New York REV Order Allows Utilities To Offer Value-Adding "Smart Home Rate"

A New York PSC order in its Reforming the Energy Vision (REV) proceeding allows utilities to offer a "Smart Home Rate" on a "demonstration" basis.

"Although the Smart Home Rate (SHR) is discussed here in the context of demonstration and early adoption, it is the model for a rate design that should become the widely adopted norm as markets mature," the PSC said

"An SHR combines time-variable rates with the full value LMP+D compensation that is being developed in Case 15-E-0751. In other words, it combines highly granular time-based rates with location-and-time-based compensation for DER, in a manner that is managed automatically to optimize value for the customer and the system. The ideal SHR participant will combine generation (such as PV), electric vehicle charging, storage, and load management (such as a smart thermostat) with an inverter that allows two-way power flows and reads voltage and other system characteristics. The SHR participant should be able to offer load shifting, peak reduction, voltage and other ancillary support, and automatic response on a time interval specified by the utility," the PSC said

ESCOs had argued that SHRs should only be offered by third parties because they include DER products that utilities are not allowed to provide.

The PSC, however, said that SHRs should be offered on a demonstration basis by utilities

"In the long term, this argument may have merit, and it should be revisited when the market demand for SHRs is better established. In the near term, there are substantial risks and uncertainties associated with an SHR that may inhibit investment by customers and third party developers. Given the continued evolution of rate design and markets, there is a risk that an early version of an SHR could become superseded, or that DER providers who offer SHR as a service may move on to other business models. The ongoing work of the Value of DER proceeding will also have a substantial interaction with SHRs; early SHRs will inform the development of a full-value tariff, and a full-valuation methodology will eventually become part of the SHR. For these reasons, SHR at this time should be offered on a demonstration basis by utilities, with a hold-harmless provision that assures participating customers that their investments will not be stranded by superseding developments," the PSC said

"Each utility should collaborate with NYSERDA and with third-party developers to identify one or more SHR demonstration projects. Complete uniformity across utilities is not essential in a demonstration context, but working with NYSERDA, utilities should design SHRs that are compatible from the standpoint of DER providers," the PSC said.

In other matters, the PSC ruled, "Consistent with current practice, we will continue to require that individual customer usage data can only be released to developers authorized by customers on an opt-in basis. At the same time, we take steps through Green Button and other measures to facilitate these authorizations and transfers of data."