IEEE Power & Energy Magazine - March/April 2022 - 21

for operating NWAs for market applications where an
independent operator would assume the main responsibility.
Even for market applications, the utility needs to be
involved to make sure DER market participation does not
compromise the reliability of the distribution grid. Similarly,
for NWAs owned by a third party, the utility is not
engaged in the construction phase.
The role of the commission is normally related to the
review and approval of a utility's plans and decisions except
load and electrification forecasts, which in California are the
responsibility of the CPUC. Third-party independent entities
are typically engaged to review and audit steps such as issuing
requests for proposals, proposal evaluation, and benefit-
cost analysis of NWAs versus grid investment. Feedback and
inputs from DER developers and stakeholders concerning
certain steps, such as NWA requirements, technology and
configuration feasibility, and benefit-cost analysis, would
be very helpful in the process. For NWAs owned by third
parties and for nonreliability DER operations (e.g., behindthe-meter
backup generation), developers should assume the
lead role.
NWA Integration Into Utility
Planning Cycles
Many distribution system upgrades are done on an annual
cycle. In the fall, capacity and reliability issues exposed
in the summer will drive planning, and construction
is planned for the spring to be operational well before
the next summer peaks. Projects are planned based on
the uncovered problems, and engineering designs are
executed to budget these projects. Once reviewed and
approved, the projects proceed to procurement and construction.
The timing of this cycle poses some challenges
to incorporating NWA evaluation, developing NWA
requests for proposals, reviews by independent thirdparty
entities, procurement, negotiation, and contracting,
constructing, testing, and certifying NWAs. Further,
this cycle does not facilitate grid investment as
a fallback should the procurement fail. Therefore, it is
necessary to develop a set of suitability criteria to guide
utility planners as to which projects should be evaluated
for NWA potential.
For example, the routine end-of-life replacement of assets
(poles, transformers, and circuit breakers) is always going
to be more economical and faster than any NWA approach
and should be excluded. The alternative is to extend the
planning cycle to accommodate the NWA procurement
process. California is one of the states that has excluded
these routine, short-term grid upgrades from consideration
for NWAs for this reason. Without a properly defined set
of criteria, the utility planning and budgeting process must
be compressed without compromising the quality and accuracy
of the results. The quality and accuracy of budgeting,
in particular, are critical, as they are the basis of evaluating
NWA solutions.
march/april 2022
NWA Operations
Utilities should develop detailed and comprehensive NWA
operational requirements, especially for nonutility-owned
and operated NWA, as these will provide critical reliability
services to the distribution grid. Unlike in wholesale energy
markets, the performance of a resource in the distribution
grid is not fungible. That is, in wholesale markets, if
a resource fails to meet its scheduling or dispatch, the market
will have ensured sufficient reserves to replace it at the
moment, and the nonperforming resource bears the cost of
that plus any applicable penalties. When an NWA resource
fails to perform, however, some grid constraint is presumably
violated, with implications for asset life, potential customer
service interruptions, and quality reduction. In the
worst case, there could be more than just an underserved
load if grid and customer equipment is damaged.
Different mechanisms can be established to mitigate
NWA nonperformance issues. For example, a utility can
acquire the equivalent of NWA capacity reserves that are
available should primary NWAs fail to ensure the reliability
of the system. Some nonperformance provisions need to be
specified in the contracts with the NWA operator, reflecting
the possible costs to consumers and the utility. The utility
should also include reasonable NWA monitoring and operational
control requirements via integration into its systems to
ensure compliance.
Role of Third Parties and
NWA Stakeholders
Many stakeholders recommend that an independent third
party play a significant role in different stages of NWA planning
and deployment. Consequently, some public commissions
intend to write into law specific roles for independent
entities, from reviewing utility plans (e.g., Connecticut's
strawman proposal) to assessing NWA offers. These stakeholders
argue that involving third parties would improve
the transparency of utility planning and decision-making
processes, enable a leveler field for NWAs to compete with
traditional solutions, and result in more NWA deployment.
Currently, the level of stakeholder engagement varies
by state according to integrated distribution planning and
NWA procedures. In California, independent evaluators
should review utilities' grid assessments, traditional upgrade
candidate solutions eligible for NWA evaluation, and NWA
decisions within a preestablished program framework. However,
evaluators neither conduct grid assessments nor design
NWA solutions. The state uses a distribution investment
deferral framework to assess the potential of NWAs and
procure DERs as infrastructure investment alternatives.
Utilities are responsible for grid planning and soliciting
and evaluating bids, and evaluators are responsible for
monitoring the process and verifying evaluations. Third
parties can also advise utilities on the operation and control
phase by providing technical, operational inputs for different
technologies.
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IEEE Power & Energy Magazine - March/April 2022

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