No Surprise: Utility Picked As N.Y. Distributed System Platform Provider, PSC "Expects" Tariffs, Not Auctions, to Govern Initial Distributed Procurements

In two unsurprising actions, the New York PSC selected the electric utilities as the provider of the Distributed System Platform (DSP), which is the PSC's new regulatory paradigm to encourage distributed energy resources (DERs), and said that, while not pre-determining any final outcomes, it expects initial procurements of DERs to be accomplished through tariffs, not auctions.

Regarding the latter issue, the PSC said, "Without predetermining outcomes, we expect that DSP markets in initial stages will consist primarily of open access tariffs as opposed to auctions. Development of auction-based markets must be undertaken with care to avoid potential exercise of market power by DSPs, DSP affiliates, or dominant DER providers."

"Until the markets are more established and there is sufficient asset development, the use of tariffs based on system value rather than a bid-based format will prevent both the utility and third parties from exercising market power and provide protection to consumers against market power abuses," the PSC said.

In a discussion regarding utility-ownership of storage, the PSC stated, "Rather, it is our expectation that this market will develop through tariffs that identify the fair and full value of reliable and fast responding storage."

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