like that during these
peak times or peak events, mostretail energy storage that you
(34:25):
would get at home, for instance,right? We work a lot with
residential customers and andtheir advocates, and so there
are ways that you would justprogram right your battery
storage so that it knows whenyour peaks are right, so it can
help kind of optimize itsdispatch, or optimize your
(34:50):
consumption, as it were, ifyou're not injecting to the
grid. And we see a lot of.
Pairing, right? So as as solarexpands, we see a lot of pairing
solar with storage. Both, youknow, in California, where you
you kind of have to to make itcost beneficial, but also in in
(35:11):
other states as well, in NorthCarolina, South Carolina,
Virginia included.
Tim Montague (35:20):
So how are utilities themselves responding
to this wave of regulatory andpolicy change? Do you see
genuine transformation ofbusiness models or more
incremental compliance?
Vincent Potter (35:33):
Utilities tend to be conservative, right? They
move slowly because they have alot of things to manage. We see
a lot of kind of fruitfulconversations around energy
storage deployment. Many of theutility folks that I've spoken
to are genuinely excited aboutgetting more storage on the
(35:55):
grid, because that reduces theamount of kind of work that they
would have to do, it lessens thelikelihood that they'll
encounter something likeCalifornia's duck curve, which
you mentioned before, and soboth customer cited energy
storage and grid. Energy storageis pretty well received. There
(36:18):
are several utilities in theMidwest that are operating
resiliency and energy storage asa service programs as a result
of some of this push towardsgetting more storage on the
grid, so they will have utilityoperated, customer cited energy
storage, so during blue skyconditions, right, the utility
(36:40):
would get to dispatch yourstorage a little bit to meet
some grid demands, and thenduring an outage, if the grid
were to go down, you would thenget backup power out of it. So
that's kind of happy mediumbetween those two, where you can
find common benefits forcustomers and utilities.
Tim Montague (37:05):
Some states like Maryland are incorporating
equity and environmental justiceinto resilience planning. How
well are states doing todemocratizing resilience beyond
corporate campuses andutilities, there's
Vincent Potter (37:22):
always opportunities to do better,
right? We've seen a lot ofadvancements, and we see a lot
of cognition of the locations onthe grid with the most
reliability concerns oftenhappen to be those disadvantaged
communities, those lower wealthcommunities. And so as we have
(37:43):
some we have some performancebased regulation. There are
several utilities in thesoutheast that have to report in
their rate cases on their worstperforming circuits, right their
highest or their lowestreliability circuits. And so how
they can go on and improve thatso that becomes, that becomes a
(38:04):
kind of equity measure a littlebit. And there are many state
programs that we see coming outof like state energy offices in
Louisiana, North Carolina, wesee some, of course, in
Maryland, where the state energyoffices are engaging with lower
(38:25):
wealth communities that haveissues and even there are some
private dollars, so parts ofMinneapolis have resiliency hubs
that provide community serviceswith customer owned solar and
utility owned and operatedbatteries so that they have if
(38:49):
the if the power goes down inMinneapolis, the folks in the
inner city there would stillhave access to charging
refrigerators could keep theirmedications Cold if they needed
it, that kind of thing.
Tim Montague (39:03):
All right, let's talk about the future, looking
ahead. If you step back, whatdoes the next five years of grid
modernization look like? Whatwhich policy or technology trend
will dominate the conversationby 2030
Vincent Potter (39:20):
you know, if I had a crystal ball, I would be,
I might be in a differentbusiness, but based on what
we're seeing, I think we'regoing to see a lot more
advancement in virtual powerplants. We're of course, going
to see more on site generationin either and either like micro
grid development or large loadcustomer specific like grid
(39:42):
development. So with theproliferation of data centers,
it seems like specified policiesfor data centers and other large
load customers. I also expectthat to kind of play into the
micro grid conversation. Solooking, looking at what they
(40:02):
can provide to nearbycommunities in the case of a
grid outage or something likethat, I also think we're going
to see continuing technologyimplementation, right? So so
more and more sophisticateddistribution management systems
and other technology solutionsthat can be implemented so that
(40:23):
we have fewer transmissionrights of way that need to be
taken up. I mean, we're lookingat, you know, transmission lines
that would require additionalrights of way, and that's just,
it's seems to be morecontentious than one that's in
the electric power sector wouldthink, but that's, that's not my
(40:44):
that's not my wheelhouse. But Ithink we'll, we'll try and cover
it with technology solutions asbest as we can.
Tim Montague (40:51):
I guess you know your your opening comments about
the evolution of technology andthis phenomenon that the grid
can become self healing, forexample, when a asset, whether
that's a single transformer ora, you know, a neighborhood,
(41:15):
goes down, the grid, can smartlywork around that problem, per
se, kind of like a biologicalsystem self heals, if you had to
venture kind of writ large todayin America, how close are we to
Having a grid that can, forexample, self heal?
Vincent Potter (41:42):
We so we there are some locations in the
population centers right wherethere's, there's a lot of
distribution infrastructure.
We're going to we see this morecommonly, but when we have to
traverse large distances throughrural America, it's going to be
really, really difficult, justbecause there's not a secondary
line that you can carry thatthrough in some cases, as we see
Puerto Rico continue to developin its energy restructuring
(42:08):
after Hurricane Maria, it is akind of a linkage, almost like
like chain mail armor, of likemicro grids that are just linked
on to one another. And we seesome of this kind of thing
happening elsewhere, where therethere are self healing grids in
(42:30):
the Northeast corridors, inparts of Texas, in parts of the
southeast, where we have largepopulation centers. We've also
done a lot of work withcooperatives that are
traditionally lower on thepopulation density side, right?
