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Renewable energy industry encourages Illinois regulators to finalize cloud-based computing rule

A proposed rule by the Illinois Commerce Commission (ICC) that would financially treat utilities’ cloud-based computing software the same as on-site computing systems has found strong support from the renewable energy industry. © Shutterstock Todd Foley, senior vice president of Policy and Government Affairs for the American Council on Renewable Energy (ACORE), said the rule would level the playing field for all parties. “This rule, proposed by the Illinois Commerce Commission, would allow utilities to treat cloud computing resources as a capital expense, the same accounting treatment as traditional on-site computing resources,” Foley said in a written statement. “Advanced technologies, like cloud computing resources, promote a more flexible grid system which is key to increased generation of renewable energy resources, grid reliability, low-cost power for consumers and emissions reductions.” The rule is currently under consideration by the the Illinois Joint Committee on Administrative Rules (JCAR), who held a hearing on the matter on Tuesday. Last week, the CEOs of ACORE, the American Wind Energy Association (AWEA) and the Solar Energy Industries Association (SEIA) wrote to the joint committee, giving unanimous support to efforts that would allow the renewable energy industry to better manage large amounts of data quicker and cheaper. In that way, they emphasized, more rapid deployment of renewables to the grid would be possible. The CEOs noted in a joint letter that in recent years utility-scale wind and solar energy have grown to provide nearly 8 percent of the nation’s electricity with even more growth expected. Distributed generation and distributed energy resources have transformed the energy grid with two-way power flows and increased interconnections across the distribution system. “All of these new technologies are creating large amounts of data and require advanced data management systems for utilities to be able to efficiently accommodate these technologies into the grid,” the letter said. “While we do not propose to know which computing system is best for a utility, we are confident that we do not want utilities to be forced to make technology decisions based on outdated accounting rules,” the CEOs wrote. The CEOs pointed out that utilities are disincentivized from introducing cloud computing resources due to the present nature of regulatory accounting models. That model treats such costs as operating expenses, whereas on-site computing systems are a capital expense. What the ICC has proposed is to provide a new, more comparable accounting treatment for cloud-based computing solutions and more traditional computing elements. Any public utility would be able to utilize this rule change to minimize differences in regulatory accounting, dubbing cloud computing as a regulatory asset, and thus, a capital expense. They could then include such costs in rate cases, which would be subject to the Commission determining that the costs were reasonable. This would not be without restrictions. Only costs incurred through a given period, in relation to cloud computing solutions or services, would be able to be designated regulatory assets. They would have to be associated with specific service contracts and properly amortized. Utilities would also […]

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