Energy Choice
                            

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Another Opt-Out Municipal Aggregation "Demonstration" Project Proposed in New York

May 6, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Citizens for Local Power (CLP) has proposed an opt-out municipal aggregation "demonstration" project for Ulster County, New York, as part of a collaborative on Reforming the Energy Visions projects resulting from Central Hudson's rate case.

Ulster County has a population of 181,000

CLP said that its proposed Ulster County Community Choice Aggregation (CCA) Demonstration Project, "is proposed with the support of Ulster County, the City of Kingston, elected leaders of other municipalities, and the President of Ulster County Association of Town Supervisors and Village Mayors."

"The model proposed here places its focus on energy planning for local build-out of distributed energy resources (DER) – a focus perfectly aligned with the Reforming the Energy Vision (REV) initiative to expand and deepen DER penetration in New York State. CLP refers to this as the '2.0' model of CCA, in contrast to the '1.0' model that is concerned mainly with procuring brokered supply of energy," CLP said.

"The proposed project involves four phases over an approximate 30-month period within the proposed three-year rate plan, from receipt of funding and the needed utility data to the launch of the CCA and enrollment of customers. It includes a request for funding through funds designated in the rate plan for REV demonstration projects," CLP said.

A draft preliminary budget for the CCA demonstration project, in the amount of $798,000, "is designed to allow CLP and Ulster County to cover basic costs during Phases I-IV of the creation of the CCA."

"Additional funds are being sought from other sources to provide added support for outreach and public education," CLP said.

"Over half of the draft budget is designated for honoraria for the consultants who will produce the White Paper, preliminary studies, Resource and Business Plan, Implementation Plan and RFP development documents, and a Final Report that will also serve as a resource for other municipalities seeking to form a CCA in New York State. Additional funds support Project staff, data security, additional consulting (outreach to specific constituencies, County consulting needs), legal advice, meetings, travel, and materials. Depending on the starting date of the demonstration project, it is estimated that approximately $310,000 will be required in Rate Year 1, $310,000 in Rate Year 2, and $180,000 in Rate Year 3," CLP said.

CLP said that, "CCA 2.0 is able to achieve lower overall costs through community-wide load reduction from investments in energy efficiency, renewable energy, and demand management, and is also able to achieve greater price stability by entering into long-term power purchase agreements (PPAs) and by diversifying the energy portfolio to include more renewable content. The focus on data analysis and planning makes it possible to efficiently target efforts to reduce energy use and install local renewable generation resources where they most benefit customers and the grid. To make this possible, a community maps its local renewable resources and energy efficiency opportunities, overlays those resources and opportunities with an understanding of grid load in the community, and develops an implementation plan for DER build-out. Through innovative rate designs and financing tools such as PPAs and revenue bonds, CCA 2.0 can facilitate DER investments by customers and expansion of local and/or regional renewable generation."

CLP said that, "the Ulster County CCA Demonstration Project could offer two distinct tariff rates, the standard tariff (SCP [Sonoma Clean Power] chose a standard rate that offers 33% renewable) and a 100% renewable tariff. Going beyond this basic rate design, novel pricing and rate design options are a natural for CCAs, whose local programmatic focus and ability to set rates provides a platform for marketing and financing DER services to residents and businesses and for facilitating investment in retail renewable cooperatives. The granular data used in CCA planning makes it possible to target load reduction by offering products and services that provide locational benefits, along with products and services that address the power market risk profiles of larger commercial and industrial customers. Rate options can also be developed to meet local economic expansion and business retention goals in the CCA service area."

"The demonstration project can be distinguished from the SW [Sustainable Westchester] pilot project in a number of specific ways, including: 1) undertaking an intensive assessment of local resources and utility data analysis to identify DER opportunities; 2) creating an energy planning process with active municipal, public, and stakeholder engagement; 3) creating institutional capacity for implementing an energy plan; 4) including all customer classes, and not just residential and small commercial; 5) working with the utility and enhancing its capacity to meet its REV mandates of supporting local reliability and increasing market penetration rates of energy efficiency," CLP said.

"To support the analysis of CCA needs and opportunities, Ulster County is requesting from Central Hudson data including aggregate usage by political district and customer class; system load and load profiles; geo-coded customer-level usage and demand data (where applicable) by latitude and longitude; and information on participation in existing energy efficiency and demand response programs," CLP said.

Case 14-E-0318

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