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New York has an ambitious plan to reform its utility sector. Now come the difficult details.
With a mandate to transform into open platforms for distributed energy, how will the state’s major utilities reform their business plans? The pieces are starting to come together, forming a picture of how New York's utilities will seek to transform themselves.
Commenting on ConEd specifically, Walter Rojowsky said: “Yet in its DSIP, the utility remained light on information in this stage of the process about how to handle an animated market in long run.”
Commenting on Avangrid, Walter added: “Avangrid’s project is unique -- it will be a real-world lab to pilot and test operations for market enablement and animation, as well as grid operations and integrated system planning.”
Learn how to navigate the uncertain future of the electricity sector
Walter added: “This order identifies a combination of revenue model reforms to encourage a high level of penetration of distributed energy resources (DERs), while maintaining a sustainable business model for the utilities. It envisions the utilities receiving platform services revenues for the operation or facilitation of markets for DERs, as well as earnings adjustment mechanisms for achieving outcome-based results aligned with policy objectives.”
Further, Walter added: “The REV process provides a way for utilities to articulate what investments they need to make. And the door is open to different kinds of recovery. The DSIPs strongly articulated kinds of investment they need to make to better understand how their systems are currently operating at a granular level, and how they will operate with higher DER penetration.”
Walter concluded: “For true market enablement and animation, customer incentives need to change too. Until we have a future where customer incentives and rates are different than today, we can’t animate the market. That will be a heavy lift. And then there’s the challenge of communicating all these changes to customers in ways that empower them, rather than overwhelm them.”