Stephen Lacey: It's been nearly three years since New York launched one of the most ambitious reform efforts in the history of electricity. It is called "Reforming the Energy Vision," and we're now a few years on since that vision was first articulated in New York. So it's a good time for us to ask what has REV accomplished so far? Is the state any closer to redesigning the electricity market than it was three years ago?
And this week you and I talked to Lisa Frantzis who's the Senior Vice President of Advanced Energy Economy and who's been knee deep in the acronyms and buzz words there in New York and she's going to guide us through REV.
I enjoyed this conversation quite a bit because I like many others have been eyeing REV from a 30,000-foot view. We have reporters who cover this stuff in greater detail, but it's just helpful for me to kind of understand all the details because it is an extraordinarily complex undertaking. So Shayle, for you what should listeners take away from this conversation?
Shayle Kann: I think to your question, is New York any closer to reinventing electricity? The answer is definitely yes, it's closer than it was three years ago when REV was kicked off. The real, sort of the status of REV today is one where depending on your frame of reference it's either really frustrating how slow progress is going and how many roadblocks are emerging or it's really exciting and we never should have expected this to go as rapidly as it has in the first place.
So I think it's interesting to just talk about the pace of progress which we did a fair bit with Lisa and try to take a step back and understand how massive the transformation New York is trying to undergo really is and thus set our expectations accordingly.
Stephen Lacey: So my takeaway from this interview is that three years feels like a long time but it actually isn't that long when you consider the scope of what New York is trying to do. As I talk to folks who are connected to the process, many of whom have their own pet issues among this broader package of reforms, I hear conflicting takes and a decent amount of frustration. I think you'll hear Lisa provide a more positive take on the overall process, and I'm actually curious to hear from listeners who are following REV if you agree with her on her progress report, and you can Tweet at us. Both Shayle and I are on Twitter and love to hear from you and we'd love to bat around some responses to this show.
Before we talk to Lisa Frantzis, let's talk about our reading list. Shayle, what kind of pages are you flipping through these days?
Shayle Kann: Well, ever since our conversation with Jessie Jenkins a few weeks ago and even before that a little bit I've been on sort of a deep decarbonization reading kick. So the German government is hosting the G20 this year, and ahead of that they asked the IEA, the International Energy Agency and IRENA, the International Renewable Energy Agency to put together a report that basically models out what would it take from a global standpoint in order for us to have an energy transformation that is rapid enough that we have at least a 66 percent chance of hitting the Paris agreement's 2 degrees Celsius climate change target.
So just as a reminder, the Paris agreement has that target within it but then there's a bunch of individual commitments that all the countries that agreed to it made and those commitments in aggregate do not get us to 2 degrees Celsius. So the question is what would it actually take to get us to 2 degrees Celsius?
And the report is terrifying mostly because it makes you realize how much further we would need to go and how fast it would have to happen.
Stephen Lacey: You basically have to double decarbonization rates every decade, right?
Shayle Kann: Yes. But this goes real detailed into exactly what would have to happen in each sector. How you have to decarbonize power, but also how you have to decarbonize transportation and industry and all the major sources in the energy sector of emissions. And there's lots in it. It's like a 200-page report.
But the one that caught my eye early on, which is something that I'm realizing that we didn't spend a whole lot of time talking about with Jesse, so I wanted to mention it here, is how much we'd have to ramp up investments in efficiency. So in the IEA's modeling as an example, in 2015 globally, we spent something like $250 billion just on efficiency. And that's not just in the power sector, right? This is industrial process efficiency. This includes things like CAFE standard type efficiency and transportation. So just energy efficiency more generally.
So we spent about $250 billion last year. By the end of the first half of this century, 2041 to 2050, we'd have to be spending about $1.5 trillion a year on efficiency.
Deep decarbonization requires investment in new technologies, and all the things that we talked about with Jesse. But let's not forget about efficiency, because that's core to any of these scenarios.
Stephen Lacey: Agreed. Speaking of monumental tasks, let's turn our attention to New York's REV effort now, and listen to our interview with Lisa Frantzis, the Senior VP at Advanced Energy Economy.
We'll hear a little bit more about how things have been going over the last three years. And talk about some specific tracks that are particularly important to the process. And then look at some states that may or may not be following in the footsteps of REV, but are certainly thinking about their own reformation plans as well.