These will operate in ruralAmerica largely, but they will
(42:52):
find ways to Island themselvesif there is a if there is an
issue, so they will have housingdevelopments there where they
own batteries, and they'reencouraging their members to
install solar panels so that ifanything were to happen, the
(43:13):
housing development would stayPowered. And we see that
happening here and therethroughout and I'm looking
forward to more of that kind oflike, it's just factoring the
two way flow, right? It's noteverything comes from the
substation and everything comesfrom the the generation station
behind, behind that. If there'scommunity cited energy storage,
(43:37):
and there's community citedenergy generation. How could
that be more equallydistributed? Right? We see
hurricanes in Florida and NorthCarolina. I mean, we had a bad
hurricane last September thatjust washed through Western
North Carolina in the mountains.
(43:59):
And so we're wondering how muchcould micro grids and how much
could islanding have avoided inthat so future course of study,
Tim Montague (44:13):
I don't know if you track what's going on
internationally, but you know,from my perspective, we're
seeing a lot of moves in Europeand Asia towards long duration
storage, hydrogen andresilience, funding. How does
the US actively compare? Sorry,how does the US activity
compare? Are we leading, laggingor simply different?
Vincent Potter (44:37):
I think we're a little bit different, right?
China has a very centralizedkind of national plan. Germany,
Spain, parts of France, for themost part, have like kind of
directives at the nationallevel. But America doesn't
really operate that way, right?
We're thanks to our regulatoryfederalism. We have. Have 54
(44:59):
different regulatoryenvironments that operate. We
have 54 different sets of rulesand statutes. Sometimes we find
a lot of commonality becausethey're linked by, you know, an
interconnection or a regionaltransmission organization or
something like that, andsometimes we see just similar
(45:21):
policy environments, state tostate. But what's what the
policies are in North Carolinadon't necessarily affect what
the policies are in Virginia orTennessee or South Carolina,
because they touch it just likewhat's happening in ERCOT,
right? The Electric ReliabilityCouncil of Texas doesn't affect
all of Texas. It doesn't affectwhat's going on in its
(45:42):
neighboring states, in Arizonaor Louisiana. So we have a very
different system. We havesomething where we need a lot of
economic levers to make it makethe most sense, so we can kind
of do it on a cost basis, but wecan't do it on a mission basis.
Tim Montague (46:08):
So my last question, if you were speaking
directly to project developers,EPCs, investors or community
leaders, what one or twotakeaways would you give them
from this report?
Vincent Potter (46:25):
So I've got different answers for the
different audiences, right? Sofor project developers and EPCs,
it is partnering with yourutility early and understanding
how you can provide value tothem and how they can provide
value to you, right? It's notalways a one way relationship.
(46:48):
And then for communityadvocates, it is finding the
right partnership. So sometimesa community needs to work with
the local government first andthen engage the EPC or
developer. And sometimes theyneed to do it the opposite way,
and start with the developerwith an idea that can then help
them pitch to local governmentfor permitting or what have you.
(47:12):
But I would love to see morecommunity advocacy
organizations, or just communitybased organizations getting more
involved in the energy space.
They're really big in the energyefficiency space already, but I
would love to see them on theder side as well.
Tim Montague (47:31):
Hey guys, are you a residential solar installer
doing light commercial butwanting to scale into large CNI
solar? I'm Tim Montague. I'vedeveloped over 150 megawatts of
commercial solar, and I'vesolved the problem that you're
having you don't know what toolsand technologies you need in
order to successfully close 100KW to megawatt scale projects.
(47:56):
I've developed a commercialsolar accelerator to help
installers exactly like you.
Just go to cleanpowerhour.comclick on strategy and book a
call today. It's totally freewith no obligation. Thanks for
being a listener. I reallyappreciate you listening to the
pod, and I'm Tim Montague, let'sgrow solar and storage. Go to
clean power hour and clickstrategy today. Thanks so much.
(48:19):
All right, we'll leave it there.
Thank you so much. VincentPotter, Policy Project Manager
and author of 50 states of gridmodernization. Q2, 2025, from NC
State clean energy technologycenter.
Vincent Potter (48:39):
It's a mouthful.
I know it is.
Tim Montague (48:43):
Check out all of our content at
cleanpowerhour.com. Please giveus a rating and a review on
Apple or Spotify. Tell a friendabout the show, reach out to me
on LinkedIn. I love hearing frommy listeners and follow us on
YouTube. With that, I'll say,let's grow solar and storage.
I'm Tim Montague, thanks,Vincent, thank you. Tim.
I think that looking at grid modernization
(00:02):
and how the grid evolves, as yousaid, it used to be kind of one
directional and it was very muchgeneration. Station goes through
transmission, goes throughdistribution and gets to the
households. And now withincreasing penetration of
distributed energy resources, aswell as more kind of usage
intensive devices, whether theybe home, located, energy
(00:23):
storage, public EV charging,induction stoves or other kind
of beneficial electrificationapplications, we're seeing a lot
more demands on the grid, sosome of it is advanced metering
and two way flow of informationup to two way flow of electrons
(00:44):
themselves.
intro (00:45):
Are you speeding the energy transition here at the
Clean Power Hour, our host TimMontague, bring you the best in
solar batteries and cleantechnologies every week. Want to
go deeper into decarbonization.
