New York Public Service Commission “REVs” Up Utility Reform in Consolidated Edison Rate Case

New York Public Service Commission “REVs” Up Utility Reform in Consolidated Edison Rate Case

  • New York Public Service Commission adopted a three-year rate plan for Consolidated Edison, including several key Reforming the Energy Vision initiatives.
  • The Pace Energy and Climate Center and Earthjustice partnered on our fifth New York rate case and scored a number of REV wins, including on standby rate reforms, energy efficiency, and REV-aligned rate design.
  • This is the first “post-REV” rate case and is a significant milestone in New York’s path to grid modernization.

The New York Public Service Commission adopted a three-year rate plan for Consolidated Edison Company of New York on Tuesday, marking the first rate plan the Commission has approved following its landmark Order Adopting a Ratemaking and Utility Revenue Model Policy Framework (the “Track Two Order”), which laid the groundwork for many of the Reforming the Energy Vision’s key principles.

Earthjustice and the Pace Energy and Climate Center (“Pace”) partnered in the case and pushed for many of the REV-aligned reforms approved by the Commission. Several Pace staff and law student interns worked on the case along with staff attorneys from Earthjustice. Pace and Earthjustice played a key role in securing a number of wins for advancing fair rates, increasing deployment of energy efficiency, advancing climate responsibility, and growing markets for distributed energy resources (“DER”) such as energy efficiency, energy management, distributed generation, electric vehicles, and other technologies and services.

“Our partnership with Earthjustice enabled us to advance strategic objectives of just and reasonable rates for ConEd customers as well as substantial progress toward realizing the vision of the REV process for greater deployment of DER,” said Karl R. Rábago, Pace executive director and expert witness in the case.

The months-long settlement negotiations resulted in a Joint Proposal, filed on September 19, 2016, with more than 20 signatories, including Pace, the City of New York, Natural Resources Defense Council, Environmental Defense Fund, distributed generation and real estate developers, and others.

The rate case is a significant milestone in the ongoing REV process. As Commission Chair Audrey Zibelman noted prior to voting in support of the Joint Proposal, this case represents “a significant step toward modernizing the electric system and changing the utility business model.”

Five of Pace’s subject matter experts—Executive Director Karl Rábago, Deputy Director Tom Bourgeois, Senior Energy Policy Associate Dan Leonhardt, Energy and Climate Law Advisor Jordan Gerow, and Professor Michael Gerrard, Director of Columbia University’s Sabin Center for Climate Change Law—testified on a number of REV concepts, including much-needed standby rate reforms, developing metrics to measure AMI program performance, best practices for microgrid development, and innovative, REV-aligned cost allocation to capture the costs and benefits of Con Edison’s new role as distribution system platform provider.

Among the key REV “wins” approved by the Commission are:

  • Standby Reform: An overhaul of Con Ed’s standby rates, as required under the Track Two Order, including a revamped Reliability Credit with more stringent NOx emissions standards, and a Standby Rate Pilot that includes provisions to incentivize more efficient combined heat and power (CHP) units;
  • Energy Efficiency, System Peak Efficiency, and Electric Vehicles Programs: Con Edison’s proposed energy efficiency budgets and targets go beyond what the Company is currently required to achieve, and are projected to yield more than 300 gigawatt-hours of savings per year, equivalent to the energy needed to serve over 40,000 homes in New York State. The system efficiency program would add an additional 22 GWh of energy savings and provide 49 megawatts of system peak reduction. The energy and system peak efficiency programs also include proposed Earnings Adjustment Mechanisms—novel mechanisms established under the Track Two Order for utilities to generate new revenue streams and accomplish energy policy goals. These savings are especially important in light of the recently announced agreement to close the Indian Point nuclear plant.
  • Electric Vehicles: A collaborative process will be established to consider developing new rate structures, incentives or pilot programs for electric vehicles.
  • Climate Change Vulnerability Studies: The agreement, if adopted, would authorize the Company to spend up to $4 million on completing its Climate Change Vulnerability Study by 2019.
  • Advanced Metering Infrastructure (“AMI”) Metrics: Done right, AMI can help to grow DER and ancillary services markets, and empower customers to manage their home and business energy use. The Commission approved Con Ed’s AMI Business Plan earlier this year, and as the Company moves forward, its AMI program will be subject to ongoing measurement and assessment to ensure that the program is on the right track.
  • Rate design reforms: The proposed agreement inches Con Ed toward a more granular cost functionalization and allocation model, which is critical to helping the Company move from the one-way energy delivery and cost recovery of the past and toward its new role as distributed system platform provider.
  • The Commission also separately approved a related Targeted Demand Management program that will incentivize the Company to pursue “non-wires alternatives” projects, like the Brooklyn-Queens Demand Management project, thanks to a split incentive between customers and shareholders. Lessons learned in this program will be vital in addressing any supply gap created by the closure of Indian Point.