Lisa Frantzis: I think people get so caught in the weeds, they don't stand back and say, "Okay, let's change from three years ago. And I think in my perspective some of the main changes have been the utilities' role, and the rules under which they operate. And I think there's five key things frankly that I'd probably like to highlight.
One is, now the utility is a facilitator of the DER market. And by the way distribute energy resources, when I say DER I'm including in that energy efficiency, demand response, storage, fuel cells, combined heat and power, renewable storage. So it's quite a broad array of technologies.
So the utilities will condition you to own, operate, and maintain the electric distribution system, like the poles, the wires, and the transformers that deliver electricity to homes and business as sort of a core function.
But now they're taking on this role as facilitating this DER market, which is new. The other thing is really the earning opportunities are shifting more toward performance and outputs. So now the utilities can earn revenue through their traditional cost of service revenue. But also it's really good to be moving much more toward outcome based performance incentives that are tied to specific state policy goals.
Tied to facilitating customer demand, and customer driven markets, and savings achieved using DER solutions for grid needs. So to me that's a big deal. I think so much utility focus has been on inputs. You know, "Let's put more capital assets in the ground and we'll get our regulated rate of return." But now it saying, "Look, we're going to look at what kind of performance outcomes you're achieving. Let's reward those."
The third thing is probably a change in the way utilities plan. And right now they've got something called DSIP, or the Distributed System Implementation Plan. And this is basically a five year planning road map for modernizing the grid and meeting the state energy goal. And one of the things that they required is that it really be a collaborative process that has to be part of the core piece of that.
And I think one of the things that's starting to come out of that, it's not quite where everybody wants it to be, is unprecedented levels of access to system data, and also customer level data by the utilities. And making that available. And I think the goal is to get location specific information on the grid needs.
So we can talk about that latter because I know that access to data is a big deal, but I do think we have made changes in the right direction there.
The fourth thing is how the utilities do investments. Now they have something called the BCA handbook. It's really just a benefit cost analysis that they have to go through when they make investments. And cost of carbon is now a factor in there. It's not an externality, so that's also a change.
And then finally, I think demonstrations. The way the utilities have been asked to do demonstration now, by the commission, is a way that almost institutionalizes innovation. These demonstration programs, they're not just about technologies. Actually in fact they're supposed to be much more about business models, and testing some of the business models changes that are out there. And also focusing on partnerships.
So I think, to me, those are big changes in the way that utilities have traditionally operated and where they're operating now. This is the order that took place in 2016, so a lot of this is starting to move forward. They're significant changes and they'll take time for impact. But I think they're significant.
Stephen Lacey: So two points here. One, I think, just to your point about including the social cost of carbon within those calculations it's a timely thing to note, given that President Trump is signing an executive order today removing the social cost of carbon calculation from anything that the federal government does. So good on New York for adding it in.
But I think it probably would be a stretch to say that almost anything that you mentioned is active today. Right?
We just got a DSIP order two weeks ago, or something like that, that was 36 pages long, doesn't have a lot of detail. The utility business model question. There was a good order that said, "Here are the ways that utilities can have earnings opportunities in this new world." But it didn't have any numbers in it. It just had the ideas.
So I think the frustration that some people feel, and maybe this is sort of a crisis of setting the wrong expectations, but some people's frustration is, "Look we can issue dozens of orders and paint this pretty picture, but when's it going to start happening?"
Lisa Frantzis: Yes. And I listen. Our members are in the thick of this. We represent the business voice. We're regularly engaging with GE and Schneider, and all these companies, Stem and others that are playing in these market places. Many of the solar companies. We facilitated the solar progress partnership discussions between the joint utilities and the solar companies.
Access to data was a huge issue. And I think the DSIPs are great in the sense that they're providing the low forecast data, but they fall short of cost information on the system. I know that our members really want to see more cost information to better assess the benefit of cost of a particular service or product that they want to put on the feeder.
And it just doesn't exist. And I think the utilities claim there are privacy issues and they don't have that level of data. And so things may take longer to unfold in some of these instances. But I certainly hear the frustration of many of our members on a number of these things, but the other thing I would say is, New York is trying to do the most comprehension regulatory reform of any state in the US right now.
And it's not simple. You've got a variety of different technologies. It's not just about solar. It's about all the technologies we've been talking about with DER. We've got a tremendous amount of stakeholders to appease. You've got environmental groups, low income groups, utilities, the energy service providers, environmental groups.