We do too. We're here to helpyou understand and command the
commercial, residential andutility, solar, wind and storage
industries. So let's get to ittogether. We can speed the
(01:07):
energy transition
Tim Montague (01:11):
today on the Clean Power Hour grid modernization,
meaning a smart grid, meaningmicro grids, things that are
good for resilience. The grid ischanging. It used to be, it just
kept the lights on, and now itneeds to do a whole lot more. My
guest today is Vincent Potter.
He is a Policy Project Managerat NC State. He is part of the
(01:32):
North Carolina clean energytechnology center. They also run
desire, which you solarprofessionals are very familiar
with. They track all of thepolicies going on relevant to
ders and clean energy. And we'regoing to be geeking out on their
recent report, 50 states of gridmodernization. Q2, 2025, welcome
(01:55):
to the show Vincent,
Vincent Potter (02:00):
and thanks so much for having me looking
forward to our conversation.
Tim Montague (02:04):
Yeah, I'm totally pumped to have such a storied
professional and organization onthe show. So this is a very long
report. It's like 140 pages. Itis a subscription service that
you guys offer so you can'taccess the full report without
(02:26):
buying it, but you you can getan executive summary at their
website. And so let's just setthe stage a little bit Vincent
your team tracks gridmodernization across all 50
states, every quarter. And fromyour vantage point, how would
(02:46):
you define grid modernization in2025 and why is it such a
critical lens for policy makersand practitioners today?
Vincent Potter (02:58):
It's a really interesting question. I think
that looking at gridmodernization and how the grid
evolves, as you said, it used tobe kind of one directional and
it was very much generation.
Station goes throughtransmission, goes through
distribution, gets to thehouseholds, and now with
increasing penetration ofdistributed energy resources, as
well as more kind of usageintensive devices, whether they
(03:20):
be home, located, energystorage, public EV charging,
induction stoves or other kindof beneficial electrification
applications, we're seeing a lotmore demands on the grid, so
some of it is advanced meteringand two way flow of information
up to two way flow of electronsthemselves. So a lot of new
(03:44):
things that we're figuring outhow to make the grid do and
trying to do it with less aswell.
Tim Montague (03:56):
When you say we're trying to do it with less, what
are you referring to?
Vincent Potter (04:00):
Well, if you look at some of the technologies
that we use to advance or thatutilities use to advance the
grid right to make it smarter,as it were, some of it is
looking moment to moment at whatyour transmission lines are
doing or your distribution linesare doing to see if you can
actually put more electronsthrough that. So if the weather
(04:23):
conditions or if the loads areconducive to not having to
invest that the Center Researchis a lot of what are called non
wires, alternatives toinfrastructure development. So
it's ways for utilities,transmission operators,
distribution operators, toreduce their capital investments
(04:46):
by using software solutions,strategically located storage or
other ders to make the powerflow more seamless and do it
kind of behind the scenes as a.
Opposed to building more andmore transmission.
Tim Montague (05:03):
So we're seeing the grid evolve from being a one
way centralized system to a moredecentralized, interactive
network. Where are we in thattransition, and what are the
largest drivers of urgency forthat transition?
Vincent Potter (05:22):
So we're in the thick of it. So in the what
Obama administration, with theAmerican rescue and recovery
act, I believe we started a lotof advanced meter infrastructure
deployment. Now advancedmetering is smart meters
deployed at, you know, kind ofpeople's homes and places of
(05:42):
business, and that's the that'sthe groundwork of the smart
grid, knowing what is happeningat every point in your grid, as
opposed to just measuring it atthe substation or measuring it
at your generator. So we are, weare beyond that part. In most
parts of the country, mostutilities are on their kind of
AMI, advanced meteringinfrastructure, 2.0 or sometimes
(06:05):
even 3.0 getting those meterssmarter and smarter so that they
can get the informationnecessary to make these kind of
more advanced decisions. We seesome advancement from the
regulatory perspective coming infor distribution system planning
or resource planning processesthat require implementation of
(06:26):
some of these technologies. Someof the stuff we're talking about
is fault location, isolation andthen service restoration. So
you'll have a whole bunch ofnodes that are reading so you
can actually find ways toreroute power past a transformer
that has failed in many parts ofthe country, you will see new
labeling on the transformers. Ifyou're an energy dork like me
(06:49):
and my children, we go and welook at the labels that are on
the boxes as we take our walks,and we'll see like self healing
grid or self restoring grid inseveral like large yellow
letters on these service boxes.
And so this is one of thoseupgrades, right? So if this pole
goes down, the electricity canactually be rerouted around it
(07:12):
to maintain service. So we seesome of that, and then we see
the continuing application ofenergy storage and other
hardware solutions, so advancedrelays and that kind of stuff
within the substations to getpast congestion. So you'll have
kind of ways to pool energy at apoint where you know you're
(07:34):
going to need it a lot, in themid afternoon, late afternoon
and summer times, for example.