This is Earthjustice and Pace’s fifth partnership on a New York rate case, following the successful completion of settlement agreements in Central Hudson and Orange & Rockland Utilities’ 2014 rate cases, and Con Edison and New York State Electric and Gas / Rochester Gas & Electric’s 2015 rate cases.

Three other New York investor-owned utilities could file rate cases in 2017: National Grid, Orange & Rockland Utilities, and Central Hudson Gas and Electric.

Pace and Earthjustice look forward to tracking those filings and continuing to push for fair rates, clean energy and climate responsibility, and REV-aligned market reforms.

Earthjustice Associate Attorney Chinyere Osuala says: “In a time when President Trump’s clean energy goals are ambiguous at best, states are taking charge. New York is proving itself to be a leader in clean energy by modernizing the electric grid. This rate plan advances that vision for New York City and Westchester residents and their families.”

The State of Grid Interconnection in the Northeast

The State of Grid Interconnection in the Northeast

This article is crossposted on the Northeast Solar Energy Market Coalition website.

The Pace Energy and Climate Center is a non-profit energy and environmental research and advocacy organization based at the Elisabeth Haub School of Law in White Plains, New York.

The Northeast Solar Energy Market Coalition (NESEMC) brings together solar energy business associations and other solar stakeholders in the Northeast to harmonize regional solar energy policies and advance the solar energy market.

Connecting distributed generation (DG) like solar photovoltaic (PV) systems to the grid is not the most straightforward thing in the world. The electric grid is a complex system, and electric distribution companies (EDC) must ensure that it is operated safely and reliably at all times. For this reason, EDCs are very cautious when it comes to interconnecting DG systems to the grid. Safe interconnection requires adherence to certain rules and procedures and the screening of projects for potential negative impacts to the overall grid. For project developers, these rules can be confusing and prohibitively expensive both in terms of dollars and time, especially when the rules differ from state to state, or even from EDC to EDC within a state.

To address concerns for both maintaining grid safety and reliability without unduly hindering DG deployment, many states have developed standard interconnection guidelines and procedures. These procedures often delineate technical requirements, fees and cost responsibility, and the application process steps for EDCs and developers.

In the Northeast, every state has some form of standard interconnection requirements. These procedures are graded in a report by Vote Solar and the Interstate Renewable Energy Council (IREC) called Freeing the Grid. In the most recent edition of Freeing the Grid, the Northeast scored well with Massachusetts leading the pack with an “A” for interconnection policy, and the rest of the region scoring above average with a “B.”

States are cognizant of the need to revisit standard interconnection procedures on a regular basis. With rapidly advancing technology and best practices, there is almost always room for improving interconnection standards, and IREC maintains highly regarded model interconnection procedures that are updated periodically. Ideally, procedures would be standard in design and application across the Northeast.

In the Northeast, New York and Massachusetts have completed significant revisions to their interconnection standards within the last two years. Three more states—Connecticut, Maine, and Vermont—are in the process of considering revisions to their standards as well. In addition to making formal improvements to interconnection standards, states are also beginning to form working groups consisting of developers, utilities, and other stakeholders to explore interconnection issues on a regular basis. Both Massachusetts and New York have initiated such groups, and other states like Connecticut are considering the same. We see these standing work groups as a best practice for staying on top of interconnection problems and issues.

