New York State Public Service Commission Faces Criticism on Distributed Energy Resources Working Group

Strategic Insights -

The New York State Department of Public Service has issued a document in response to the Value of Distributed Energy Resources Working Group regarding rate design. Six clean energy parties have submitted comments on the joint utility draft tariffs establishing the customer benefit contribution (CBC) charge. The parties, including the Solar Energy Industries Association, the Alliance for Clean Energy New York, and Vote Solar, have raised concerns about the incorrect calculation of the CBC charge and its impact on customer economics for new solar customers.

Key Takeaways:

  • The Joint Utilities (JU) have incorrectly included programs not specified in the July Order when calculating the CBC charge, and did not perform the underlying calculations consistent with language of the July Order.
  • The JU failed to account for the contributions that NEM customers make to public benefit programs, which affects the calculations across utilities and the size of the charge.
  • The CBC charge in Consolidated Edison's territory is estimated to be nearly 12 percent higher than initially proposed due to these changes.
  • The JU filings calculate CBC charges for non-residential customers, including demand-metered customers, which is inconsistent with the Commission's view in the July Order.
  • The Clean Energy Parties (CEP) have recommended excluding the Dynamic Load Management (DLM) program from the CBC calculations and requiring the JU to rerun the calculations based on contributions from non-NEM customers.
  • The CEP has also recommended the PSC clarifies that the CBC should not be applied to non-residential and demand-metered customers.
  • The CEP remains interested in pursuing an improved, long-term time-of-use (TOU) rates for mass market customers to replace the bridge rates.

Statistics:

  • The CBC charge in Consolidated Edison's territory is estimated to be nearly 12 percent higher than initially proposed.
  • The estimated CBC charges by utility territory:

+ Central Hudson: -0.88%

+ ConEd: -11.92%

+ NGrid: -2.61%

+ NYSEG: -1.02%

+ O&R: -2.01%

+ RGE: -0.89%

  • The JU filings propose a CBC charge of $1.13/kW for Central Hudson, compared to the modified estimate of $1.13/kW.
  • The PSC has been urged to clarify that the CBC should not be applied to non-residential and demand-metered customers.

Sources:

  • New York State Public Service Commission, "Order Establishing Net Metering Successor Tariff" (July 16, 2020)
  • Joint Utilities of New York, "Joint Utilities Initial Comments on Staff Whitepaper on Rate Design for Mass Market Net Metering Successor Tariff" (February 24, 2020)
  • Solar Energy Industries Association, Alliance for Clean Energy New York, Coalition for Community Solar Access, Natural Resources Defense Council, New York Solar Energy Industries Association, and Vote Solar. (June 14, 2021)