NY State Moves to Implement Transition to Distributed Generation

Last May, New York State made a landmark announcement – that it was officially changing the role of utilities to accommodate an energy structure based on distributed generation.

Governor Cuomo announced the "Reforming the Energy Vision" program, which will fundamentally transform the way electricity is distributed and used in New York State. 

Rather than selling energy that’s under centralized control, utilities will buy electricity from thousands of small generators that have, for example, solar on their roof. Utilities will make money by linking them together and integrating the energy into the grid. 

The plan requires the integration of energy efficiency, solar, wind, and other renewable energy technologies into the grid "to reduce energy bills and give customers more control over their energy use." 

Utility Plans Due This Year

Now, the NY Public Service Commission is moving on the program, directing utilities to file implementation plans by the end of this year. 

The directive says: 

• "The system values of distributed resources will be monetized in a market, placing them on a competitive par with centralized options."
• "Each utility will serve as the platform for interface among its customers, aggregators, and the distribution system"
• "Utilities will respond to new trends by adding value, thereby retaining customer base and the ability to raise capital on reasonable terms."
• "Utility ownership of distributed resources will be the exception rather than the rule." 
• "In the limited situation that utilities will be allowed to own distributed energy as a regulated asset, they will be restricted to recovery of their actual costs."

"Utilities will have the regulatory obligation, operational capability, and economic incentive to optimize the use of distributed energy, says the directive.

"The landmark steps New York State is taking today will reorient both the electric industry and the ratemaking process toward a consumer-centered approach that harnesses new technologies and markets," says Audrey Zibelman, Chair of the NY State Public Service Commission.

Up, up and away!

Read our article, World Is Moving to Distributed Energy: 165 GW by 2023.