Four things I want from NY REV

The state of New York has embarked on a regulatory renovation of energy utility policies known as Reforming the Energy Vision (REV).?REV's stated goal is to build a clean, resilient, and affordable energy system for all New Yorkers.?Two years into this journey, I felt it would be a good time to take a look at where we are and what my hopes are for the outcome of the reforms.?So, here are my top 4 items that I would like to result from REV:

1. Reliability levels revisited

Regulation that addresses utility reliability hasn’t changed much in the past 50 years. Until the recent adoption of renewable energy standards, there’s been little reason to re-think them.

REV provides a compelling reason to take another look at regulated reliability levels. Do most customers need the high levels of reliability that our electric utilities provide? Is the high cost of that reliability worth it? For instance, do residential homes really need 99%+ uptime? Or can more flexible electric technologies enable the same quality of life, but with less grid reliability and significantly lower costs?

2. Resource diversity appropriately valued

A recent trend in the wholesale electric grid is the dramatic shift to natural gas-fueled generation. As our country’s history with oil suggests, it’s a big risk for our generation to be dependent on the health of just one commodity. Natural gas prices have a huge effect on the electric grid and the winter heating market. The 2014 Arctic Vortex is an illuminating example.

By diversifying our generation asset mix, we can lower this correlation risk.?Similarly, as I have written about in the past, geographic diversity of generation assets also provides increased reliability of generation. For instance, solar and wind generators alone tend to have highly variable output, but when paired together and spread over a large geography, they are highly stable and predictable.?REV is a good opportunity to recognize this advantage and value it appropriately.

3. Full integration of Distributed Energy Resources (DERs)

Currently, DERs attached to the grid are treated as special cases, slightly modifying the norm of the electric grid. Energy efficient measures fit neatly into bill surcharge funded utility programs.?Demand Response (DR) technologies sign up for DR programs.?Distributed Generators (DG) need to file interconnection engineering studies and undergo lengthy grid incorporation processes. None of these activities are seen as core utility operations.

Instead, the grid should be designed and planned as if DERs are the norm.?It should be quick, simple, and easy to implement EE, DR or DG on the electric grid.?In fact, it should be the norm, not the exception.

4. A paradigm shift

A main driver behind REV is the increasing technological diversity that electric consumers have at their disposal (such as solar panels, batteries, generators, and smart thermostats) and the impacts these technologies will have on the energy grids of the future.?However, most of the policy work in REV so far has been incremental improvement off of the status quo.?By heavily relying on past concepts, the true values of these new energy technologies will not be recognized, and incumbent interests will remain entrenched, until a catastrophic event displaces them, such as the Utility Death Spiral.

REV is an opportunity to take a step back and envision what the future energy grid should be.?Do we want widely distributed, smaller generation assets??Or, is large, centrally produced and transmitted power still more cost efficient, secure, and reliable??Are we willing to sacrifice reliability for renewable energy? What grid management technologies will need to be in existence to enable diverse generation resources, either distributed or central, dispatchable or not??We should start at the end goal, and work our way backwards to lay out incremental steps we can take to get to the end goal we desire.

What would you like to come from NY REV? Please share your thoughts.

? Copyright Lucas Finco 2024