N.Y. Orders Immediate Development of Distribution-Level Demand Response Programs

The New York PSC has instituted a proceeding to begin the development and implementation of distribution-level demand response programs and other dynamic load management programs to be implemented prior to the summer of 2015.

Staff shall immediately consult with stakeholders to develop dynamic load management programs.

Staff was directed to develop a structure for distribution-level demand response programs modeled on current programs, to be instituted in utility territories that do not currently have such programs. The current Consolidated Edison programs are to be considered as models.

Programs to be developed are to include, but may not be limited to, programs that could be targeted to reduce a) system coincident peak demand, b) individual feeder/substation/load area/network peak demands, and c) operation of generating units in environmental justice areas.

The programs are to allow program participants to choose to work directly with the utility or participate through a competitive aggregator.

The program design is to reflect the value of system reliability, system efficiency, integration of renewable resources, avoidable costs, and customer bill management. "Where applicable, the design should recognize any impacts on environmental justice areas that might result from reduced reliance on peak generation units. It also should reflect the marginal cost of avoided transmission and distribution investments, granular to the network or substation level, if possible, as well as granular load information at the same system level," the PSC said in guidelines for the new programs.

Staff was directed to initially develop programs based on the following principles to be immediately implemented statewide:

A Peak Shaving program, which:

• will be called on a day-ahead basis when the forecasted peak load for the next-day is expected to be X% of the summer peak load projection; and

• requires all program participants to supply demand response

A Local Distribution System Reliability program, which:

• will be called to address local reliability issues in specific defined electrical or geographic areas; and

• requires only participants in affected areas to supply demand response.

A Direct Load Control program, which:

• involves the installation by customers of a "control device" which the utility is able to control remotely to directly switch load on and off.

In addition to administratively determined payment rates, including reservation, incentive, and performance payments, the PSC said that consideration should be given to various competitive procurement options, including promulgating Requests for Proposals or conducting auctions to obtain long term commitments from demand response providers.

Case 14-E-0423