It's a lot of stakeholders and a lot of technologies to find a win-win that's going to work for everybody. I think the commission has tried very hard I think to bring the stakeholders to the table to try to work things out. But I don't think it's going to be something that's going to happen overnight.
It's going to be an evolution. There are going to be set backs. And there is going to be progress. I think we just have to be patient because I think it's not an easy thing to do to change the way business has been done over, pretty much, a hundred years without much change to the business model side of things. So I think there are challenges and I just would encourage people to stay engaged because I think there's still a lot that needs to be done.
Even with the recent orders, the value of DER phase one, and I don't know if you want me to get into that or not.
Stephen Lacey: I think it would be helpful to get into that. And then I actually just want to go back to regulatory 101 and talk about how these things actually get implemented. But first let's unpack both of those.
This is my favorite acronym by far. This value of distributed resources one, VDER.
Shayle Kann: VDER? Oh, man.
Lisa Frantzis: Yeah. We call it VADER at AEE. I think most of the industry calls it VDER.
Stephen Lacey: I'm calling it VADER. VADER is great.
Shayle Kann: I'm partial to the California acronyms. I like DERP. That's Distributed Energy Resource Provider to CAISO. We can go acronym to acronym across the country.
Lisa Frantzis: There's certainly a lot of them. We could be here all day.
Stephen Lacey: Tell us what VDER does. VDER is designed to find the appropriate value for these distributed resources. Things like solar. It will apply first to large scale systems and non residential systems. Then eventually take over and replace net metering at some point in time.
What does it do?
Lisa Frantzis: First of all it applies to eligible technologies. I think that's typically less than two megawatts. It's PV, wind, micro hydro, fuel cells, micro CHP, farm waste. We all know net metering has come under attack, I think, in many places other than just New York. Right? It's simple, but it's not effective for targeting locations, and it doesn't necessarily accurately reflect DER value. I think that's the real challenge. Then I think the phase one tariff that has just been proposed on March 9th by the commission, it really begins to move us closer to accurately compensating and valuing DER. And also managing non participant impact.
This is another huge issue. Some term it cross subsidization. We try to avoid that because it's really managing the non participant impacts. I think this tariff moves closer in that direction. Some limitations is I think this tariff focuses only really on exported energy. And we have some issues with the order.
We have started articulating to the commission, but if it's done right, it's going to move us in the direction I think we need to go.
Shayle Kann: So how about the other big order that was shorter than I anticipated, but is equally important, which was the DSIP order? Can you walk through briefly what's in there and what's coming next?
Lisa Frantzis: The DSIP order, that's also a step in the right direction. It's requiring the utilities to screen for non-wires alternatives in their planning. I think the thing I really like about it is they have to complete hosting capacity analysis by October 1.
So that's fully understanding where potentially there's capacity for adding things like solar from the grid. And then they have to have fully implemented interconnection portals by October first as well. They have to deploy, I think it's two energy storage projects per utility. And that has to be done by the end of 2018.
So these are all great things. And I think it's supposed to really facilitate the access to system and customer data for the third party service providers. But I think some of the areas we felt it fell short - there wasn't much on electric vehicles to help accelerate deployment there. And we felt the load forecast for DER is also pretty conservative. We felt they could have gone a little further.
Stephen Lacey: The two main criticisms I've seen are they didn't do enough with electric vehicles. And that two storage projects by 2018 seemed really low as well.
Lisa Frantzis: Yes, I think those are issues. I think what a lot of our members want is what I mentioned earlier. It's not just load forecast data. They want cost information on the feeders. Because in order to do a proper benefit cost analysis you need to do that. You have to have cost information to understand how much benefit your product is providing to the grid.
And that has been a contentious issue. I think on the systems side. And then getting access to granular customer data. Like real time customer data has been the other thing. And I know the utilities in the past have pushed back a little bit on that, claiming there's privacy issues related to customer data. And these are issues that need to be resolved.
Stephen Lacey: Is your sense, just sort of stepping back, that when the REV initiative was launched, the architects thereof, Richard Kauffman and Audrey Zibelman, sort of laid out the vision and their first orders were laying out a timeline around it. Do you think they were just overly ambitious with how quickly this could all progress and that's what's causing some frustration here?