Tim Montague (07:42):
Thank you. So the q2 report catalogs 468 actions,
I believe, across 48 states,plus DC and Puerto Rico, which
trends stood out to you the mostthis
Vincent Potter (07:56):
quarter. So a lot of it, a lot of the
regulation, is moving moretowards performance based so so
utilities being required to havecertain performance thresholds
or offer programs thatcompensate compensate various
entities for their performancewithin so if we're talking about
(08:16):
a demand response program or aload reduction program, you
would find compensation for theamount of demand you deferred or
the amount of load you couldshed. We're seeing a lot of
movements in the energy storagespace. Currently, New Jersey has
a new energy storage incentiveprogram that they've put out for
straw proposal through the lastyear and a half, and seems to
(08:39):
it's finalized. Now they're kindof moving out the procurement
window. I think they've pushedit out a month, a month and a
half, to kind of feel, feel outwhat the federal situation is
going to settle out in. And thenvirtual power plants have been a
big thing, and then trying tofigure out what to do with data
(09:00):
centers and how to make surethat reliable power can be
provided to large load customerswithout adversely impacting
other customers.
Tim Montague (09:13):
So I was able to identify three trends, two of
which you mentioned explicitly,energy storage. 41 States took
action in this quarter. Are youseeing states converge on common
approaches like mandates,incentives, interconnection,
reforms? Let me finish mythoughts. So I found three
(09:36):
trends, energy storage, microgrids and virtual power plants,
which two of the three youmentioned, but this energy
storage trend, it's no longerjust California and Texas and
Hawaii like there's a lot ofstates doing a lot of different
things. Are they all just dogpiling on to what California has
(09:58):
done?
Vincent Potter (10:01):
I'm not entirely a lot of regulators and
legislators are recognizing thevalue of energy storage.
Sometimes it's as a complementto existing renewable resources.
Other times it is a non wiresolution. So looking at what we
would call front of meter energystorage, so stuff that's on the
(10:21):
utility transmission ordistribution grid, but still
located near large loads, sosubstation, energy storage and
that kind of thing. We're seeingsome you mentioned
interconnection reform, andwe're seeing some modifications
in proposed interconnectionrules that would allow Co
(10:42):
Location of like battery, energystorage with wind or solar in
some states, as long as youwithout requiring a new
interconnection review, as longas you don't inject to the grid
more than your nameplatecapacity. So that would allow
some arbitrage in that so ifyou've got a wind power producer
that's producing a lotovernight, you could then store
(11:04):
some of that energy to dischargeto help allay peak demands. Same
thing with solar, you know, youcould, you could location, or
you could kind of temporallyshift that to the morning to
meet winter loads or something.
Tim Montague (11:19):
You mentioned New Jersey, but you know, storage
incentives are now in manyplaces, New York, Massachusetts,
Illinois. How do you perceivethat states and I guess ISOs are
(11:40):
really getting wind of thesephenomena and deciding to take
action at the state level. Itseems somewhat random to me, but
I'm just, yeah, I'm justcurious, like, how do you see
this percolating throughout thecountry, yeah.
Vincent Potter (12:02):
So it's, it's interesting to watch as it kind
of starts to bubble up. So itseems like it will almost
proliferate through a through anISO, right? So you've got
something that's happening inNew Jersey, and it will go
through the PJM interconnection,or something in Maryland. So
Maryland, studying energystorage as well. Pennsylvania is
(12:22):
looking at energy storage. Andthen you'll, you'll see various
bills introduced. So we, a largepart of the addendum to our
report is actually the ourtracking notes on each like
regulatory action and Bill,right? So the the write up
itself is a svelte, maybe 4050,pages. The rest of it is kind of
(12:46):
in depth, Bill and regulatorydetail, but it's really
interesting to watch storagepolicies kind of evolve from a
state by state perspective. Sowe'll see things come up in
Illinois, and it it will changeslightly when it gets to
Wisconsin or Minnesota, butthese actions are still kind of
(13:12):
similar, right? And so what it'sdoing is it's looking for ways
to supplement the grid, andbecause there are the grid needs
reliable energy. It needs waysto either meet demand or offload
excess demand at a reasonableprice. So we see a lot of the
same policies popping up. It'salmost like convergent
(13:36):
evolution, right? Where, even ifI don't think they're
necessarily copying thepolicies, I think they're having
similar problems or identifyingsimilar issues that they see
that energy storage can solve.
Tim Montague (13:49):
I found some of these charts to be, frankly,
very encouraging. There's a lotof action happening in a lot of
places. This figure two onscreen is action on grid
modernization by number ofactions. And the dark blue are
10 or more actions. The lighterblue are six to nine actions.
(14:12):
The lighter blue is three tofive actions. And there was only
one state with no actions so andplaces like Texas and Louisiana
would not be my first, you know,anticipated answer to grid
modernization, or places where Ithought that was going to
happen, you know, early, so tospeak.
Vincent Potter (14:36):
Yeah, when you look at the most active states,
of course, Texas is the largest,followed by California. But also
you see Colorados up there,Michigan, Maine and Missouri,
Oregon, Illinois, Hawaii. Sowhere Louisiana makes it in the
top half, I believe, of the ofthe nation, speaking of them, as
(14:59):
well as a. Arizona, yeah. Soeven some of these more
historically, let's call themunfriendly to renewable
generation,
Tim Montague (15:10):
yeah, yeah. I mean, there is a certain
overlay, red state, blue statehere going on right like the
Northeast is a hot spot, andthat's very blue California and
and Oregon, but yeah, Texas,Louisiana, red, states going,
going for it, so to speak, withgrid modernization. What was
(15:35):
sorry? Go ahead.
