NEWS: New York Issues Order in Reforming the Energy Vision Proceeding, Turning Utilities into Distributed System Platform Managers

Last week, the New York State Public Service Commission (PSC) issued its first order in the Commission’s groundbreaking Reforming the Energy Vision (REV) proceeding.  We have been covering REV since it was announced last year and, as AEE’s Lisa Frantzis characterized it in a statement, the PSC’s order is “a huge step toward a better energy future for New York State.”

With REV, the PSC is seeking to fundamentally transform the way the state’s electric distribution utilities are regulated and how they do business – changing the way electricity is generated, bought, and sold in New York. This may be the biggest single move toward a 21^st century electricity system so far in the 21^st century. It was recognized this week by Harvard’s Ash Center for Democratic Governance and Innovation as one of its 2015 Bright Ideas.

“This ruling is a step toward providing the certainty needed for future development of grid-scale renewables – like wind power and hydropower – as the state's current program expires this year,” said Anne Reynolds, Executive Director of the Alliance for Clean Energy New York (ACE NY). “Industry has been awaiting a signal that New York will have a long-term renewables policy to replace it.” AEE has been working with our regional partners ACE NY and the New England Clean Energy Council on the proceeding, filing comments jointly.

The order is an important step toward reforming utility regulation to expand the market for advanced energy technologies and services in New York. Last year, Frantzis wrote that the “devil is in the details,” and this week some of the REV details were revealed. You can check out all of the details of the order on AEE’s PowerSuite, but here are some of the important pieces: 

• Utility engagement in facilitating distributed energy resources. The Order places the responsibility for maintaining a Distributed System Platform with the utilities and charts a course for a new regulatory paradigm where the utilities’ business model will revolve around integrating distributed energy resources rather than competing with them. Utilities are expected to file plans for implementation of DSPs by December 15, 2015.
• Utilities will not own distributed energy resources unless necessary. The PSC is trying to animate a private market for provision of consumer-owned and operated advanced energy resources, such as residential solar, demand response, and energy storage. It is expected that most of the distributed energy resources will be provided by third party businesses, and utilities will offer them only if a private market does not materialize.
• Valuing energy efficiency. In the near-term, the order extends utility energy efficiency programs (originally slated to expire this year) through 2016. In the longer term, we can expect a more market-based approach to energy efficiency, with a focus on consumer engagement.

“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.

We can expect more information to become available June 1, 2015, when the PSC issues its Track 2 straw proposal, which will lay out the rate structures and utility business model needed to implement the new system adopted in the Track1 order. Stay up-to-date on all REV developments by subscribing to the proceeding in AEE’s DocketDash, a user-friendly platform for following PUC dockets in all 50 states.