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N.Y. PSC Staff Issue Report Exploring Revised Utility Code of Conduct Principles In REV Market
Staff of the New York PSC have issued a report exploring potential principles for revised utility codes of conduct under the Reforming the Energy Vision market.
Staff is convening a stakeholder meeting on May 3, 2016 to discuss the report
In adopting the REV framework, the PSC said that it did not generally favor utility ownership of distributed energy resources (DERs), but authorized such utility ownership under four circumstances: where 1) procurement of DER has been solicited to meet a system need, and a utility has demonstrated that competitive alternatives proposed by non-utility parties are clearly inadequate or more costly than a traditional utility infrastructure; 2) a project consists of energy storage integrated into distribution system architecture; 3) a project will enable low or moderate income residential customers to benefit from DER where markets are not likely to satisfy the need; or 4) a project is being sponsored for demonstration purposes.
Staff's proposed Guiding Principles for Revised Utility Codes of Conduct are as follows:
No preferential treatment
In some circumstances utilities could offer preferential treatment to their unregulated affiliates in managing the provision of DER. This is not limited to circumstances where a utility intentionally favors its affiliate, but also to where such treatment might be unintentional but still problematic, such as where the treatment results, for example from the ease or comfort of communication with an affiliate employee as opposed to an unknown third-party DER provider representative.
• The regulated utility will not provide preferential treatment to its affiliate(s).
• Specifically, there will not be preferential treatment regarding interconnections or dispatch for affiliates.
Sharing of information
Certain situations may arise where the sharing of additional information with affiliates may happen as a product of parent company communication platforms. In addition, information may be intentionally withheld from market participants or steered toward affiliates.
• The regulated utility will provide equal access of customer and system information to all market participants.
• The regulated utility will not disclosure information provided by other third parties to utility affiliate(s).
Independent functioning of distribution employees and employees engaged in DER or Value Added Service projects
Utility distribution employees could have information that should not be shared with regulated utility employees who work in DER procurement (even on a limited basis) or value added services. As it is difficult to determine the exact nature of these roles at this stage of the REV process, it is difficult to know the extent to which there should be limitations or restrictions on knowledge sharing. With the understanding that the REV is evolving, initial restrictions should be considered that may need to be further revised.
• The regulated utility will provide training and education to its employees to ensure there is no inappropriate sharing of competitive information amongst the various internal departments.
• The regulated utility will consider the need for stronger independent functioning rules as the market develops.
Transparency
Mechanisms should be established that facilitate transparency, especially with regard to what information might DER providers wish to have and how they may wish to receive such information to avoid any appearance of impropriety or inside information being used.
• An open DER procurement process such as competitive bidding should be considered to minimize any potential for, or appearance of, the misuse of inside information.
Avoiding Market Power Conflicts
Where a utility affiliate is able to compete with unaffiliated providers, some provision must be in place to insure fairness in utility selection.
• If utility procurements involving an affiliate are allowed, an independent party must monitor the process to ensure that the selection is unbiased.
Dispute Resolution
To be effective, codes need not just to be in place, but have some mechanism for insuring compliance and addressing any noncompliance issues that arise.
• Disputes regarding code of conduct issues will be addressed using the protocols being developed in Case 15-M-0180, “In the Matter of Regulation and Oversight of Distributed Energy Resource Providers and Products".
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April 6, 2016
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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com
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