Restructuring New York State’s utilities

Source: Lexology

New York State’s electric industry may undergo a drastic transformation.  Recently, the New York State Public Service Commission (“Commission”) issued its Reforming the Energy Vision, NYS Department of Public Service Staff Report and Proposal (“Vision Proposal”) to remodel 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 consumer-oriented industry.”  To accomplish these objectives, “utilities will actively manage and coordinate a wide range of distributed resources, and markets and tariffs will empower customers to reduce and optimize their energy usage and electric bills, and will stimulate innovation and new products that will further enhance customer opportunities.”

Several primary components comprise the Vision Proposal.  First, it suggests creating a “Distributed System Platform Provider” (“DSPP”).  According to the Commission, the DSPP will “modernize its distribution system to create a flexible platform for new energy products and services, to improve overall system efficiency and to better serve customer needs.”  Among other things, the DSPP will be tasked with creating markets, tariffs, and operational systems to aid certain providers in monetizing their products.  Second, there will be a new focus on customer participation in addressing challenges and opportunities of the modern electric grid.  Specifically, the Commission suggests that “a strategy for engaging customers should have three main components: products, information, and enabling technology.”  Engaging customers, however, “will need to occur in increments, and the phasing in of new utility functions should coincide with the development of new customer products, information and enabling technology.”  Third, the examination of “how enhanced integration of [Distributed Energy Resources] by the DSPP will impact, and be impacted by already existing wholesale-level competitive markets, programs and process.”  Lastly, the Vision Proposal suggests that the Commission “should consider adopting a more outcome-based approach to ratemaking designed to encourage utility long term planning that optimizes investments and leads to lower customer bills.”

In sum, changes are on the horizon for New York’s electric industry.  What, in fact, those exact changes may be is still unclear because the Reforming the Energy Initiative is still in its preliminary stages. Nevertheless, the Vision Proposal, at the very least, lends some insight on where the future lies.

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