New York Public Service Commission Approves the Reforming the Energy Vision (REV) Track One Order: What We Heard in Albany

February, 27, 2015
David Gahl
Director of Strategic Engagement
ClimateEnergy EfficiencyRenewable Energy

Energy circles are abuzz with the news that the New York State Public Service Commission (PSC) approved the Reforming the Energy Vision (REV) Track 1 Order at its February meeting yesterday.

Significant for its national implications, the REV case is a sweeping proposal that aims to completely restructure the electric utility market in New York State. If properly executed, REV could help drive down climate pollution emissions from “central station” power plants and create new markets for clean energy.

REV is New York’s tool for building a 21st Century energy infrastructure. To approach this challenge, the Commission divided the proceeding into two separate tracks. Track One aimed to develop the structure of the new utility market, including distribution system operation and issues relating to the ownership of distributed energy resources.

Track Two, which the Commission plans to propose this spring, will tackle the rate-making issues of the new market. After several months of deliberation and comments from hundreds of parties, the PSC issued its Order for Track One issues.

Although the Pace Energy and Climate Center’s (Pace) legal staff will be digging into the details of the extensive Track One Order, in this post we cover the highlights of what we heard in Albany. Future posts will dive into specific subjects.

A key element of the REV plan involves establishing an entity to serve as the Distributed System Platform Provider (DSP). This entity would be responsible for managing and running the new distributed energy resource (DER) markets contemplated by REV.

The Order assigns this new responsibility to the incumbent utilities. Many parties had expressed concern about the utilities potentially abusing the role by exercising market power. We will be looking to see how closely the PSC will be keeping an eye on the utilities.

The Order also advances 15 criteria to guide the development of the new DER markets, including ensuring that market design prevents additional pollution in New York’s environmental justice communities.

Another key question is the extent to which utilities would be allowed to own or operate solar, wind, or battery storage operations themselves. The Order appears to significantly limit utility ownership of these resources. This makes sense given the concerns about utilities crowding out independent projects.

In the best news of the day, the PSC provided more clarity on the path forward for New York’s Renewable Portfolio Standard (RPS), an effort to get clean energy from large-scale solar and wind installations. First, the NY PSC is opening up a new Track in the REV case to discuss the future of large-scale renewables. More importantly they commit to providing public funds to a new round of projects in 2016. New York’s current RPS would have expired at the end of this year. On promoting energy efficiency, the Order appears to set strong utility targets for energy efficiency (EE) acquisition.

DPS staff also mentioned the two upcoming REV seminars, including the one hosted by Pace in two weeks. This one-day seminar in New York City will set the stage for further discussions on incentive design and better ways to value clean energy resources.

Based on what we heard today, and based on the hard work of Pace faculty, staff, and interns, the PSC appears to have modified its proposals in ways that we like.