So far, New York’s Reforming the Energy Vision initiative has been a bold vision for how the state's power system will be transformed, albeit one with a murky timeframe.
On Thursday, more details emerged about how New York will go from its current structure to one where distribution utilities are platform providers for a distributed energy system.
Governor Andrew Cuomo announced that utilities will have to coordinate and partner with other companies to provide local, clean energy solutions.
“A 21st century economy needs a 21st century power grid, and these reforms will ensure New Yorkers get the best possible service from their utilities while improving the statewide economy," Governor Cuomo said in a statement.
The first step will be a white paper from the NY Public Service Commission that looks at the costs and benefits of distributed energy and energy efficiency as they relate to utility expenditures, an analysis that will account for environmental and social factors. The white paper will be due for comment by May.
“What I expect to see is a thoughtful process of how we can have a consistent approach,” said PSC Chair Audrey Zibelman, “so we won’t have to relitigate it every time.” The approach will have to be flexible enough to handle changing market conditions, but prescriptive enough to support those markets -- and an energy system that ultimately values efficiency.
The PSC is also launching Track Two of REV, which tackles the regulatory and ratemaking overhaul that will have to happen in order for REV to be fully realized. Zibelman said the focus there will be on outcome-based procedures, such as how well utilities are integrating distributed energy or driving efficiency. The PSC staff will issue a straw proposal on performance-based ratemaking by June.
One of the most important steps is the call for utilities to file their distributed system implementation plans by December 15. The plans will have to outline the role and functions of being a distributed system platform provider and how these will be integrated into current utility planning processes.
Another key aspect of the plans will be how the utilities interpret the technology and architecture that will be needed in order to allow them to act as Distributed System Platform Providers (DSPPs) and to provide data information services to third-party clean energy providers.
Along with these three specific REV steps, New York is also considering making changes to demand respond tariffs, net metering requirements and community choice aggregation.
All of the changes coming to New York will likely prompt some contentious debate. Many stakeholders have called for independent DSPPs, rather than having utilities serve as platform operators. Zibelman noted that that approach would be impractical in light of the timeline in which New York hopes to overhaul its energy system. “Who would fund it? Who would pay for it?” she asked. “This is the role of the regulated utility,” she said. “It’s their role to integrate these resources.”
Utilities, on the other hand, want to own and operate distributed energy resources, a role that will be restricted according to the current vision for REV. “By restricting utilities from owning local power generation and other energy resources, customers will benefit from a more competitive market, with utilities working and partnering with other companies and service providers,” the New York PSC said in a statement.
There will be exceptions, said Zibelman, such as providing services to low-income customers or multifamily units. Also, utilities might be allowed to own storage that is not behind the meter. However, utilities will not be able to be the platform provider and own the assets, as some utilities have expressed interest in doing.
“The pace of change and innovation will be driven by consumers and markets instead of utilities and regulators,” said Zibelman, “and that’s really exciting."