Because like you're saying, it's incredibly complicated. It is a huge transformation. The idea of having tried to get it done in three years, in retrospect, seems kind of crazy. And yet I do think that every step along this way there's been some sense of things progressing slower than expected.
Lisa Frantzis: This is my own personal perspective, but I think there was a very good reason Audrey wanted to get as much done in three years. Typically commissioner appointments are three to four years, and as we see Audrey has already moved on after three.
I think she really wanted to establish a strong foundation so that if she were to move on things would continue. This is my own personal opinion that she was pushing very hard to get as much done as she could before she would have to leave. And I think she's done an excellent job at that. Because this is not easy.
I think yes there were people who would have liked it to maybe move slower, but I have also heard from others that they wished it could move faster. I think, frankly, we are probably where we need to be. Is everything where we want it to be? No. But I certainly think there's a process in place for making sure we can get to a better place.
At least I'm hoping that.
Shayle Kann: But Audrey didn't actually have to leave. She decided to leave. Audrey's the chair of the Public Service Commission for the DPS in New York, and she's announced that she's leaving to go run the Australian wholesale market operator.
Stephen Lacey: Which is going to be a hard challenge in and of itself.
Shayle Kann: Which has it's own set of issues. But I guess the question I'm asking is, do you think she intended this whole time to say, "I'm going to get as much done in three years as possible, and go move Down Under? Or was there something else going on that led her to say, "Ok, this train has enough momentum without me. It's ok for me to go."
Lisa Frantzis: I think it's probably more the latter than the former, but who knows? She probably just wanted a change too. Doing what she's done in three years? That takes a lot out of anybody. All of us who have been in it know it has been a whirlwind, and challenging, taking up a lot of our resources.
It's not just the Advanced Energy Economy, but our member's time, and the time they've committed to this. There are other markets people have to focus on. I think a lot has been accomplished. I think she probably felt it was in a strong enough place that somebody who takes her place, whoever that may be will continue to make it move forward.
And I think it really has. If I look back, even in the discussion we're having in other states right now, I have seen a huge change in the way people are thinking about the 21st century electricity system, grid modernization, performance based regulation.
We weren't having these same discussions three years ago. And I really think Audrey has changed the mindset of utilities and making them realize there could be an opportunity here for a win-win. Not just for the utilities but for the third party providers, and potentially for customers as well.
Just even changing that mindset has had a big impact in my opinion. And I think that's part of the value. If you want we could talk about some of the other states.
Stephen Lacey: Let's do that. But first I want to get a better sense of where we're at. And what all the pieces are swirling around REV. I think it's just helpful to understand how a proposal becomes an order and then gets implemented. And where the different stages are for many of these orders. And as we move from phase one to phase two, it's all just a bunch of regulatory jargon that if you're not in it every day seems very confusing. Could you just take all these pieces and put them together and help us understand how they all fit together?
Lisa Frantzis: Maybe we should talk a little bit then about the demos. Because I think the demonstration programs are hopefully a way of beginning to take some of these pieces and test them. And if they work, I think the demos are really about bringing third parties together in working with utilities. Focusing on the customer and beginning to test the business models.
Not just the technologies but testing the business model. Everybody's heard about BQDM Which is the Brooklyn Queens Demand Management project. Another acronym program which deferred $1.2 billion of distribution system improvements for about five years. And instead authorized ConEd to spend $200 million to procure mostly customer-sited solutions like DER.
Stephen Lacey: Which interestingly was proposed before REV though, right?
Lisa Frantzis: Yes. Well, it's part of REV. REV is not just the order. REV, at least at the governor's office, is a sort of a broad umbrella for many of the things going on in New York.
So there's a whole other group of demonstration programs, but I think BQDM came into place in 2014 which was sort of when REV was unfolding, but I think it did depict some of the elements that they're trying to achieve in REV. Which is here they're incentivizing with a hundred basis points, ConEd to do more of these non-wires solutions, like DER. So if they met their targets they would earn additional incentives.
If they met megawatts deployed, cost effectiveness and third party participation metrics. So again moving toward performance incentive and rewarding that versus just cost of service. And if you look at some of the other demonstrations that they're doing formally as part of the REV order. I think there's about 17 projects that are listed on the website. They're business model focused.
It's looking at the DSP functionality. The Distributed System Platform functionality. It's looking at customer responses to programs and prices. It's looking at cost effective implementation of REV. So those are the kinds of things they're testing.