The Northeast Solar Energy Market Coalition (NESEMC) maintains an inventory of state interconnection guidelines. The remainder of this post provides a roundup of current affairs regarding interconnection in the Northeast in each of the Coalition’s nine member states.

Connecticut

Connecticut’s Public Utilities Regulatory Authority (PURA) has established interconnection standards for distributed generation less than 20 MW. The last major revisions to the standards occurred in 2010. Separate streamlined guidelines exist for certified inverter based systems less than 10 kW, while systems larger than 10 kW and less than 2 MW may qualify for a fast track process if they pass certain screening criteria.

In September 2016, the state’s two major EDCs jointly petitioned to increase the threshold for the streamlined guidelines to systems less than 20 kW. The move to 20kW was one of a number of proposed changes offered by the state’s solar industry group, SolarConnecticut (a NESEMC member). The utilities agreed that expanding the threshold will help alleviate administrative burdens caused by increasing numbers of residential solar PV projects between 10 and 20 kW. In addition to increasing the threshold to 20 kW, the proposal lightens insurance requirements and loosens capacity screens—two other suggestions made by SolarConnecticut. SolarConnecticut is urging PURA to also establish a method to more fairly distribute the cost of equipment upgrades, modernize the application payment method, and lift the external disconnect switch requirement. A docket is currently still open, and a final decision is expected in March.

Maine

The Maine Public Utilities Commission (PUC) has established standard interconnection procedures for small generators not subject to federal rules (i.e. anything connected to the distribution grid as opposed to the transmission system). The last major revision to the interconnection standards occurred in 2009 and were based on the 2009 IREC model standards.

In April 2016, the PUC opened a docket to consider revisions to their standard interconnection procedures, specifically addressing whether, and to what extent, the rules should be updated to reflect the most recent IREC model standards. Stakeholders provided comment in May 2016. No additional actions have occurred since.

Massachusetts

In Massachusetts, the Department of Public Utilities (DPU) maintains a model interconnection tariff that applies to all distributed generation. The last major revisions to the tariff occurred in May 2015 as the result of a multi-year effort by a DG working group convened by the DPU to explore interconnection issues. In addition to updated standards, the process also ended with the creation of the Massachusetts Technical Standards Review Group (TSRG).

The TSRG held its inaugural meeting in March 2013 and has since been credited with successfully addressing several interconnection issues that were driving costs up for installers and prohibiting many projects from being completed. The group brings together utility and developer engineers in a non-adversarial environment to openly discuss common and utility-specific interconnection technical standards. It provides non-utility stakeholders a formal process to provide input on interconnection practices within the state. The success of the TSRG has driven the creation of similar groups in states like New York.

Again, NESEMC considers the TSRG process a best practice that should be emulated and replicated throughout the region. Ideally, state TSRG groups would meet once or twice a year to address regional issues as well.

New Hampshire

New Hampshire’s interconnection standards are regulated by the Public Utilities Commission as part of the state’s net metering provisions. The standards only apply to net metered systems less than 1 MW—all other systems must abide by separate tariffs filed by each utility. The last major revisions to these provisions occurred in 2011.

New Jersey

New Jersey’s Board of Public Utilities has designed standard interconnection guidelines (note: the official rule is only accessible on www.lexisnexis.com/njoal at N.J.A.C. 14:8-7). The rule applies to all forms of net metered distributed generation, which has no specified maximum capacity but must not exceed the customer’s annual on-site energy consumption. The last major revisions made to the standard rules occurred in 2012.

New York

New York’s Public Service Commission (PSC) has developed Standardized Interconnection Requirements (SIR) that govern procedures for all distributed generation less than 5 MW. The last major revisions to New York’s SIR occurred in March 2016, which increased eligible projects from 2 MW to 5 MW and included a pre-application report process, improved screening procedures, and other changes.

In addition to these changes, the revision process spawned two new groups to address other outstanding technical and non-technical interconnection issues on a continuing basis—the Interconnection Policy Work Group (IPWG) and Interconnection Technical Working Group (ITWG), respectively. One of the first tasks undertaken by the IPWG was to address the large backlog of projects waiting for interconnection approval. The group issued a joint proposal in September 2016, which includes provisions such as requiring demonstration of property owner consent and site control and binding timelines for developer decisions. Stakeholders provided formal comments on the proposal in December 2016.

