NY PSC Pushes Storage as Critical Component to Utility Planning Process:

Utilities Must Deploy Energy Storage Projects Before 2019

(See Part 2: Public Service Commission Proposes Revisions to Uniform Business Practices)

As Public Service Commission (“PSC”) Chair Audrey Zibelman departs from her role as leader of New York’s Reforming the Energy Vision (“REV”) initiative, she gave one final push intended to “accelerate the utility planning process” for creating the long-envisioned Distributed System Platform markets. The PSC voted to approve an order requiring each utility, by December 31, 2018, to deploy at least two energy storage projects in two separate locations that perform at least two types of grid functions (e.g., increasing hosting capacity, reducing peak load, ancillary services, etc.).

Zibelman commented that she hopes this requirement will help the utilities build relationships with storage developers and will assist utilities in understanding the challenges and opportunities of storage for enabling high penetrations of Distributed Energy Resources (“DERs”). Zibelman specifically cited fast-response storage devices as a crucial component to increasing system hosting capacity.

Commission Staff suggested that utilities and storage developers have three ways in which to fulfill this requirement: (1) by filing for a REV demonstration project consistent with the Commission’s February 2015 Track One REV Order; (2) applying for a non-wires alternative project; and (3) obtaining separate funding for a project beyond REV demonstration projects or non-wires alternatives. Commission Staff expressed a preference for projects developed as non-wires alternatives, which can be rate-based by utilities as assets that are deployed for distribution system relief.

In addition to the storage requirement, the PSC’s order will accelerate the Distribution System Implementation Plan (“DSIP”) process of the utilities by: (1) requiring each utility to publish circuit-level hosting capacity data on all circuits by October, 2017; (2) establishing milestones for the online interconnection portal to assist Distributed Energy Resource (“DER”) developers to interconnect with the grid; (3) encouraging utilities to develop non-wires alternatives rather than new substations or other infrastructure; (4) adopting the utilities’ proposed 15/15 data privacy standard, which provides that an aggregated data set may be shared with third parties only if it contains at least 15 customers, with no single customer representing more than 15 percent of the total group load.

In her comments, Zibelman cited a recent report from the Advanced Energy Economy finding that “advanced energy” is now a $200 billion industry in the United States—nearly double that of the beer industry—and the energy storage portion of that sector reported $427 million in revenue last year. The PSC’s order will serve to accelerate that trajectory and provide further opportunity for the advanced energy industry to grow in New York.

Phillips Lytle’s Energy Practice Team has extensive expertise in Public Service Commission/Utility regulatory matters, including all aspects of retail energy regulation in New York and formal petitions to the Public Service Commission. For more information about Phillips Lytle’s Public Service Commission expertise, please contact Thomas F. Puchner, Partner, at (518) 472-1224 Ext. 1245, tpuchner@phillipslytle.com, or Kevin C. Blake, Associate, at (716) 847-7082, kblake@phillipslytle.com.