Stephen Lacey: They kind of range from online platforms for customers to actual aggregated behind the meter systems, right?
Lisa Frantzis: Yes, I'll give you a couple examples. The online customer engagement market place for example. That's an Orange & Rockland proposed demo. It's basically an engagement platform that they're developing with simple energy. They have the My ORU store, or the My ORU advisor, which I think they launched to 80,000 customers.
And that's leveraging customer data and analytics, to help customer basically find products and services like WiFi thermostats and LED lights. And in return the customer will get a personalized home energy report.
In comparison ConEd is doing this clean virtual power plant with SunPower and Sunverge where they're bundling solar with storage. And then they're testing fleets of the solar and storage systems in hundreds of residential homes to see how they can collectively provide benefits to the grid. And resiliency to customers.
Making sure the lights are on when there's an outage for example. And they're in the middle now of currently just testing some of the software and the server for this data connection. And then there's the National Grid, which has the Buffalo and Niagara medical campus. Basically they're testing the intelligent network. Or what we're calling the Distributed System Platform functionality with participating DER throughout the campus.
And they're doing that with Opus One Solutions. And I think here it's about again providing one platform that'll allow customer owned DER to participate in energy and ancillary services for the grid. And using some locational pricing. And so this is all about the financial model which they're working on and it's really looking at the locational value of generation on the distribution system.
Shayle Kann: As we move on to talking about other states, I just want to ask about California before we talk about other less obvious states. So if you look at what's going on in New York, almost everyone of the individual components of REV is also underway in California.
You have a similar value of DER type of thing going on. You have some demonstration projects. You have the integrated capacity analysis maps that the utilities are forced to develop. You have sort of the business model questions being addressed less head on but there was an order -- or I guess it wasn't an order -- there was a proposal from Commissioner Florio before he stepped down about that.
But it feels to me like, from a broad national standpoint, California is sort of doing this bottom up. It's just sort of order by order. Whereas REV went top down. It said, "Here's our vision. Now let's create all the component parts within it." So do you feel like that's the right way to frame the differences between the two? And do you think that either one of those two mechanisms has been more effective so far?
Lisa Frantzis: The drivers are also very different in each state. I think California has so much more solar on the grid that they had to deal with. I think it was Hurricane Sandy, probably, that was one of the main drivers in New York. You know reliability and resiliency, so is there one way that's better?
I think both have definitely come at it in a very different angle. I think you're absolutely right. There's been less focus on sort of a more comprehensive look in California. Although I think we're still waiting. The CPUC staff report on grid modernization is supposed to come out any day now. It may have come out yesterday. I haven't even looked.
But they held this workshop on grid modernization, and I think part of it is exploring options for integrating grid modernization issues with the DRP proceeding and the general rate cases. So I think they're trying to move a little more toward integrating some of these things relative to rates and tariffs and distribution grid infrastructure.
But it is a different approach. At this point I think it's too early to tell which one is a more effective approach to take.
Shayle Kann: Right. So let's talk about other states that are less obvious than New York and California. I think there was a perception, perhaps a wrong one, that what might end up happening was REV would be out in front, and a few years after it began, we'd start to see the success of the initiative, and that it was possible. And then you'd be able to find some progressive regulators in other states to introduce a REV equivalent. And that hasn't really happened. At least not in that format.
And yet there's a lot of the component parts of REV going on in various states. So where are you guys seeing action that you deem exciting and transformative, and what else would you like to see?
Lisa Frantzis: You're right. When I categorize where people are relative to the 21st century electricity system, I put New York at the far right. Hawaii at one point was thinking about complete business model reform. But the only other state that I have some potential maybe to put in that same bucket moving forward, is a tiny state so maybe people won't give it as much credence, but Rhode Island.
It's actually in a place where they've got a strong commission. The governor's office is committed to it. And they've told me that they're wanting to take what they've learned in REV, and begin implementing it and executing it quickly.
I have some promise for Rhode Island. That's sort of a new state that might be able to implement some of these things. Ohio is also another state that hasn't gotten a lot of PR. But it's probably a state to watch in 2017. They have something called Power Forward. They've got a three-pronged approach to grid modernization projects. Again looking at rate design and business model reform.
