By William Opalka
Expanded retail-level demand response programs will take effect as soon as July 1 in targeted areas of upstate New York under measures approved by the New York Public Service Commission on Wednesday (14-E-0423).
The PSC ordered the five distribution utilities outside of New York City to offer dynamic load management to customers. Payments would be made to customers who reduce load during “called demand response events,” when load is expected to reach its peak.
The programs are mandated to be available everywhere by July 2016, with implementation plans due in January. DR is already available in the Consolidated Edison service territory.
The PSC acknowledged that the “accelerated program rollout” created technical challenges that would limit availability. Priority areas were established that offered the greatest benefits at the lowest costs, based on factors including system stress and local distribution constraints, the PSC said.
For this summer, the plan is generally limited to more densely populated areas around upstate cities, such as Buffalo. New York State Electric & Gas and Rochester Gas & Electric did not designate areas but were ordered to do so by July 1.
Commissioner Diane Burman dissented in part, saying the commission was moving too fast and that she preferred the rollout a year from now, when utilities were able to offer the service system-wide.
“Are we doing this to rush it, and at the end of the day we’re not going to be successful? And we’ve mandated something, rather than carefully analyzing it,” Burman said.
Noting that the program is already expected to be modified for 2016, she said the fast track will merely cause customer confusion and waste resources.
Chairman Audrey Zibelman referred to her own experience as a system operator and DR provider in the private sector as CEO of Viridity Energy. She said discussions with market players indicate they are anxious to get the program operating. She also cited the potential ill will created with customers when a product is promoted or promised, only to be rescinded at the last minute.
Dynamic load management is considered a key component of the state’s Reforming the Energy Vision effort to revamp the electric industry in New York.
“Consolidated Edison had implemented and developed distribution-level DR programs in response to commission directives and was deriving substantial benefits from those programs. Based on this existing experience, it was determined that distribution-level DR programs are proven ‘no regrets’ cost-effective programs, for which immediate implementation was appropriate,” the order says.
The plan was devised after a December 2014 order by the commission that directed upstate utilities to devise distribution level DR for this summer using Consolidated Edison as a model. Three types of programs were devised: a peak shaving program to be called on a day-ahead basis when forecasted load approaches the summer peak; the ability to call on local distribution resources to address reliability concerns in specific electrical or geographic areas; and a direct load control program allowing customers devices that can be controlled remotely by the utility.
According to the PSC, the typical residential customer supplying their own specialized thermostat would receive a one-time bonus ranging from $30 to $100, as well as an annual performance payment ranging from $20 to $50 for allowing the utility to control the thermostat during demand response events.
The other three utilities affected by the order are Central Hudson Gas & Electric, Niagara Mohawk and Orange & Rockland Utilities.