In the not-too-distant future, New Yorks distribution utilities will have to operate in a vastly different way than they do today. As the first baby step toward that future, the utilities have filed their initial demonstration projects as part of the states new energy plan, Reforming the Energy Vision.
New York has taken an integral first step toward turning its bold energy reform into reality, Rory Christian, director of the Environmental Defense Funds New York clean energy team, said in statement.
Last weeks sneak peek included microgrids, community energy and third-party efficiency programs from National Grid and Iberdrola-owned utilities. These projects are not just tests to satisfy regulatory requirements -- they are designed to be tweaked and eventually scaled to become marketable products.
On July 1, the utilities filed their proposals with the New York Public Service Commission for approval.
This is the largest group of new business models proposed from the largest number of utilities ever, Richard Kauffman, New Yorks chairman of energy and finance, said at the Renewable Energy Finance Forum. If successful, these projects will be deployed broadly across the state.
Con Edison is arguably already out in front of other utilities in New York in terms of thinking about its future business model with its Brooklyn-Queens Demand Management program and community choice aggregation in Westchester. Its three demonstration projects look to build on those two projects.
Consolidated Edison's first proposal is a building efficiency marketplace for commercial customers with Retroficiency.
Con Edison has already been working with Retroficiency as part of its Brooklyn-Queens Demand Management program. The utility has already seen a fourfold increase in customer engagement and a shortened sales cycle.
The marketplace will be a cloud-based software platform via which commercial customers can receive specific, actionable insights for energy conservation and connections to market partners that can carry out those retrofits. It will be rolled out to approximately 2,100 buildings.
On the residential side, Con Edisons second proposed project will be a customer engagement platform run by Opower, that will allow residential customers to receive more targeted information about their energy use and more targeted offerings from Sunrun, Nest and HomeServe. Con Edison will receive a referral fee from service providers that get new customers.
The offerings will be both paper- and web-based, and will be sponsored by a third-party energy provider leveraging Con Edisons customer data. The demonstration will be for customers in Brooklyn and Westchester and focus on those that are moving or establishing service.
Consolidated Edisons third proposed project falls in line with one of New Yorks primary objectives, eliminating electricity peaks. Con Edison has peaks in much of its territory after 5 p.m.
To help shave peak, Con Edison will partner with SunPower and Sunverge to integrate residential behind-the-meter storage. These assets at the grid edge, which Con Edison is calling a virtual power plant, will have a total capacity of 1.8 megawatts. For the demonstration, Con Edison will own the energy storage assets that will be offered through its solar partners.
Central Hudson Gas & Electric
Central Hudson Gas & Electrics first proposal is for a community solar demonstration project that will offer customers solar at the same price as conventional power. However, the project requires a grant from NYSERDA.
Under REV, utilities will not be allowed to own and operate distributed energy resources, although there is a limited exception for demonstration projects where warranted. However, since other utilities have proposed community solar demonstration projects without grants, it is unclear whether this undertaking will meet that benchmark.
Central Hudsons other proposed project is an energy-efficiency exchange dubbed Central-E. Residential customers will receive access to a web- and mobile-based portal that will give personalized energy information and action tips, as well as product and service offerings. For customers that want a deeper analytics dive, there will be a premium service for $4.99 per month.
Central Hudson said in the filing it had already engaged various parties for the meter, meter data management system and software components to build the portal, but did not name those partners.
Orange & Rockland
Upstate utility Orange & Rockland, a subsidiary of Consolidated Edison, has a proposal for a customer engagement platform for residential distributed energy resources.
The platform will be provided by partner Simple Energy, which is also working with Rochester Gas & Electric on another pilot project. The marketplace for Orange & Rockland will allow customers to make purchases and take energy-efficiency actions, which will earn points for additional purchases. Like other proposed energy marketplace platforms, the utility expects to earn revenue by creating value and leads for third-party energy providers that provide everything from solar and weatherization to LED bulbs and appliance recycling.
To learn more about the proposed projects from New Yorks other distribution utilities, check out our preview here. For many utilities, marketplaces in which they can monetize their customer data are a logical place to start as they wade into uncharted territory.
Eventually, the offerings and changes will have to be far more sophisticated. But Kauffman urged stakeholders to refrain from harsh judgment and eye-rolling when evaluating the complexity of these initial projects.
Please consider these projects in context, he said, adding that the process of monetizing new services instead of rate-basing them is an entirely new way of thinking. This is just the beginning.
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