New York PSC seeks comments on staff report on value of DERs

The New York State Public Service Commission (PSC), in a Nov. 7 notice, said that the state Department of Public Service (DPS) staff will convene a technical conference on Nov. 28 at the DPS’ office in Albany, N.Y., regarding the “Staff Report and Recommendations in the Value of Distributed Energy Resources [(DERs)] Proceeding.”

As the PSC said in an Oct. 28 statement, the recommendations are the result of a year-long collaboration with environmental advocates, utilities, solar and DER providers, as well as consumer advocates, and represent the initial steps of an ongoing process that will lead to an increasing granular understanding of, and compensation for, DER value.

According to the report, the PSC’s Reforming the Energy Vision (REV) proceeding aims to “transform New York’s electric industry, with the objective of creating market-based, sustainable products and services that drive an increasingly efficient, clean, reliable, and customer-oriented industry.”

Today, the customer side of the grid represents an enormous and largely untapped resource to optimize value throughout the electricity system, the report said, adding that the REV will establish markets so that customers and third parties can be active participants to achieve dynamic energy management on a system-wide scale, resulting in a more efficient and secure electric system, including better use of bulk generation and transmission resources.

As a result of that market animation, the role of DERs, including end-use energy efficiency, demand response, distributed storage, and distributed generation, will become integral tools in the planning, management and operation of the electric system.

The report recommends the first phase in the transition to a new, more accurate methodology for pricing renewable power and other DER, the PSC said in its statement, adding that New York can spur the development of larger solar projects, including community distributed generation (CDG), also known as shared renewables, for the benefit of communities across the state.

As noted in the report, the “Phase One [(value of DER, or)] VDER mechanism” will compensate customers using a tariff based on calculations (and proxy calculations) of specific value sources and as applied to net exported generation from a DER host’s account on an hourly basis. When considered together, those values comprise the “value stack” with each stated value serving as a component of the stack, the report said. While some of the VDER tariff’s value stack components will be fixed for a given project, some components will vary with fluctuations in energy markets, the report said.

The VDER tariff will result in monetary bill credits that are applied to a customer’s or project subscriber’s account in each billing cycle, with any excess credit carried over month-to-month, the report said.

The PSC said in its statement that other recommendations include:
* A process to “unbundle” and publicly identify all of the factors that make up – or should make up – the full value of rooftop solar and other forms of DER. The report does not specify a deadline for that exploration, recognizing that that accuracy of pricing will evolve over time and that for some values, utilities must first develop the analytical tools to calculate the value of location, particular devices, time of use, and other factors that must be considered in compensating homeowners, developers, businesses and others for the full value of DER

* Interim measures for CDG projects that are in the advanced stage of development. For a limited 90-day period, a specific amount of CDG projects can qualify for compensation under the current net energy metering framework in order to aid the transition to the new methodology and ensure that CDG development can deliver on increasing DER access to all New Yorkers. After those 90 business days, future CDG projects would move into a new and more detailed methodology for valuing and compensating a system’s clean power generation

* Distributed generation projects, including solar for large commercial customers, fuel cells, farm waste generators, and micro combined heat-and-power, would also transition to the new methodology following action by the PSC

* Utilities would develop fee-based, “virtual generation portfolios,” which is a pool of new DER projects that will be developed in conjunction with private energy companies

* Behind-the-meter generation should be recognized for its environmental value and for contributing to the state’s overall Clean Energy Standard goal

The PSC, in an Oct. 28 notice, said that it seeks comments on the report, as well as on the “Appendix C to the report,” which was filed on Oct. 28, with initial comments due by Dec. 5, and reply comments due by Dec. 19.

Action by the PSC on the Phase One recommendations is expected in January, the PSC said in its Oct. 28 statement. 

About Corina Rivera-Linares 3286 Articles
Corina Rivera-Linares was TransmissionHub’s chief editor until August 2021, as well as part of the team that established TransmissionHub in 2011. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial from 2005 to 2011. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines.