The New York Public Service Commission on Thursday approved tariff modifications for energy storage cost and benefit recovery by the state’s six major investor-owned electric utilities, authorizing revenue sharing of 30% to utility shareholders and 70% to ratepayers when net wholesale market revenues derived from the storage assets exceed contract costs on an annual basis.

The PSC approved one filing by the largest utility in the state, Consolidated Edison Company of New York (CECONY) (Case No. 20-E-0444), effective Feb. 1, and a separate filing by all the other utilities, including fellow Consolidated Edison subsidiary Orange and Rockland Utilities (O&R), effective immediately (Case No. 18-E-0130).

The other IOUs included Avangrid subsidiaries New York State Electric and Gas (NYSEG) and Rochester Gas & Electric; Central Hudson Electric and Gas; and National Grid subsidiary Niagara Mohawk Power. Their joint filing with O&R was only slightly different from CECONY’s.

The commission in December 2018 set a goal of deploying 1,500 MW of storage by 2025. It required CECONY to procure and have operational by Dec. 31, 2022, at least 300 MW of energy storage scheduling and dispatch rights, and 10 MW for each of the other IOUs, provided that the bids do not exceed a utility-specific defined ceiling.

“The order achieves a good balance of consistency, transparency and practicality,” PSC Chair John B. Rhodes said. “It is good practice to order these tariff aspects, and it’s also important to open up opportunities consistent with our storage order of 2018 in order to support our clean energy goals for the state, our reliability goals for the state and system savings to the benefit of all New York customers.”

The utilities last year worked with government officials and project developers to fine-tune the processes and contract terms of state-mandated energy storage solicitations. (See NY Utilities, Developers Tweak Storage Procurement Terms.)

“We are at the actual beginning of our baby steps of our enormous goals on storage, and I’m confident that storage will come back to us time and time again as we move forward in compliance with the climate act,” said Commissioner John Howard, referring to the state’s Climate Leadership and Community Protection Act.

Yes to Marcy-New Scotland

The commission also unanimously granted a certificate of environmental compatibility and public need to the Marcy-New Scotland upgrade project being jointly developed by LS Power Grid New York and the New York Power Authority. It also approved lightened regulation and flexible financing for LS Power, up to a maximum amount of $478 million (Case No. 20-E-0361).

Lightened regulation under the Public Service Law is intended for companies that operate only at the wholesale electric market level and have no direct impact on the retail customers regulated by the PSC. NYISO selected the nearly $854 million project in April 2019 in a competitive solicitation process to address a commission-approved public policy transmission need. (See NYISO Board Selects 2 AC Public Policy Tx Projects.)

The Marcy-New Scotland project involves building 93 miles of a new 345-kV line from Edic to New Scotland on an existing right of way; erecting two new 345-kV lines from Princetown to Rotterdam; decommissioning two 230-kV lines from Edic to Rotterdam; and doing related switching or substation work at Edic, Princetown, Rotterdam and New Scotland.

“This line has been part of my life for most of my life, and in fact, I’ve lived for over 40 years within a mile or two of the current line,” Howard said. “The issue of the need for this line goes way back before this particular proposal. The need for more cross-state interconnection and at the time, the need was to help reduce pricing into downstate regions, which wanted to take advantage of lower-priced assets upstate.”

The more environmentally sensitive planning process these days will allow bringing many megawatts of renewable energy into the load areas in downstate New York, he said.

“I don’t think the commission really sees projects of this magnitude with this much consensus behind them,” Howard said.

NYSEG Dinged for Isaias; Other IOU Cases Pending

The commission reached a $1.5 million settlement with NYSEG for its alleged violations regarding its preparation and restoration efforts related to Tropical Storm Isaias, which struck the state Aug. 4 last year (Case No. 20-E-0586).

Isaias caused approximately 1 million customer outages in the state, affecting roughly 1.5 million New Yorkers. Gov. Andrew Cuomo on Aug. 5 directed the Department of Public Service to investigate the electric service providers’ performance in response to the storm.

The department evaluated NYSEG’s response against the utility’s emergency response plan and found that, “while NYSEG’s performance was better than its response to past storms, it nevertheless violated its own plans three times,” Rhodes said. “As part of the settlement, NYSEG admitted to the three violations and agreed to provide customers with $1.5 million in benefits, the maximum amount allowed under the statute.”

Of those million outages, 183,000 were located in NYSEG service territory, mostly in its Brewster Division that serves customers in Dutchess, Putnam and Westchester counties.

As part of its consent agenda, the commission approved further investigation into the Isaias preparation and response by Central Hudson, CECONY, O&R and PSEG Long Island. It also announced it was moving to the next phase of the proceeding.

PSEG is not under PSC jurisdiction, so the commission provided recommended enforcement actions to the Long Island Power Authority. The three utilities under its jurisdiction “now face maximum potential penalties of up to $137.3 million, with Con Edison and O&R also facing potential license revocation depending upon a finding of repeat violations,” the commission said.

The order to move to the next phase of investigation “misses the mark,” Commissioner Diane Burman said, recommending that the PSC rethink its approach to utility performance in responding to storms.

“We’re seeking to cure some possible procedural infirmities … however, we can’t really do that if we’re not fully examining the substantive information that we’ve received since the November 2020 orders to show cause,” Burman said. “We have the emergency response plan filings. … We are continually knowing that we have to assess and be ready to prepare for the next storm. We have an obligation to carefully look at the responses that came in as a requirement of the orders to show cause.”