EL-2/ERE-3Resolution Supporting the Rapid Deployment of Voltage Optimization 

Technologies

WHEREAS, Adequate and reliable electric power is critical; and

WHEREAS, Each electric utility system is unique and States are in the best position to 

determine the appropriate activities to be employed in modernizing the distribution of electric 

power by electric utilities under their jurisdiction; and

WHEREAS, Some electric utilities, under State legislative guidance and regulatory oversight, 

have instituted initiatives designed to modernize the electric power grid to make it more 

efficient, more responsive and more secure; and

WHEREAS, Volt Var Optimization (VVO) technology deployment can be used as an important 

component of electric power grid modernization; and

WHEREAS, VVO technology has been proven through in-field deployments to deliver energy 

and demand reduction benefits, and these benefits have been independently verified; and

WHEREAS, These energy efficiency and demand reduction gains from VVO deployment are 

immediate, predictable, and measureable; and

WHEREAS, Since the VVO technology is typically installed on the utility side of the meter 

through an investment by the utility, with the possibility for rate base treatment, VVO benefits 

typically require no change in the consumer’s home or business building structures, equipment 

purchases or uses, or behavior modification; and

WHEREAS, VVO technology deployment improves efficient delivery of energy and demand 

and these improvements are immediately reflected on consumers electric meters and reduce their 

electric bills; and

WHEREAS, The benefit-cost analytical results typically demonstrate that VVO technology 

investment is cost-effective from a ratepayer perspective; and

WHEREAS, Many States have legislative or regulatory Energy Efficiency Resource Standards 

(EERS) or regulatory expectations for electric utilities to provide for increasing amounts of 

energy and demand reductions; and

WHEREAS, Similar to traditional energy efficiency programs, VVO technology deployment 

can result in reductions of electric utility revenues, specifically revenues that are relied upon by 

electric utilities to cover fixed costs of investment and operations; and 

WHEREAS, The impact of lost electric utility revenues can also be mitigated with the 

development and application of appropriate cost of service and rate designs, identifying the fixed 

costs of investment and operations which should not be recovered on the basis of customer 

consumption, but instead recovered through more appropriate means; and 
WHEREAS, The energy efficiency impacts of VVO eliminate air emissions associated with the 

forgone energy production, and therefore provide an important tool to help States and electric 

utilities in meeting environmental compliance requirements; and

WHEREAS, Deployment of VVO technology serves as a platform for potential future grid 

modernization initiatives that can deliver operational visibility, efficiency, and control of the 

electric distribution grid, improving reliability and customer service for a relatively small 

incremental investment; and

WHEREAS, Investment in VVO can create new employment opportunities related to the 

manufacturing of equipment and construction jobs associated with deployment, as well as utilitysector jobs associated with the operation of the VVO technology; and 

WHEREAS, VVO technology can be deployed incrementally as determined cost effective and 

as financial conditions and fiscal prudency allow, now, therefore be it

RESOLVED, That the National Association of Regulatory Utility Commissioners (NARUC) 

convened at its 2012 Annual Meeting in Baltimore, Maryland and encourages State public 

service commissions to evaluate the energy efficiency and demand reduction opportunities that 

can be achieved with the deployment of Volt-Var Optimization (VVO) technologies and other 

electric utility grid modernization technologies and activities, and use of appropriate 

measurement and verification tools to ensure that such technologies provide the projected 

savings; and be it further

RESOLVED, That State evaluation is a preferable course to the establishment of federal 

standards or guidelines that may not reflect the fact that each utility system is unique and the 

States are in the best position to determine the appropriate activities to be employed in 

modernizing the distribution of electric power by electric utilities under their jurisdiction; and be 

it further

RESOLVED, That NARUC encourages State public service commissions to work with State 

legislatures, State energy offices, governors’ offices, other State agencies, and Regional 

Transmission Organization (RTO’S)/Independent System Operator(ISO’s) as needed, to certify 

energy efficiency and demand reductions associated with utility grid modernization efforts, 

including, but not limited to, the deployment of VVO technologies, as qualified resources in 

meeting legislative or regulatory Energy Efficiency Resource Standards (EERS) and/or 

regulatory expectations and orders to achieve prescribed levels of energy and demand reductions; 

and be it further

RESOLVED, That NARUC encourages State public service commissions to consider 

appropriate regulatory cost recovery mechanisms as appropriate in their respective States to 

ensure that electric utilities can reduce the reliance on customers’ consumption to recover costs, 

and so that utilities and customers are not financially burdened as a result of achieving the 

benefits from the energy and demand reductions while experiencing reduced contributions to 
costs associated with the energy sales reductions produced by the VVO technology deployment; 

and be it further

RESOLVED, That NARUC encourages State public service commissions to avoid 

implementing policies that result in unnecessary barriers to the deployment of VVO 

technologies.

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Sponsored by the Committee on Electricity and the Committee on Energy Resources and the 

Environment

Adopted by the Board of Directors, November 13, 2012

Adopted by the NARUC Committee of the Whole, November 14, 2012