We've talked about California. Massachusetts clearly has their grid modernization plans. Eversource had a rate case that was filed in January where they requested a five year, $400 million grid modernization plan. And then they had a a performance based regulation mechanism that they're working on as well. Minnesota has the E-21 process, and then the commission as well has two proceedings out. One on grid modernization reform and one on alternate rate making.
I think there are potential for alternate rate design pilots. They're planning to do two or three pilots in Minnesota. It's moving incrementally. Nothing like New York and nothing like the pace of New York.
New Hampshire has the working group on the grid mod. Maryland has the PSC Prioritize Six grid modernization topics for an 18-month working group. For D.C., comments are due on their grid modernization report by April of this year. And Illinois. They have something called Next Grid, which is an ICC, or Illinois Corporation Commission resolution for a utility of the future study. And this is going to be sort of very much a collaborative stakeholder process over 18 months where they're going to be bringing in a lot of folks to talk about a collaborative effort talking about a lot of these different issues. And they're hoping to have something done by the end of 2018.
There are other states obviously too that have been looking at things. Connecticut, New Hampshire, Vermont, Missouri. Maybe there's an emerging opportunity there. But the states just listed off are the states I see as doing incremental grid modernization activities. And then New York I put in this unique bucket of complete comprehensive business model reform. And maybe Hawaii and Rhode Island in early stages of that.
Stephen Lacey: If you're a distributed energy company. If you're a solar installer, or analytics provider, a demand response provider, do you want to see comprehensive reform? Or does it disrupt your sales process?
It seems to me there's a case to be made that these companies also want incremental change because if you have all these orders in place at once, you're creating all these changes that makes it difficult to communicate with customers. It seems like that would really be disruptive ultimately in the short term to the sales process. Do you see any of that in New York for example?
Lisa Frantzis: Listen. I'll bring up the recent VDER. The rate issues around the phase one VDER order or the rate tariff. One of our issues was that there was no value for energy generated or consumed behind the meter. And I think this is particularly a case for fuel cells, because other programs were available to them before they were phased out. And the value of DER proceeding was supposed to make up for that. And it didn't.
So here's a situation, I think, where there was a potential market for fuel cells in New York, and I think this order fell short of dealing with it. And now this industry and this technology has a gap. And I think you're right. It does happen. There were huge concerns by the energy efficiency community in New York as well.
Because there were all these targets or mandates for energy efficiency targets. And then we're trying to move away from those and replace that with REV. I think that is a huge concern. It has to be dealt with correctly. I think people have voiced their concerns to the commission. And that is a risk.
If the transition is not done well, people that are used to a certain market, and if all of a sudden that market is taken away from them without properly putting something else in place to supplement that, you can have a huge impact on the market disruption.
Stephen Lacey: Right. And you talked about efficiency. That's actually an example of creating this entirely new world that efficiency hasn't had to operate in. And when you say applying REV to efficiency, what you're saying is making efficiency a real time resource and taking the demand response that we know today and applying it to a much broader customer class. And making it something that utilities have to rely on as a grid resource.
And metered energy efficiency is something completely new to the industry. And I know a lot of the old guard in the efficiency industry have been concerned about this. A lot of the folks in the progressive folks in the efficiency community have been pushing this for some time. And the utilities are caught in the middle saying, "Yes. this is a great idea. But can we really rely on it on a broad scale as a resource?"
So that's an example of disruption because you're applying an entirely new model to an efficiency industry that is either loathe to change or a little bit nervous about changing.
Lisa Frantzis: I totally agree with you. It was a huge issue for us, because we have a lot of energy efficiency members as well. And we heard loud and clear from the commission. They want to move toward market based solutions, and not focus on mandates. So we had to work with that. We certainly filed comments.
One of the things the Advanced Energy Economy does, we don't focus just on convening, we file comments on behalf of our members. If you want to see the comments, we actually filed the comments. They're all on our website, but we actually addressed this issue because it was a big issue for us and our members.
Stephen Lacey: There's one final piece that we need to understand. And you'd mentioned the data access issue. But to me it seems like one of the most crucial pieces of the REV effort, and really any sort of reform effort in the states, because the goals of REV necessarily depend on getting the right information out to the marketplace to animate this distributed energy market.
To get utilities and distributed energy providers working on the same platform for the benefit of the grid and the benefit of customers. So you need to have appropriate data access, that has been traditionally controlled by the utilities. Of course the utilities are really hesitant about releasing much of their customer data and grid performance data.
