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New York PSC Addresses Utility Ownership Of Storage In Adopting Storage Policy

Directs Competitive Procurement Of 250 MW Of Storage Resources

December 14, 2018

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Copyright 2010-17
Reporting by Paul Ring •

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The New York PSC issued an order directing the utilities to competitively procure 350 MW of storage resources (discussed below).

In doing so, the PSC addressed utility-ownership of storage resources, and affirmed its prior conclusions on the issue from prior REV proceedings.

"In the REV Framework Order, the Commission also delineated the circumstances in which utility ownership would be considered, including 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 alternative; (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 DERs where markets are not likely to satisfy the need; or (4) a project is being sponsored for demonstration purposes. The Commission sees no compelling reason to modify utility ownership of energy storage system rules at this time," the PSC said in its December 13 order

"For BTM energy storage, the Commission finds no compelling reason to modify its stated preference for third-parties to develop these projects. Even in the case of electric grid-connected energy storage, utility ownership will be limited to compensating for failures in the marketplace and other specifically delineated situations," the PSC said in its December 13 order

The PSC did note, however, that, "As was suggested in the Roadmap, if the NYISO market participation rules inappropriately apply BSM to energy storage resources, as presently contemplated, the Commission’s current framework would likely allow the utility to support energy storage deployments that enhance the system value in a manner that provides benefits in excess of costs. If required, that support, under the market failure reasoning, may include utility ownership of energy storage resources."

The PSC directed that, by February 11, 2019, Central Hudson Gas & Electric Corporation, New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation d/b/a National Grid, Orange and Rockland Utilities, Inc., and Rochester Gas and Electric Corporation shall file an implementation plan detailing a competitive direct procurement process and the cost recovery accounting procedures to deploy 10 MW of qualified energy storage systems.

By February 11, 2019, Consolidated Edison Company of New York, Inc. shall file an implementation plan detailing a competitive direct procurement process to deploy 300 MW of qualified energy storage systems.

The PSC's order adopted various policies to encourage storage. The PSC in its order said that, "By this order, the Commission adopts an energy storage deployment policy to realize 1,500 MW of installed qualified energy storage systems by 2025, and a goal of up to 3,000 MW of installed qualified energy storage systems by 2030."

A news release from Gov. Cuomo's office said that the PSC's order authorizes a $310 million market acceleration bridge incentive to be administered by NYSERDA, in addition to $40 million announced in November for pairing storage with PV projects, and directs NYSERDA to file a market acceleration bridge incentive implementation plan

The PSC's order also directed development of a Pilot Distributed Energy Resource Data Platform, which shall contain both anonymized customer and system data useful to developers for planning and developing energy storage and other types of DER

"The Commission expects that this Pilot DER Data Platform will comply with the appropriate cyber security protections, such as potential Data Security Agreements, and directs Staff to engage with ongoing efforts to strengthen cyber security protections," the PSC said

To develop the Pilot DER Data Platform, the electric IOUs shall provide the following customer-related data: load profile attributes (average load, average peak, peak times, load factor), current tariff/program enrollment, North American Industry Classification System code, building size, NYISO zone, substation, circuit, installed DER by type, electric vehicle charging information, and hosting capacity.

Also of note is that the PSC directed that NYSERDA, in consultation with Staff, shall continue evaluating whether refinements to Load Serving Entities’ Renewable Energy Standard procurements are appropriate, to reflect the improved system benefits afforded by the operational flexibility of energy storage.

Case 18-E-0130

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