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New York DPS Staff Advances ConEd/O&R Smart Home Automation & Supply Pricing Demonstration Project, Utilities May Proceed With Filing Detailed Implementation Plan

Includes Unique Supply Pricing Mechanisms Versus Standard Default Service

July 6, 2018

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Reporting by Paul Ring • ring@energychoicematters.com

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Staff of the New York Department of Public Service have found that a proposed Smart Home Rate REV Demonstration Project filed by Consolidated Edison and Orange and Rockland, for electricity customers, complies with a PSC order on "smart home" rates as well as REV objectives, and directed that the utilities file a detailed implementation plan

Under the proposed ConEd/O&R Smart Home Rate demonstration project, there would be two smart home rate options tested, with supply pricing different from standard default service

Both options (Option A and Option B) would have the same form of pricing, noted below, for these supply costs:

• Energy production (supply): Hourly supply charge (per kWh)

• Bulk (Wholesale) Transmission capacity (zonal congestion portion): Hourly congestion charge (per kWh)

• Bulk ancillary services: Flat charge per kWh for bulk ancillary services

Options A & B would differ in their treatment of generation capacity costs.

Option A would charge capacity costs to customers using a flat per kW coincident demand event charge (on maximum interval during the event)

Option B would charge capacity costs to customers using a variable coincident demand overage penalty (applied only during event hours to incremental demand above a set kW level preselected by the customer).

The two options also have unique distribution pricing mechanisms.

Under the project, customers (or their designated service provider) will respond to the time varying prices via WiFi thermostats or home energy management systems which are able to control central AC units as well as any other smart home devices participants may have. Customers in both rate design groups will be required to have central air conditioning (AC).

The demonstration will also test a storage plus solar system. All customers with this system will be placed on rate A, and participants will have the opportunity to operate a battery in such a way as to reduce their daily demand charge.

Staff cited areas which shall be further developed in the ConEd/O&R implementation plan

"As outlined in the Track Two Order, smart home rate projects 'should include a hold harmless provision that assures participating customers their investments will not be stranded by superseding developments.' Staff expects to review detailed procedures for satisfying this requirement in the forthcoming implementation plan, particularly as it relates to voluntary participation in time-variant rates and the risk of stranded customer investments in enabling technology devices," Staff said

The implementation plan shall be filed with the Secretary within thirty days

The utilities have estimated the participant pool for the smart home rate project as roughly 34,000 to 38,000 customers.

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