Pennsylvania

The Pennsylvania Public Utilities Commission (PUC) has established standard interconnection guidelines for distributed generation less than 2 MW. The last major revisions to the standards occurred in February 2009.

Rhode Island

Rhode Island’s Legislature has defined a set of standard interconnection rules for all net metered DG. The rules do not cover a lot of issues defined by standardized procedures in other states. However, the state’s predominant utility—National Grid—maintains fairly comprehensive interconnection procedures that include many of the important standards seen in other states including a pre-application report, tiered and streamlined project review pathways, and specific timelines.

Vermont

In Vermont, the Public Service Board (PSB) has adopted interconnection standards for any distributed generation not subject to federal rules (i.e. anything connected to the distribution grid as opposed to the transmission system). For net metered systems less than 150 kW, these standards can be found in Board Rule 5.100. For all other systems, standards are found in Board Rule 5.500.

Over the past year, Vermont’s PSB has considered several changes to their interconnection standards.

First, in a proceeding to consider changes to Rule 5.100, which primarily deals with net metering policy, the most recently proposed changes remove any rules governing interconnection for net metered systems less than 150 kW. Instead, all net-metered systems would be governed by Rule 5.500. The revised net-metering rule has been filed with the Vermont Secretary of State. Stakeholders provided formal comments in early December 2016. The changes have not yet been formally adopted.

Second, the Vermont PSB is also in the process of revising Rule 5.500. The rule has been through several rounds of revisions, with the most recent one issued in September 2016 in a collaboration with the Vermont Department of Public Service, Green Mountain Power, and Renewable Energy Vermont. The changes include provisions for net-metered systems to reflect the proposed changes to Rule 5.100. Additionally, the proposal recommends the following provisions:

·         Specific information to be included in a formal pre-application report,

·         Requirement to provide interconnection queue information upon request, and encourages the utility to increase information accessibility in general

·         A supplemental review process for applications failing fast track screening criteria

·         Shorter and more defined timelines among other changes.

The rules are also written under the assumption that the PSB will maintain a new electronic interconnection application submission system funded by the U.S. Department of Energy. With a proposal on the table, the next step in this process requires the PSB to issue a revised rule for public comment.

Cuomo Delivers on Promise to Shut Down Indian Point, Supports New York’s Clean Energy Future

Cuomo Delivers on Promise to Shut Down Indian Point, Supports New York’s Clean Energy Future

  • The plant will close 14 years earlier than expected, without busting New York’s carbon budget.
  • The agreement between the State and Entergy includes support for displaced employees and $15 million fund for community and environmental benefit.
  • Indian Point’s closure is supported by the clean energy foundation laid by Governor Cuomo through the Reforming the Energy Vision process and other energy efficiency and renewables programs and investments.
  • The closure is aligned with New York’s Regional Greenhouse Gas Initiative commitments. Governor Cuomo proposed the nine states participating in the Regional Greenhouse Gas Initiative (RGGI) reduce their RGGI carbon cap by 30%, providing further assurance that Indian Point’s retirement won’t result in increased emissions.

In a landmark moment for clean, sustainable energy in New York, Governor Cuomo announced today that the Indian Point nuclear power plant will close by 2021, a full 14 years earlier than anticipated, without breaking New York’s carbon budget. The closure is made possible by the groundwork laid over the past several years by the Governor, Consolidated Edison, and the New York State Research and Development Authority, through programs and investments in renewables, energy efficiency, and distributed energy resources.

“This is exactly how you realize a transition to clean and sustainable energy—firm commitments built on years of groundwork along with strong support from the utility sector and well-aligned policy leaders,” said Karl R. Rábago, Pace Energy and Climate Center’s Executive Director.

Under the agreement reached between the State and Indian Point’s owner and operator, Entergy, Unit Reactor 2 will shut down as early as April 2020, and Unit Reactor 3 by April 2021. The deal includes vital support for local communities and the environment: as part of the package, Entergy will help displaced employees relocate to other opportunities within the company’s system, while the state, through NYSERDA, will provide workers with training in renewable technologies. Entergy will also contribute $15 million toward community benefits and the environmental health of the surrounding area.

