The Business Council supports S.4423-B / A.1450-B, which would direct the public service commissions (PSC) to perform a cost benefit analysis of the Reforming the Energy Vision (REV) initiative.
The study would include an analysis of the potential benefits and costs of the REV initiative; the impact of REV on electric rates charged to consumers through additional taxes and fees, increased rates or any other charges required to fund the REV initiative; the feasibility of other potential initiatives and approaches to upgrading and updating the current energy infrastructure of this state; an analysis of potential benefits and costs of such other initiatives determined to be feasible pursuant to subdivision three of this section; the impact on consumers resulting from the cost and expense of replacing existing energy infrastructure; and any other information the public service commission deems necessary.
In addition, the study would determine “environmental leakage” which occurs when there is an increase in air emissions outside of New York as a result of energy load leaving New York due to the increased cost of REV or REV related infrastructure costs for a location with higher emissions per capita.
REV, proceeding (Docket No. 14-M-0101) began in 2014 when the PSC adopted the “straw proposal”. The broad framework laid out a vision for the regulated utility as a “Distribution System Platform (DSP) Provider” — akin to an air traffic controller that coordinates and facilitates the deployment of various distributed energy resources (DERs) on the grid.
“The idea, at its base, is to reform the utility business model and practices so that planning for and integrating DERs from third party providers is a central focus, and to ensure that utility companies are incentivized to consider DER solutions as an alternative to traditional grid and generation investments. Critical to that aim is the creation of vibrant markets for DERs on the distribution system.” – Utility Dive January 20, 2016
While virtually all of the energy stakeholders in New York are on board with the broad vision of REV, the PSC has explored numerous issues associated with REV; many of these issues will have significant cost to energy consumers. It is appropriate that the PSC to conduct cost benefit analysis on components of REV to ensure ratepayers are protected from inefficient use of ratepayer funds.
To date under the scope of REV just in the last three months the PSC has issued orders addressing community choice aggregation, resetting retail energy markets, authorizing utility-administered energy efficiency portfolio budgets, expanding the scope of the large scale renewables proceeding, and an authorizing clean energy fund framework. Collectively these Orders could cost ratepayers over $13B.
For these reasons, The Business Council supports passage S.4423-B / A.1450-B.