Vincent Potter (15:37):
Well, I will say that I don't think that I
distribution and transmissiondifficulties. Care about
politics, right? So it's, it'sone of those things that you're
going to have problems thatcould be at least attenuated by
energy storage, irrespective ofwhat your grid looks like
Tim Montague (16:01):
on on micro grids, Hawaii, Oregon, Texas and West
Virginia, all advanced rules orprograms. What's motivating
these states? And do you seemicro grids becoming mainstream
resilience tools, rather thanniche pilots?
Vincent Potter (16:15):
In some cases?
Yeah, West Virginia is veryinteresting looking at micro
grid districts, right? So kindof looking at large load
centers, industrial facilitiesor even commercial facilities
that would want to locate, sharea load and have their own or a
secondary generator to servetheir demands in parallel to the
(16:40):
electric grid. There it's, it'sfascinating watching it kind of
develop, as you know, we see alot, or at least when we look at
the generation mix of WestVirginia, it's largely, you
know, coal fired power plants.
But when we have thedevelopments that would allow
(17:05):
businesses and industries tohave a little bit more leeway in
what they get to power theirtheir processes with, it's it's
quite fascinating. In Hawaii,we're seeing a lot of
development and changes in howthey achieve reliability. They
(17:25):
recently started reducing theamount of oil they consume. So
looking at how renewables andmaybe some liquefied natural gas
or something like that, fitsinto their energy mix. And so
some of it looking at, you know,Hawaii, looking at Puerto Rico,
(17:45):
there's a lot of kind of seeingmicro grids as a large portion,
or at least a significant partof the grid itself.
Tim Montague (17:57):
And you know, in my mind, there certainly is a
resilience undertone here. Youhad the storms, you know, the
storm Yuri a couple of years agoin Texas, which was a real wake
up call for the Texas grid. Itimpacted all kinds of assets,
(18:18):
fossil and renewable energy, andnearly was a major disaster.
They they averted a much longeroutage by a by the hair on their
chinny chin, chin. But is there?
Is this a theme that a lot ofstates are really looking into.
Vincent Potter (18:44):
We've worked with a number of states so
adjacent to the the 50 statesreporting, we've we've worked
with a number of states andtheir emergency management
agencies to look at whatresiliency, energy resiliency,
actually looks like,particularly on the eastern
seaboard of the US. So that'slooking at not necessarily
(19:09):
electric sector reliability,right? Because our reliability
in the United States is very,very good, right? But looking at
what happens when the grid goesdown, and what happens over that
next 612, 4872, hours. So someof it has been grant related
work that we've done, and someof it has been kind of
(19:31):
consulting partnerships betweenemergency management agencies at
the at the state or regionallevel to develop more robust
resiliency plans. We are seeinga lot of legislators that are
very cognizant of the potentialthat micro grids can offer,
(19:51):
especially when we talk aboutthis kind of critical
infrastructure facilities,right? So when we when we look
at hospitals or emergencycenters or. Or, you know, just
your municipal complex, right,that has a fire station, a
police headquarters and maybesome government offices,
providing them with the leewayto either self generate or be
(20:13):
part of a micro grid, so that ifthe larger grid goes down, they
can at least maintain some levelof services. A lot of the
advancement we've seen has beenlegislatively driven and then
implemented by regulators.
Tim Montague (20:29):
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markets?
Vincent Potter (21:38):
Ah, wow. Those are, those are two really
fascinating questions, right? Solooking at harnessing all of
these ders that are on the gridas as an asset is is a really
strong way to, like increasetheir value proposition, right?
So, so not just are youdelivering electrons to
(22:00):
somebody's home or somebody'sbusiness, but you could also, on
aggregate, be shaping thegeneration profile, right if you
can be accurately dispatched.
We've seen a lot of back andforth within the PJM
interconnection, of whichVirginia is a part in its
implementation of for order 2222which requires der aggregation,
(22:22):
or aggregated ders, same thingas a VPP, really. And so some of
this is just executing, rightthose, those kind of Federal
Energy Regulatory orders, andsome of it is allowing dominion
and other large utilities toharness the power that this
(22:46):
distributed energy network has.
Yeah, I think it's, it's, it'snot pushing the the landscape
right? We're not at the phase ofVPPs where we can say, Okay,
well, we don't need to build anew natural gas plant or
(23:09):
something like that, because wehave all of these ders, but we
are strongly in the in the nonwire solution space with VPP so
far,
Tim Montague (23:19):
I know that California and Kaiso have been
in the news lately, also, right,because of the amount of battery
storage in that market and howthe VPPs are really becoming
substantial players forattacking The cost of power and
(23:41):
attacking the duck curve, right?
The duck curve is you get thisbig belly in the middle of the
day because there's so muchsunshine and the solar is
cranking well. Now in theafternoon, you can attack the
head of the dock with thevirtual power plant of batteries
and other resources, otherpeaker resources, but is, do you
have anything else? I mean, Iguess that's also a lingering
(24:05):
question for me. Is becauseCalifornia is so much further
along. You know, they're, theymight be 10 years ahead of most
other states in the country,both legislatively and
practically speaking, does itnot loom so large for you guys
when you're looking at theemerging phenomena?
Vincent Potter (24:31):
I would say yes, it does. Looking at looking at
the development in California.
