Madison Gas and Electric Company Seeks Approval for Distributed Energy Resource Management System

Strategic Insights -

Madison Gas and Electric Company (MGE) is applying for authority to adjust electric and natural gas rates to implement a Distributed Energy Resource Management System (DERMS). The DERMS aims to efficiently manage a diverse portfolio of distributed energy resources, including smart thermostats, solar, batteries, and electric vehicles, to benefit the operation of the distribution system and MGE's customers.

Key Takeaways:

  • MGE proposes to invest in a DERMS to efficiently manage a large diverse portfolio of distributed energy resources and help benefit the operation of the distribution system and MGE's customers.
  • The DERMS will enable MGE to manage and utilize distributed energy resources in concert with the distribution system, providing an efficient, safe, and reliable operation of the distribution system.
  • Widespread penetration of distributed energy resources introduces volatility into the distribution system, which can be challenging to anticipate and manage using traditional utility methods.
  • MGE has existing pilot customer programs that attempt to reduce volatility on the distribution system, but a DERMS is necessary to more efficiently manage the increase in distributed energy resources and their impact on the distribution system.
  • The DERMS will add value to MGE's customers in terms of efficient management of the distribution system, including demand response, localized load management, and distribution system operational support.
  • Implementation of the DERMS is expected to begin in the first quarter of 2026, with a goal of having the system fully implemented and tested to allow for the creation of new customer DER programs ahead of the day when the DER penetration begins to cause significant impacts on the distribution system.

Statistics:

  • MGE sees an increase in the number of interconnect applications for DER customers as the Company's customers continue to electrify.
  • The growth of DER on MGE's distribution system has the potential to add load volatility.
  • MGE is currently talking to various DERMS providers to find a solution that will best fit the Company's needs.
  • Implementation of the DERMS is expected to begin in the first quarter of 2026.

Sources:

  • The Public Service Commission of Wisconsin, Application of Madison Gas and Electric Company for Authority to Adjust Electric and Natural Gas Rates, Docket 3270-UR-126
  • Direct Testimony of Casey Robb on behalf of Madison Gas and Electric Company