The Governor has fought for years to close Indian Point in light of numerous safety and environmental concerns and the plant’s proximity to New York City. But the plant’s closure wasn’t contemplated in a vacuum. As part of New York’s Reforming the Energy Vision proceeding and the State Energy Plan, Governor Cuomo has made it a priority to increase New York’s energy efficiency and renewables supply, decrease carbon emissions, and remove barriers to distributed energy resources (DERs). Under the Governor’s leadership, the state’s Clean Energy Standard mandates that New York source 50% of its energy from renewables by 2030. The Governor has also been a strong proponent of providing support to communities and workers impacted by the closures of dirty, aging power plants that are replaced by clean generation.

Indian Point’s closure is also aligned with New York’s carbon policy. Governor Cuomo’s concurrent announcement today committing to strengthening the Regional Greenhouse Gas Initiative’s role in reducing carbon emissions from the power sector is a vital component of the Indian Point closure plan. The Governor’s proposal calls on the nine RGGI states to reduce the cap by an additional 30% below 2020 levels by 2030—from 78.2 million tons of CO2 in 2020 to 54.6 million tons in 2030. This equates to an approximately three percent annual cap decrease between 2020 and 2030. While analysis supported by Pace has shown that the least cost pathway to the Northeast states’ climate goals requires a five percent annual cap decline, the Governor’s commitment still represents an ambitious power sector carbon pollution reduction trajectory.

A meaningful and strong RGGI cap such as the one proposed by Governor Cuomo will be a vital component of the Governor’s promise that the closure of Indian Point will not cause a net increase in emissions. It will serve as an important backstop to carbon reduction initiatives as New York radically reshapes how electricity is produced and consumed within the state.

With the plant’s closure, New York will reap benefits beyond carbon reduction, including the growth of jobs in the renewable energy sector and a more resilient electric grid. While the energy transition details still have to be worked out, energy efficiency and demand response programs, local distributed energy resources, and large-scale renewables can step in to make the grid less vulnerable than it would be if it were to continue to draw power from the aging and unsafe Indian Point generating units. New York already has 700MW of transmission upgrades and energy efficiency ready to go, and Con Edison has been preparing for Indian Point’s closure for several years through ramped-up energy efficiency programs and innovative “non-wires alternatives” initiatives like the Brooklyn-Queens Demand Management project, which can all contribute to meeting the Governor’s 2021 timeline.

“While nuclear power can offer New York a clean-air alternative as we move toward a major expansion of renewable power, the trade-offs and the dangers posed by the reactors at Indian Point are not worth these risks,” Rábago said. “We believe the deadline of this plant’s closure will motivate utilities and clean energy providers to organize themselves around the transition to distributed generation and renewables, which can only be good for New Yorkers. I thank Governor Cuomo for putting an end to Indian Point’s operations and ensuring a healthier New York community. This news, combined with the Governor’s call to reduce the RGGI cap 30% by 2030, will result in a more rapid acceleration to an economy powered by clean, renewable energy.”

Indian Point’s closure represents a delivery on Governor Cuomo’s commitment to move New York toward a more sustainable and resilient energy future.

UN Environment Guide for Energy Efficiency and Renewable Energy Laws

UN Environment Guide for Energy Efficiency and Renewable Energy Laws

Richard Ottinger, Karl Rabago, John Bowie and a greater team contributed to the recently completed the UN Environemtnal Guide for Energy Efficiency and Renewable Energy laws. It was written to assist the many countries, communities and companies responding with proposed sustainable energy initiatives to meet their commitments under the Paris Climate Change Agreement and the UN Sustainable Development Goals.  Published by the United Nations Environment Program, it is written in response to needs expressed by energy efficiency and renewable energy project initiators, government officials, energy managers, developers, funders and particularly developing country energy legal draftsmen, asking for assistance in drafting needed legislation.

The Guide uniquely describes the laws applicable to every kind of efficiency and renewable energy measure, and those to prevent failures and fraud. It includes case studies evaluating the laws from several developing countries and a CDC providing the full text of laws adopted by many others.

To read the guide in full click here.