Dive Brief:

• The Arizona Corporation Commission on Monday opened the nation's first state regulatory docket expressly focused on transactive energy at the request of Commissioner Andy Tobin.
• Other states have addressed transactive energy — the ability for consumers to trade electricity services in real time — in generic utility reform dockets, but Arizona's proceeding is the first to target the issue in its own proceeding, said Coley Girouard, senior associate at Advanced Energy Economy, a cleantech trade group.
• Tobin expects the docket to address a swath of transactive energy issues, including the internet of things, cybersecurity, utility accounting, tracking renewable energy credits and applications for distributed ledger technologies on the grid, his office said in a release. 

Dive Insight:

Today, transactive energy is more of a concept than a reality, but Tobin's new regulatory docket could combine with other state efforts and some nascent utility pilots to help take the technology into the mainstream. 

The concept refers to a system where distributed energy resources can receive real-time compensation, likely through the use of a digital ledger based on blockchain technology, which today allows traders of cryptocurrencies like Bitcoin to make instantaneous, anonymous transactions. 

In the power sector, transactive energy boosters envision a grid where owners of DERs like rooftop solar or electric vehicles could do the same, trading electricity between themselves or with the utility. National Grid and Southern California Edison both have small transactive energy pilots, and California, New York and Arizona have addressed some aspects of the concept in general utility reform proceedings. 

Tobin's office said his desire for the docket came from research on his Arizona Energy Modernization Plan, which envisions an 80% clean energy mandate by 2050 and includes changes to the utility planning in the state. The commissioner filed a set of proposed rules for that plan last week, but the ACC Chair Tom Forese did not place them on the agenda for the commission's July 19 meeting. 

Tobin's office is hopeful the ACC will take up his broader utility reforms later, which could help pave the way for the transactive energy docket. Preparing Arizona for blockchain technology could be challenging without further reforms to the state's utilities, which remain vertically integrated, said Sonia Aggarwal, vice president at the think tank Energy Innovation.

"By another name, ‘transactive energy’ is advanced rate design focused on creating a marketplace for lots of providers and consumers," Aggarwal wrote in an email. "If you envision the utility as the platform, (or the distribution system optimizer — which I think could be a very interesting business for utilities), you need to couple transactive energy with broader reforms that address the utility capital bias. Otherwise you’ll end up with a very lopsided market."