What's interesting about, youknow, seeing these VPP proposals
is they pair a lot with changeswe see to other der policies,
right? So, like, we have a lotof changes that we flagged with
net metering successor tariffsand whatnot. So changing the
(24:56):
value of electrons, you. Deliverto the grid. We're, in fact,
seeing some support in so wetrack what's going on with
utility business models. And asI said, some of it, some of what
we track is performance basedpolicy options. And so looking
at new utility programs thatdon't pay for exports during
(25:21):
certain hours to reallyincentivize that battery
storage, right? So, like yearsago, and still, now we're
looking at the development oftime of use rates, right? That
kind of time varied. You paymore during peak times. You pay
less during the overnight hourswhen not as many people need it.
And now we're seeingcompensation for kind of exports
(25:42):
to the grid, whether they befrom batteries, from solar, what
have you on site, generation ofsome description, to match that,
to really enhance those gridservices. So some VPP policies
that we're seeing, some VPPproposals would pay more based
on you know, what the chargewould be for those and that
(26:06):
makes it really advantageous andmaximizes the grid services that
you get from ders, Californiahas got some really interesting
strategies. Kaiso has a state ofcharge based compensation
structure for batteries, andCalifornia itself just moves a
lot of the renewable electrons,but they they have also a net
(26:32):
metering program that strongly,strongly incentivizes energy
storage along with selfgeneration for all users,
Tim Montague (26:47):
I have figure four on screen now, and I'll just
zoom in a little bit. You seethat the most active states in
q2 were Texas, California,Colorado, Connecticut,
Massachusetts, Michigan, NewYork and Maine. And I would say
(27:09):
half of those, you know, are nosurprise to me, and half are
somewhat of a surprise, but andthen I'll just, I'll just
describe the differentcategories that are that are
laid out here, studies andinvestigations, utility,
business model and rate reform,incentives, planning and market
(27:29):
access, policies and deployment.
Anything else noteworthy aboutthis before we move on?
Vincent Potter (27:37):
So, yeah, I think so, if you look at so the
orange is studies, right? Sothat's either the legislature or
the governor or the UtilitiesCommission has ordered some
investigation into new gridmodernizing technologies, or how
it might fit some of this isresearch into VPPs battery
(28:01):
storage development incentiveprograms. What we what I
personally find most interestingis that light blue section,
right? And that is utilitybusiness model and rate reform.
So that's when we're looking atcompensation or cost for
consumption during certain hoursor production during certain
hours, and so changes to the waythat utilities get made whole
(28:26):
based on the peak. So givingcustomers better price signals
for when they can choose toconsume or not to consume. Or in
the der space, right in this VPPspace, giving them better price
signals for when it's the besttime to generate beyond what
they need so they can providemore grid services.
Tim Montague (28:51):
Fascinating. All right, let's move on to utility
business models and regulation.
Several states studied orenacted performance based
regulation. This includes Maine,Virginia, Oregon, in your view,
can can performance basedregulation meaningfully,
meaningfully accelerate theintegration of durs and
(29:13):
resilience technologies?
Vincent Potter (29:18):
Well, yes, it can when it's designed
thoughtfully. So if you tell autility that they need
performance, that they need toimplement a performance based
program, having kind of an ideaof the type of performance that
is reasonable to ask for andachievable within the grid,
(29:40):
which is why we see so muchaction of the study space is is
key. So if you have, let's say,for example, a winter peaking
utility whose highest peaks ofthe year are January and
February mornings from five to7am THE. The ways to get them to
(30:01):
deal with that during using derswould be largely through
storage, possibly through windenergy. But the only way you can
get that kind of controlleddispatch during those peak
periods are going to be withwith energy storage if
conversely, your utility andyour state deals mostly with
(30:24):
congestion and throughput onyour transmission lines. Then
maybe something that involvessome of these grid modernizing
technologies, the fault locationor various advanced distribution
management systems ordistributed energy resource
management systems that could bea better implementation for
(30:44):
that, and so it would beperformance of those particular
systems as opposed to storagedeployment. So yes, it certainly
can. But like all policies, ithas to be thoughtfully designed
and implemented.
Tim Montague (30:56):
How new is performance based regulation?
Period
Vincent Potter (31:00):
performance based regulation has been around
for 2025, years. It started withwhat we originally what, what I
believe was called in the late90s, deregulation, and we prefer
to call restructuring now. Soelectric, electric utilities
that were traditionally naturalmonopolies would have been
(31:20):
restructured into kind ofspinning off generation and then
having transmission anddistribution handled by the
utilities. So if you when youdon't have that kind of
monopolistic utility incentiveto just build large generation
(31:41):
assets and get a guaranteed rateof return. It all, it all
becomes performance based, andso we're seeing kind of a
continuation of this
Tim Montague (31:51):
time of use and advanced rate design remain
contentious. Hawaii, forinstance, declined to expand
time of use rates. What lessonsshould other states take from
these mixed outcomes?
Vincent Potter (32:05):
You've got a time of use is one of those
conceptual matters that worksvery, very well if everybody
understands their energy use,right? So as an energy expert,
as an electric sector expert, Iunderstand, you know, this is
the time where I should run mydryer. This is the time where,
(32:27):
you know, it's best to charge myelectric vehicle, if I have an
electric vehicle, or to, youknow, do what have you? Run the
dishwasher, run your AC. Butthat is a level of detail that
many customers just don't havethe time right to deal with so
part of time of use, rate designimplementation really needs to
(32:50):
be an education component,right? You need to get involved
with the customers and help themunderstand how to shift their
energy use, or whether they needto shift their energy use so
it's, it's, you know, ifeverybody is the perfect market
participant that we learnedabout in economics, 102, then it
(33:12):
makes sense for everybodyimmediately. But sometimes
there's an education effort thatneeds to happen to bring people
up to speed.
