Solar advocates push back on NYPSC approval of utility distributed energy valuation

There is perhaps no grid modernization proceeding more ambitious than New York State’s Reforming the Energy Vision (REV) process, which has sought to rewrite the rules of the distribution grid and in the process create an open platform for solar, batteries and other forms of distributed energy services to compete fairly.

And while the process has dragged along slowly for years, solar, clean energy and environmental groups have been widely supportive of these efforts, greeting each new ruling with applause for the effort that is being made and the vision that it represents. This included statements in support of the Value of Distributed Energy Resource (VDER) ruling that came out in March, which set an outline for methodologies to value behind-the-meter resources.

However, when New York Public Service Commission (NYPSC) put out a ruling approving utility approaches to calculate this value last week, the accolades ended. Solar Energy Industries Association (SEIA) and Vote Solar are saying that this ruling was rushed through without proper review and which will result in under-compensation of these resources.

“Although the industry supports the Commission’s goal to properly quantify the full value of clean energy, the recently approved utility implementation plans use incomplete and inadequately refined methodologies that fail to accurately calculate the economic and environmental benefits of solar,” reads a statement by SEIA.

Vote Solar was also disappointed with both the process and the ruling, noting that the utility proposals “faced fierce criticism” from the clean energy industry, environmental advocates and other participants. The organization notes that the calculation of the delivery/demand relief value and the locational value were particularly controversial.

Other advocates are already predicting impact on the market, with National Resources Defense Council’s (NRDC) Miles Farmer stating that the ruling will make it impossible for many solar projects to predict part of their revenues and obtain financing on that basis.

Process issues

Vote Solar notes that utilities filed their initial proposals three and half months ago, but says that much of the time between the filing and the rulings were taken up awaiting answers to discovery, and notes that the filings were changed several times throughout the process.

Vote Solar Senior Director Northeast Sean Garren also says that an additional informal process “did not allow for cross examination or very thorough examination of the underlying data and assumptions built into their tariffs”.

Vote Solar has warned that these process issues could undermine the REV vision, and warned that rapid approval of controversial utility proposals with little time for examination from other stakeholders could become a pattern.

Both organizations are asking NYPSC for improvements to the process to allow for a more thorough review of utility documents. “We remain committed to working with the PSC and Governor Cuomo to deliver on their bright vision for the future, but we need a level playing field with the utilities,” states Garren.