Will New York Turn the Electric Power Industry Upside Down?

July 14, 2014
Imagine if the local food movement made such dramatic inroads that food chains and superstores became secondary sources for grocery shoppers. Equivalent change is afoot in New York’s power industry as the ‘local energy’ market emerges.

The electric power industry has been undergoing a metamorphosis for decades. And now at last it appears we will get a glimpse of the new, highly efficient creature. Expect the first sighting to be in New York.

New York leaders and stakeholders have been hard at work in recent months on a plan called Reforming the Energy Vision, or REV. And on July 10 about 300 industry leaders gathered in Albany to share their collaborative efforts.

It was clear after the six-hour technical session that:

1) REV aims to create the decentralized and prosumer energy market that has been mostly the stuff of utopian dreamers so far.

2)  New York officials have a concrete idea how to get there, and are willing to do the work to make it happen.

Energy insiders understand that this means radical disruption, new market opportunity, and a completely different role for the electricity consumer. By way of comparison, think typewriter to computer or land line to smart phone.

Or perhaps more accurately, imagine if the local food movement made such dramatic inroads that food chains and superstores became secondary sources for grocery shoppers. Equivalent change is afoot in the power industry  as the ‘local energy’ market emerges, one where the household or business both consume and  produce power – whether from solar panels on the rooftop, fuel cells in the basement, a neighborhood microgrid or solar gardens, or some other nearby energy source – and sell it to the central grid or local microgrid.

The end game? The individual and the community gains more control over their energy supply, and a new energy economics emerges.

Sounds good, let’s do it, right? Well, it’s not that easy. The electric grid and its corresponding markets are complex. Bringing about this metamorphosis requires step-by-step problem solving, which New York is attempting to do by gathering together all of the various stakeholders – utilities, competitive interests, vendors, environmentalists, consumer advocates and others – in a collaborative process.

New York’s quest is drawing keen interest. Competitive players are eager to get going  Meeting attendance is breaking all records for energy

Audrey Zibelman, NY PSC chair

planning events, according to Audrey Zibelman, Public Service Commission chair.

“Folks across the country are looking at these issues and trying to see how to navigate,” she said at the start of the July 1o REV session. “We really do have a lot of eyes on New York. We want to get it right.”

Indeed, other bellwether states are investigating similar changes to animate the distributed energy market – Massachusetts, Maryland, California, Connecticut – but none yet with the specificity or scope of New York.

New York has proposed creation of a new market structure where a  Distributed System Platform Provider, likely the utilities, acts as a kind of central market clearing house to coordinates decentralized energy and work it into the larger electric market.

You can listen to the July 10 session here, or read the working groups’ reports on the New York PSC website.  The PSC expects to issue decisions on REV in two parts; the first due by December and the second in first quarter 2015.

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About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is the editor and founder of EnergyChangemakers.com. She is co-founder and former editor of Microgrid Knowledge.

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