If you’re a regular reader of Advanced Energy Perspectives then you know that we’ve written several times on New York’s groundbreaking Reforming the Energy Vision (REV) proceeding. We’ve also written about rate design and efforts around the country to address net energy metering (NEM). Some NEM reform efforts are better than others. In some cases, utilities have been seeking to raise fixed charges on NEM customers or to impose per-kW monthly demand fees, arguing that NEM customers are not paying their fair share of the costs of the grid. These charges reduce the attractiveness of onsite distributed generation (DG) by shifting utility revenue collection from volumetric charges (per kWh) to monthly charges that cannot be reduced with onsite generation. In our view, such approaches are overly focused on maintaining certainty of revenue for utilities, and as a result fail to adequately consider the value of DG to the grid, such as deferring or avoiding future investments in generation, transmission, and distribution assets.
New York, under its Reforming the Energy Vision (REV) process, is taking a different approach. In its recent order on the Value of Distributed Energy Resources (DER), New York’s Public Service Commission (PSC) put forth an innovative structure for valuing the benefits of electricity from DG that is exported to the grid (and which, under traditional NEM, would be credited at the retail rate). But the order also revealed some problematic features of New York’s treatment of onsite renewable energy generation and the value of its environmental attributes – features worth revisiting as the Value of DER proceeding continues.