IEEE Power & Energy Magazine - January/February 2020 - 25

known as the aggregator. Aggregators represent generation
assets and load-serving entities consisting of a broad range
of residential, commercial, and other customers and can
interact at the retail and wholesale levels, which adds value
to the assets.
Aggregators do not have the burden of legacy systems
owned by incumbent electric utilities and can take advantage of newer technologies. They can deliver an enhanced
set of services to their customers by combining such technologies as the IoT, DA, wireless communications, cloud
computing, and smartphone apps. Taking lessons from their
counterparts in Texas, these aggregators also are able to
bundle other services, such as home security and Internet
access, into one bill with a common customer service location. All of this leads to improved customer satisfaction.
Aggregators want to bypass the distribution operator and
work directly with the wholesale electric markets, which
will wreak havoc on distribution system management
unless an architectural structure is put in place to address
coordination frameworks.
The aggregator is still a new construct with nascent
business models. The introduction of the microgrid and
the more granular nanogrid as a technical construct and
the controls associated with them have created new tools
for the aggregator, which can only get more sophisticated
over time.

Retail Markets
Many parts of the United States and several countries have
established wholesale markets. Although a few countries
have evolved to retail markets, full-scale retail markets in the
United States have mostly been restricted to Texas under the
Electric Reliability Council of Texas. More recently, New
York has started stakeholder discussions of a retail electricity market under REV. The distribution system platform provider would be responsible for three main tasks: planning,
grid operations, and market operations. The California Public Utility Commission has also been considering the formation of retail markets in the near to midterm. Although the
exact form of retail markets remains unclear, regulators in
North America are considering the creation of distribution
system operators, which would focus on the distribution system similar to the way independent system operators/regional
transmission organizations (ISOs/RTOs) perform transmission-level functions.
There are many discussions about the nature of distribution markets. Some analysts expect a top-down approach,
in which ISO/RTO markets expand in scope and administer
the distribution grid. Another school of thought looks at a
bottom-up approach focused on the principles of transactive
energy, a mechanism that supports local energy markets for
coordinating distributed resource operations with the bulk
power system. The concept of transactive energy at a retail
level is gaining traction as spurred by an anticipated rise in

january/february 2020

Community Choice Aggregation
Community choice aggregation (CCA) is a system adopted into law in Massachusetts, New York, Ohio, California, New Jersey, Rhode Island, and Illinois. It allows
cities, counties, and some special districts to aggregate
the buying power of individual customers within a defined jurisdiction to secure alternative energy supply
contracts on a community-wide basis; it also allows
consumers not wishing to participate to opt out. CCAs
now serve nearly 5% of all Americans living in more than
1,300 municipalities.

the number of prosumers, which requires a retail market
equivalent to the power exchange/market operator at the
wholesale level.

This Is Transformational-The Entire
Utility Needs to Change
The transformation of the electric power industry affects
T&D system operations, outage management, customer
service, asset management, corporate investment and planning, and business models. The structural and organizational changes defined in this article will become even more
important as the utility and its distribution system operating
environment become more complex in a future where the
utility will need to integrate its functions with customers and
other businesses as identified.

For Further Reading
U.S. Department of Energy, "Voice of experience: Insights
into advanced distribution management systems," 2015.
[Online]. Available: https://www.smartgrid.gov/ADMS.html
R. Melton et al., "Leveraging standards to create an
open platform for the development of advanced distribution applications," IEEE Access, vol. 6, pp. 37,361-37,370,
June 2018.
M. Vadari, Smart Grid Redefined: Transformation of the
Electric Utility. Norwood, MA: Artech House, 2018.
M. Vadari, Electric System Operations-Evolving to the
Modern Grid. Norwood, MA: Artech House, 2012.
IEEE, "IEEE power transmission and distribution standards," IEEE Xplore, 2019. [Online]. Available: https://innovate
.ieee.org/ieee-power-transmission-and-distribution-standards
U.S. Department of Energy, "Modern distribution grid
project," 2019. [Online]. Available: https://gridarchitecture
.pnnl.gov/modern-grid-distribution-project.aspx

Biography
Mani Vadari is with Modern Grid Solutions, Redmond,
Washington.
p&e

ieee power & energy magazine

https://www.smartgrid.gov/ADMS.html https://innovate.ieee.org/ieee-power-transmission-and-distribution-standards https://innovate.ieee.org/ieee-power-transmission-and-distribution-standards https://gridarchitecture.pnnl.gov/modern-grid-distribution-project.aspx https://gridarchitecture.pnnl.gov/modern-grid-distribution-project.aspx

IEEE Power & Energy Magazine - January/February 2020

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