Tim Montague (33:20):
I think of time of use rates as facilitating the
implementation of storage on thegrid, frankly, and so, you know,
I just kind of generically thinkof time of use as a public good.
But if you're not implementingstorage, and you have patchy
(33:44):
usage that can come back to biteyou right, like, if you have
consistently high usage in thelate afternoon, when energy is
more expensive, but you don'thave a battery, then maybe that
is counterproductive. Is that
Vincent Potter (34:01):
true? Yeah, I would say so energy storage can
kind of reduce the mentalburden, right? Or the kind of
onerous nature of having toremember not to turn this on, or
to set your HVAC back, orsomething like that during these
peak times or peak events, mostretail energy storage that you
(34:25):
would get at home, for instance,right? We work a lot with
residential customers and andtheir advocates, and so there
are ways that you would justprogram right your battery
storage so that it knows whenyour peaks are right, so it can
help kind of optimize itsdispatch, or optimize your
(34:50):
consumption, as it were, ifyou're not injecting to the
grid. And we see a lot of.
Pairing, right? So as as solarexpands, we see a lot of pairing
solar with storage. Both, youknow, in California, where you
you kind of have to to make itcost beneficial, but also in in
(35:11):
other states as well, in NorthCarolina, South Carolina,
Virginia included.
Tim Montague (35:20):
So how are utilities themselves responding
to this wave of regulatory andpolicy change? Do you see
genuine transformation ofbusiness models or more
incremental compliance?
Vincent Potter (35:33):
Utilities tend to be conservative, right? They
move slowly because they have alot of things to manage. We see
a lot of kind of fruitfulconversations around energy
storage deployment. Many of theutility folks that I've spoken
to are genuinely excited aboutgetting more storage on the
(35:55):
grid, because that reduces theamount of kind of work that they
would have to do, it lessens thelikelihood that they'll
encounter something likeCalifornia's duck curve, which
you mentioned before, and soboth customer cited energy
storage and grid. Energy storageis pretty well received. There
(36:18):
are several utilities in theMidwest that are operating
resiliency and energy storage asa service programs as a result
of some of this push towardsgetting more storage on the
grid, so they will have utilityoperated, customer cited energy
storage, so during blue skyconditions, right, the utility
(36:40):
would get to dispatch yourstorage a little bit to meet
some grid demands, and thenduring an outage, if the grid
were to go down, you would thenget backup power out of it. So
that's kind of happy mediumbetween those two, where you can
find common benefits forcustomers and utilities.
Tim Montague (37:05):
Some states like Maryland are incorporating
equity and environmental justiceinto resilience planning. How
well are states doing todemocratizing resilience beyond
corporate campuses andutilities, there's
Vincent Potter (37:22):
always opportunities to do better,
right? We've seen a lot ofadvancements, and we see a lot
of cognition of the locations onthe grid with the most
reliability concerns oftenhappen to be those disadvantaged
communities, those lower wealthcommunities. And so as we have
(37:43):
some we have some performancebased regulation. There are
several utilities in thesoutheast that have to report in
their rate cases on their worstperforming circuits, right their
highest or their lowestreliability circuits. And so how
they can go on and improve thatso that becomes, that becomes a
(38:04):
kind of equity measure a littlebit. And there are many state
programs that we see coming outof like state energy offices in
Louisiana, North Carolina, wesee some, of course, in
Maryland, where the state energyoffices are engaging with lower
(38:25):
wealth communities that haveissues and even there are some
private dollars, so parts ofMinneapolis have resiliency hubs
that provide community serviceswith customer owned solar and
utility owned and operatedbatteries so that they have if
(38:49):
the if the power goes down inMinneapolis, the folks in the
inner city there would stillhave access to charging
refrigerators could keep theirmedications Cold if they needed
it, that kind of thing.
Tim Montague (39:03):
All right, let's talk about the future, looking
ahead. If you step back, whatdoes the next five years of grid
modernization look like? Whatwhich policy or technology trend
will dominate the conversationby 2030
Vincent Potter (39:20):
you know, if I had a crystal ball, I would be,
I might be in a differentbusiness, but based on what
we're seeing, I think we'regoing to see a lot more
advancement in virtual powerplants. We're of course, going
to see more on site generationin either and either like micro
grid development or large loadcustomer specific like grid
(39:42):
development. So with theproliferation of data centers,
it seems like specified policiesfor data centers and other large
load customers. I also expectthat to kind of play into the
micro grid conversation. Solooking, looking at what they
(40:02):
can provide to nearbycommunities in the case of a
grid outage or something likethat, I also think we're going
to see continuing technologyimplementation, right? So so
more and more sophisticateddistribution management systems
and other technology solutionsthat can be implemented so that
(40:23):
we have fewer transmissionrights of way that need to be
taken up. I mean, we're lookingat, you know, transmission lines
that would require additionalrights of way, and that's just,
it's seems to be morecontentious than one that's in
the electric power sector wouldthink, but that's, that's not my
(40:44):
that's not my wheelhouse. But Ithink we'll, we'll try and cover
it with technology solutions asbest as we can.
Tim Montague (40:51):
I guess you know your your opening comments about
the evolution of technology andthis phenomenon that the grid
can become self healing, forexample, when a asset, whether
that's a single transformer ora, you know, a neighborhood,
(41:15):
goes down, the grid, can smartlywork around that problem, per
se, kind of like a biologicalsystem self heals, if you had to
venture kind of writ large todayin America, how close are we to
Having a grid that can, forexample, self heal?
