EDF recommends that NYC utility regulators consider the benefits of energy storage

September 18, 2014

The New York State Public Service Commission recently announced in its "Reforming the Energy Vision" report that it will be re-examining how it evaluates and incentivizes utility companies. The Commission hopes that updating current regulatory paradigms will create fresh motivation for utilities to modernize and promote a more resilient system for local customers. The Environmental Defense Fund has responded to the Commission's report with strong recommendations that the city encourage integrating energy storage solutions into the utilities planning and operation. This strategy would help provide price signals to property owners by fully valuing all costs and benefits associated with distributed energy resources.

Timing Matters
Energy storage solutions provide an opportunity for utilities to greatly reduce the electrical load of buildings during periods of peak demand. By shifting a large portion of the total energy load from peak hours to nighttime, companies can reduce energy costs of an entire building by 40 percent. Reducing the average electrical load of the building will also help to minimize potential grid reliability issues that arise when electrical systems are pushed to their limits.

The reason distributed energy storage solutions are so effective is because the price of electricity is effectively cut in half at night. Demand tariffs inflate power costs during the day when buildings are utilizing the most energy, and competition for power is especially fierce in urban centers. As a result, the Environmental Defense Force strongly encouraged the New York State Public Service Commission to consider the positive benefits of energy storage. Breaking Energy notes that timing matters, that the savings provided by energy storage technology would have a much larger benefit during peak times when utility infrastructure is pushed to the limit. The EDF also recommends that the Commission incentivize businesses and homeowners to consider how they can save money by working around peak load times.