And that has been a huge sticking point in REV and a problem in other states like California and Hawaii. So how are you grappling with data sharing? What is the main issue in New York? And is it similar in some of the other states you're operating in?
Lisa Frantzis: So this issue has been a critical issue that we've come across in almost any of the states that we have been operating. Our members, in order to provide more innovative products and services, need more information about the system data and the customer data to provide better products and services.
So we have been talking to utilities with our members. When we were negotiating the solar progress partnership between the solar companies and the joint utilities in New York, this was probably one of the most contentious issues. The solar companies kept wanting more cost level data on the feeder and the utilities.
You know, utilities claim that a lot of that data just doesn't exist. And a lot of it's in very different software systems and to try to aggregate it would be challenging. So I think the issue becomes, is that data available? If it is not available, what is it going to take to make it available? And how critical is the data for the third party entities to get the innovation on the products and services that they need?
I think a lot of it gets down to also helping them understand, are the benefits truly there that some of these innovative technologies are claiming are there? To understand the benefits that it does provide to the grid, you need to understand what are the basic costs? What are the performance parameters? And then from there you can estimate the benefits. But without that it's hard to do.
So we have been filing comments in New York on behalf of our members to try to get more access to that data. We have actually taken our comments and pulled those into a white paper that our members can take to other states so when they're actually in other proceedings they can bring the same joint arguments together.
So what we tend to do is we talk every week with our members. And get a variety of these companies together, like GE, and Johnson Controls, and Schneider Electric and others, and EnerNOC, all talking about some of this and what they need. And Oracle. Just have them decide what are the key issues. And pull that together and hopefully leverage that in other states.
But I do think this is an issue. I think sometimes too the utilities may see that having that customer data can be something in the future that maybe they can earn revenue on. The question also is do they provide that information for free? Do they charge for it?
Because I think the utilities are struggling to find ways of getting value added services. An additional revenue to make up for the gap of what some of this new business model is doing. And to me that potentially is an area that needs to be further explored because there is a real question out there.
Do these non wire alternative solutions provide additional revenue in multiple locations other than just BQDM that can maybe fill some of the gap that's out there? And I think that's an unknown question. The answer to that question is unknown.
Stephen Lacey: We're three years on. When do you think an appropriate time to do another progress report would be? To take a step back and say, "Ok, what have we accomplished?"
Because, like I said in my introduction, given the pace of technological change, three years is a very long time. Given the pace of regulatory change and what New York in particularly is trying to do, three years is a short period of time. So is it going to be another three years before we can take a step back and say, "Oh wow. They've really implemented some pretty wide ranging reforms and they have or have not worked?"
Lisa Frantzis: Well you know I think we're at the stage right now in REV, where we're beyond the framing, beyond the vision. I think everybody was getting a little frustrated at the beginning because we're not getting into the details. I think we're at the stage now where we're getting into the details about the rate design structures, the earning mechanisms, the DSIPs, which is about the data, and how do you get that information? And what level of data do you provide?
I'm hoping it's not going to be another three years, because I think you're right. I think we're already seeing some of our member's patience getting thin because there's other states that they need to work in. Resources are tight. How much time and energy can you put into New York. But I think the commitment is there because we've already spent so much time and energy on it.
I think we're at the stage where now hopefully we can move quicker, because this is where the key pieces will really begin to make changes. And we can start to implement some of this stuff in the pilots.
I do have some concerns and fears that this is also the hardest part. Trying to get alignment on rate design issues and beginning to look at some of these implementation issues. That's where it becomes harder. Not easier. So I do worry that we have a challenge ahead of us. I'm hopeful that they'll continue to keep the pace moving forward.
I think Richard Kauffman and others in the Cuomo administration are very aware that we need to keep this ball moving quickly. Our members are articulating that and I'm just hopeful that we will move faster than three years to see some early success as a result of the REV proceeding.
Stephen Lacey: Lisa this was really helpful. Boy there are a lot of moving pieces here. And we will get continued updates here as some of these orders progress and we get into new phases.
Lisa Frantzis is Senior Vice President at Advanced Energy Economy. We appreciate it. Thanks for joining us.
Lisa Frantzis: Thank you very much.
Stephen Lacey: With Shayle Kann, I'm Stephen Lacey, and this is The Interchange. Conversations about the evolution of energy. From Greentech Media. We'll catch you next time.