Vincent Potter (41:42):
We so we there are some locations in the
population centers right wherethere's, there's a lot of
distribution infrastructure.
We're going to we see this morecommonly, but when we have to
traverse large distances throughrural America, it's going to be
really, really difficult, justbecause there's not a secondary
line that you can carry thatthrough in some cases, as we see
Puerto Rico continue to developin its energy restructuring
(42:08):
after Hurricane Maria, it is akind of a linkage, almost like
like chain mail armor, of likemicro grids that are just linked
on to one another. And we seesome of this kind of thing
happening elsewhere, where therethere are self healing grids in
(42:30):
the Northeast corridors, inparts of Texas, in parts of the
southeast, where we have largepopulation centers. We've also
done a lot of work withcooperatives that are
traditionally lower on thepopulation density side, right?
These will operate in ruralAmerica largely, but they will
(42:52):
find ways to Island themselvesif there is a if there is an
issue, so they will have housingdevelopments there where they
own batteries, and they'reencouraging their members to
install solar panels so that ifanything were to happen, the
(43:13):
housing development would stayPowered. And we see that
happening here and therethroughout and I'm looking
forward to more of that kind oflike, it's just factoring the
two way flow, right? It's noteverything comes from the
substation and everything comesfrom the the generation station
behind, behind that. If there'scommunity cited energy storage,
(43:37):
and there's community citedenergy generation. How could
that be more equallydistributed? Right? We see
hurricanes in Florida and NorthCarolina. I mean, we had a bad
hurricane last September thatjust washed through Western
North Carolina in the mountains.
(43:59):
And so we're wondering how muchcould micro grids and how much
could islanding have avoided inthat so future course of study,
Tim Montague (44:13):
I don't know if you track what's going on
internationally, but you know,from my perspective, we're
seeing a lot of moves in Europeand Asia towards long duration
storage, hydrogen andresilience, funding. How does
the US actively compare? Sorry,how does the US activity
compare? Are we leading, laggingor simply different?
Vincent Potter (44:37):
I think we're a little bit different, right?
China has a very centralizedkind of national plan. Germany,
Spain, parts of France, for themost part, have like kind of
directives at the nationallevel. But America doesn't
really operate that way, right?
We're thanks to our regulatoryfederalism. We have. Have 54
(44:59):
different regulatoryenvironments that operate. We
have 54 different sets of rulesand statutes. Sometimes we find
a lot of commonality becausethey're linked by, you know, an
interconnection or a regionaltransmission organization or
something like that, andsometimes we see just similar
(45:21):
policy environments, state tostate. But what's what the
policies are in North Carolinadon't necessarily affect what
the policies are in Virginia orTennessee or South Carolina,
because they touch it just likewhat's happening in ERCOT,
right? The Electric ReliabilityCouncil of Texas doesn't affect
all of Texas. It doesn't affectwhat's going on in its
(45:42):
neighboring states, in Arizonaor Louisiana. So we have a very
different system. We havesomething where we need a lot of
economic levers to make it makethe most sense, so we can kind
of do it on a cost basis, but wecan't do it on a mission basis.
Tim Montague (46:08):
So my last question, if you were speaking
directly to project developers,EPCs, investors or community
leaders, what one or twotakeaways would you give them
from this report?
Vincent Potter (46:25):
So I've got different answers for the
different audiences, right? Sofor project developers and EPCs,
it is partnering with yourutility early and understanding
how you can provide value tothem and how they can provide
value to you, right? It's notalways a one way relationship.
(46:48):
And then for communityadvocates, it is finding the
right partnership. So sometimesa community needs to work with
the local government first andthen engage the EPC or
developer. And sometimes theyneed to do it the opposite way,
and start with the developerwith an idea that can then help
them pitch to local governmentfor permitting or what have you.
(47:12):
But I would love to see morecommunity advocacy
organizations, or just communitybased organizations getting more
involved in the energy space.
They're really big in the energyefficiency space already, but I
would love to see them on theder side as well.
Tim Montague (47:31):
Hey guys, are you a residential solar installer
doing light commercial butwanting to scale into large CNI
solar? I'm Tim Montague. I'vedeveloped over 150 megawatts of
commercial solar, and I'vesolved the problem that you're
having you don't know what toolsand technologies you need in
order to successfully close 100KW to megawatt scale projects.
(47:56):
I've developed a commercialsolar accelerator to help
installers exactly like you.
Just go to cleanpowerhour.comclick on strategy and book a
call today. It's totally freewith no obligation. Thanks for
being a listener. I reallyappreciate you listening to the
pod, and I'm Tim Montague, let'sgrow solar and storage. Go to
clean power hour and clickstrategy today. Thanks so much.
(48:19):
All right, we'll leave it there.
Thank you so much. VincentPotter, Policy Project Manager
and author of 50 states of gridmodernization. Q2, 2025, from NC
State clean energy technologycenter.
Vincent Potter (48:39):
It's a mouthful.
I know it is.
Tim Montague (48:43):
Check out all of our content at
cleanpowerhour.com. Please giveus a rating and a review on
Apple or Spotify. Tell a friendabout the show, reach out to me
on LinkedIn. I love hearing frommy listeners and follow us on
YouTube. With that, I'll say,let's grow solar and storage.
I'm Tim Montague, thanks,Vincent, thank you. Tim.
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