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New York PSC Staff Whitepaper Proposes Expanded Oversight of Distributed Energy Resource Providers

Certain ESCO Demand Response Sales Would Be Subject To New Proposed Rules


April 12, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Staff of the New York Department of Public Service have issued a whitepaper proposing expanded PSC oversight of distributed energy resource suppliers (DERS)

Previously, under a "framework" order, DER oversight has been limited to when: (1) DER providers acquire customer data by any means established under the Commission’s authority, and (2) when DER services are sold into the distributed system platform provider (DSP) markets.

"This Whitepaper recommends the expansion of oversight to all DERS that participate in Commission-authorized and/or utility or DSP-operated programs or markets, including those which meet the standards described in the Framework Order and discussed above," the whitepaper states

"The development of REV and related proceedings have made it clear that the activities of DERS will be broad and varied. DERS that build or manage Community Distributed Generation (CDG) projects, participate in Community Choice Aggregation (CCA) programs, develop projects that receive compensation under the VDER tariff, or contribute to demonstration projects or Non-Wires Alternatives (NWAs) are all interacting with DSPs, the grid, customers, and markets in ways that make oversight appropriate and necessary, regardless of whether each program technically constitutes a 'DSP market' or involves the acquisition of customer data in a way that would meet the Framework Order standards," the whitepaper states

"Expanding DER oversight to cover all DERS that participate in Commission-authorized and/or utility or DSP-operated programs or markets will enable customers and DERS to more easily understand what products and services are covered," the whitepaper states

The whitepaper proposes a set of Uniform Business Practices unique to DERS (UBP-DERS).

In particular, Community Distributed Generation sponsors have been deemed by prior Commission order to be DERS, and would be subject to the proposed standards established by the whitepaper.

DERS that partner with municipal aggregations would also be subject to the UBP-DERS. Municipalities themselves, and ESCOs serving the CCAs, would be subject to the existing oversight requirements applicable to them, rather than UBP-DERS

Staff proposes that the UBP-DERS be applicable to entities selling demand response resources pursuant to distribution utility Dynamic Load Management (DLM) tariffs, including demand response providers, aggregators, and ESCOs. Staff proposes that entities selling DLM resources to utilities, including aggregators and ESCOs, be subject to both the business-to-consumer and business-to-business requirements of the UBP-DERS, for the relevant products and services.

Under the proposed UBP-DERS, DERS will be required to submit an application for eligibility to the PSC

The UBP-DERS also require the DERS to provide a customer disclosure statement at the time of contracting

"To avoid interfering with the development of innovative energy products and services, rather than attempting to create a standard disclosure statement for each individual product or service, a list of points that must be addressed in a disclosure statement should be developed, as well as requirements regarding the form of disclosure statements and their provision to customers. Staff invites comments on the disclosure statement term that should be included in all DER contracts generally, as well as those that should be included in specific types of DERS," the whitepaper states

Staff proposes that if marketing materials and/or sales agreements for DER products and/or services contain an estimate of future utility supply charges, the estimates of future utility supply charges must be calculated based on actual utility supply charges over at least the past twelve months, as well as those actual utility supply charges plus and minus five percent. Actual utility data for the past twelve months must be used, and may be augmented with actual data for a longer period of time at the DERS’ discretion.

Notably, the proposed UBP-DERS do not set forth standards for a verification requirement for DERS to enter into contracts with customers.

The proposed UBP-DERS do require that the DERS shall obtain a customer agreement to purchase the product or service and customer authorization to release information to the DERS, and retain "verifiable proof" of such authorization, but does not explicitly set forth what constitutes verifiable proof of authorization. The proposal does states that verifiable proof may include, but not be limited to, "a recording or signed writing, of authorization for each customer."

Under the proposed UBP-DERS, a sales agreement with a customer may be a written contract signed by the customer or a statement supporting a customer’s verifiable verbal or electronic authorization to enter into an agreement with the DERS for the products and services specified.

Under the proposal, the DERS shall provide residential customers the right to cancel a sales agreement within three business days after its receipt (cancellation period).

The proposed UBP-DERS would require DERS to satisfy one of the following three creditworthiness standards in order to sell a minimum of 50 kW to the DSP:

a. Amount of Minimum Assets: $10,000/kW

b. Tangible Net Worth: $1,000/kW

c. Security Escrow Payment: $200/kW

Staff is also considering whether or not a performance bond or other security requirement should be imposed as part of a DERS application process. Staff thus requests comments on the following issues: (1) the appropriateness of a performance bond; (2) the form such a bond should take and how it should be assessed; (3) the amount of any performance bond for a particular DER; and (4) the criteria under which the performance bond would be drawn upon.

Link to whitepaper

Case 15-M-0180

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