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New York City Slams Rapid REV Proceeding Compared to "Deliberate" Transition to Competition, Criticizes Singular Focus on Unengaging Opt-Out Aggregation Model
The City of New York has raised concern with the "aggressive" schedule for the New York PSC's Reforming the Energy Vision proceeding, contrasting the case's pace to the deliberate approach the PSC took to a similar fundamental restructuring of the industry, the introduction of competition, and also raised concerns with the lack of focus on customer engagement, and particularly the emphasis on opt-out municipal aggregation as a form of customer engagement.
"The City is concerned that the proposed pace of this [REV] proceeding will not allow adequate time for prudent decision-making," the City said.
"In the early 1990s, the Commission began to consider restructuring the electric industry in New York. Some initial work was done in utility rate proceedings and small-scale generic proceedings. A comprehensive examination of the issue was commenced in Cases 93-M-0229 and 94-E-0952.8 In total, the Commission spent more than three years examining and evaluating the issues before it issued Opinion No. 96-12 in May 1996," the City noted.
"Here, in contrast, the Commission is considering changes that could be more sweeping than those undertaken in Cases 93-M-0229 and 94-E-0952, but it is proceeding on a much more aggressive timeline, and, as noted above, without adequately analyzing all of the potential consequences and ramifications of the changes. For example, the Commission has not conducted any analysis of the costs compared to the benefits of the proposed changes, and Department Staff has indicated to the parties that there are no plans to do so before the Commission takes action. Whereas there was extensive input in Case 94-E-0952, here the Commission has made provision for only two rounds of comments – these comments and a round of comments on a Staff white paper that apparently will be based on very little record evidence," the City said.
Additionally, the City said that within the REV Customer Engagement Committee, there "was little consideration of engagement of residential and small, non-residential customers."
"Many options for engaging customers were never discussed at all, or only very cursorily. Only one potential model was presented to the Commission at its July 10 technical conference, and that model does not even constitute a method of customer engagement. Rather, it would have local governments make decisions on behalf of their constituents, then automatically apply the decisions to their constituents unless they take the affirmative step of opting out of the process. This process does little to actively engage customers; it primarily changes the decision-maker from the utility (which has vast experience in and knowledge of the electric industry) to the municipality (many of which may have little or no experience with or knowledge of the industry)," the City noted
"The customers may be involved at the outset, when a municipality selects a consultant to run the program and considers the type of products to be solicited of ESCOs, but thereafter there is little to no customer involvement. Moreover, these aggregation programs may not provide opportunities for customers to consider or install DER [distributed energy resources]. As demonstrated by the presentation at the Commission's July 10, 2014 technical conference and in the associated materials, there was no consideration or discussion or analysis of whether this model would work in New York or whether it would result in savings or other customer benefits. No details were discussed regarding what happens to those customers who opt out, and there was no consideration of the potential costs of this approach. As with the Markets Committee, this committee cannot be considered to have produced an adequate record upon which the Commission could make any decisions," the City said.
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July 22, 2014
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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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