Next steps for New York's Reforming the Energy Vision initiative

May 5, 2015

In a talk at the Bloomberg New Energy Finance event, industry thought leaders like ex-CEO of Duke Energy Jim Rogers discussed the nuances of solutions to New York City's energy grid problems. One voice that stood out among speakers on the panel belonged to New York Public Services Commission chair Audrey Zibelman. According to Greentech Media, she emphasized that the key to pushing the grid in the right direction lies with deregulation, energy efficiency, demand side management, predictive pricing and in creating new ways to incentivize utilities.

This utility reform is a new initiative of the New York State Public Utilities Commissions (NYSPC). Dubbed the Reforming the Energy Vision (REV) initiative, this ambitious plan by the state addresses its power grid infrastructure in a state of transition from traditional power resources to renewables including on-site distributed generation and energy storage.

Reliable, resilient, affordable energy is crucial to New York's economy and the welfare of its citizens. So deciding how best to manage these new renewable resources has led New York to craft significant regulatory changes. Zibelman explained that the plan's measure will help to empower utilities as enablers of change through technology and optimization. A closer look at how the REV is expected to enact these changes provides a sneak peek into how utilities all over the world will modernize their energy markets.

Utility companies are facing a transformed marketplace
One advancement called for by the REV Track I report, the first approved proposal by the NYPSC, calls for long-term plans for restructuring the state's power market, including the development of new Distributed Energy Resource (DER) markets. The first change will be establishing an entity to serve as the Distributed System Platform Provider (DSP). The DSP would be in charge of managing and operating new DER markets.

This designation would coincide with infrastructural changes that would create new opportunities to incorporate more deployment of renewables and energy storage technology into the grid. According to the REV proposal, DSPs would also be incentivized to implement changes to current business models, such as facilitating deferment of transmission and distribution upgrades through utility and customer-owned DER. This shift would lead to the creation of new demand response, energy storage and energy efficiency tariffs, and greater opportunities to educate consumers through web-based tools. In the NYPSC's next report, Track Two, specifics about DER tariffs will be described in greater detail.

Calls for demonstration proposals around the corner
Looking further into the year, Energy Biz Magazine reported that the New York Public Services Commission will be putting out a call for REV demonstration proposals, inviting the private sector to propose services and business models that would showcase ways to integrate DER onto the grid and results that the NYPSC hopes will bring the New York City power grid into the next century.

The article emphasized that integration of energy efficiency, renewable energy, distributed generation, demand management and energy storage will create economically and environmentally sustainable energy markets and reduce the need for new infrastructure such as substations and power plants. In the Track 1 report, according to the Citizens for local power energy storage will be key to achieving REV goals.

The changing energy market place
REV is bound to spur innovation, improve customer choice, eliminate barriers for deployment of DER and provide new opportunities for energy savings while protecting the environment. The success of such an initiative may very well inspire like-minded initiatives in other deregulated populations in the U.S. as well as in other countries. The world is changing, and government leaders are addressing climate change challenges and a movement towards consumer energy independence. How all the utilities will adapt while turning a profit and still providing reliable, inexpensive power is still yet to be seen but New York's plan is one of many to address all these issues and fundamentally change the electric marketplace.

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