Utility 2.0: “REVolutionizing” the Use of Distributed Energy Resources

Oct. 29, 2014
EDF’s new white paper offers New York a ‘Utility 2.0’ path that could create a sea change for distributed energy resources. EDF’s John Finnigan explains.

John Finnigan, EDF

New York opened its “Reforming the Energy Vision” (REV) proceeding earlier this year to re-examine the utility business model. As part of this proceeding, state regulators will also look into removing market barriers preventing greater deployment of distributed energy resources (DER), which are smaller-scale clean energy resources, such as energy efficiency, energy storage, and local, on-site generation.

In recent years, DERs have made great strides due to market reforms, advanced technologies, and declining costs. Despite these advances, DERs serve less than one percent of national electricity demand as the existing utility business model and regulatory policies still favor traditional electricity distribution from a centralized grid.

Though the REV proceeding is in its early stages, the Department of Public Service Staff (Staff) has provided guidance recommendations for eliminating these market barriers. Using the Staff’s filings, EDF has drafted a white paper that compiles a Top 20 list of the changes required before we will see greater use of DERs. If adopted, these recommendations would result in a sea change for incorporating DERs into New York’s electric system and would provide a template for other states to follow.

Among the Top 20 recommendations are a new regulatory paradigm that rewards utilities for the benefits they deliver rather than infrastructure investment, a new platform allowing DERs to compete on equal footing with traditional energy resources, and a market structure open to third-party energy service providers. Please read our white paper for more recommendations.

The REV proceeding has a long way to go before the policy recommendations are finalized, new laws are passed, and utility implementation plans are adopted. Yet it is already clear that REV will “REVolutionize” the use of DERs in the energy system.

John Finnigan is the senior regulatory attorney for EDF’s US Climate and Energy Program, representing EDF before state public utility commissions on smart grid deployments and energy efficiency matters. This blog originated at EDF’s Energy  Exchange.

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