New York DPS Staff Straw Proposal re: Case No. 14-M-0101: Developing the REV Market in New York

Posted: August 22, 2014 - 11:00 / NY PSC / ESA Filings

The Commission's April 2014 Order Instituting Proceeding proposes a platform to transform New York’s electric industry, for both regulated and non-regulated participants, with the objective of creating market-based, sustainable products and services that drive an increasingly efficient, clean, reliable, and customer-oriented industry. Under the customer-oriented regulatory reform envisioned here, a wide range of distributed energy resources will be coordinated to manage load, optimize system operations, and enable clean distributed power generation. Markets and tariffs will empower customers to optimize their energy usage and reduce electric bills, while stimulating innovation and new products that will further enhance customer opportunities.

The Commission’s ratemaking framework will also need to be revised to provide improved incentives and remove disincentives that reside in the current paradigm, while ensuring reliable service at reasonable rates and maintaining necessary consumer protections. One effect of these measures should be to monetize, in manageable transactions, a variety of system and social values that are currently accounted for separately or not at all. In the order initiating this proceeding, the Commission laid out six objectives for its Reforming the Energy Vision (REV) initiative:

  • Enhanced customer knowledge and tools that will support effective management of their total energy bill;
  • Market animation and leverage of ratepayer contributions;
  • System wide efficiency;
  • Fuel and resource diversity;
  • System reliability and resiliency; and
  • Reduction of carbon emissions.

In this proposal, the vision articulated in the April 24 Report is affirmed in its essential elements, with numerous clarifications and additions, and the initial steps of a transition toward that vision are identified. Staff recommends that the Commission adopt the measures detailed in this proposal. In a subsequent order related to Track Two of this proceeding, the Commission should consider ratemaking reforms that will push utilities to enable the market transformations described in this proposal.

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