New York PSC Approves Utility Reforms To Promote Clean Energy

Posted by Betsy Lillian on May 20, 2016 No Comments
Categories : Featured, Policy Watch

The New York State Public Service Commission (PSC) has approved structural reforms to the regulations governing electric utilities – in turn, providing more choices and cost-saving opportunities for New Yorkers by expanding clean energy, says the PSC.

The PSC has established new financial mechanisms that will help utilities meet the clean energy goals set forth in Reforming the Energy Vision, Gov. Andrew Cuomo’s strategy to lead the fight against climate change and grow New York’s economy.

Utilities will now be required to develop a more efficient and cleaner network through retail markets for distributed energy resources such as wind and solar, geothermal, fuel cells, combined heat and power, battery storage, and other advanced energy services.

Specifically, each of the major electric utilities will be required to file an overall system-efficiency proposal by Dec. 1, 2016, to reduce high-cost energy generation during times of peak energy demand. Utilities must identify efficient ways to deliver power by promoting the deployment of smaller, cleaner power systems and enabling more control for customers in managing their energy bills.

According to the PSC, its new order moves New York away from decades of rate-setting decisions that encouraged investment in large, centralized power systems. The electric grid of the past century was built to meet the peak electric demand that occurs only a few days each year – resulting in a financially and energy-inefficient system, the commission explains.

One example already underway is the Brooklyn-Queens Demand Management Program, which allowed Consolidated Edison to defer the construction of a $1 billion electrical substation in Brooklyn in favor of less costly distributed energy resources such as solar, batteries and energy efficiency.

Regulatory changes also include the opportunity for utilities to achieve financial rewards for activities that increase consumer economic and environmental benefits. These include as follows:

• Reducing greenhouse-gas emissions through cost-effective means;
• Energy efficiency achievements above and beyond current targets;
• Customer engagement in programs that will help customers and utilities manage electricity usage;
• Faster pace of interconnections between the electric grid and renewable energy projects; and
• Reductions in carbon emissions such as investments that support conversion to electric vehicles and geothermal heat pumps, along with reductions in costs related to New York’s clean energy standard.

“New York is taking a new direction today by creating the most advanced and forward thinking business model for electric utility rates anywhere in the country,” says PSC Chair Audrey Zibelman. “By aligning utility profits with market-enabling activities, residential and business customers can lower their energy bills through advances in digital technology and power-saving systems built for private homes and apartments, as well as entire neighborhoods.”

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