By William Opalka

The New York Public Service Commission on Thursday approved a plan by Consolidated Edison of New York to address overloads in Brooklyn and Queens through a $200 million program that will deploy distributed generation and demand-side management (DSM) in order to defer installation of a $1 billion substation until at least 2026.

The commission said it was the first time New York has chosen to relieve congestion in “non-traditional” methods instead of authorizing construction of utility infrastructure.

Con Ed’s plan is consistent with the state’s “Reforming the Energy Vision” program to restructure the electricity market with greater reliance on technology and distributed resources, the commission said. “The commission is making a significant step forward toward a regulatory paradigm where utilities incorporate alternatives to traditional infrastructure investment when considering how to meet their planning and reliability needs,” the order states.

Commission Chair Audrey Zibelman added that because of the recent D.C. Circuit Court of Appeals decision striking down federal jurisdiction over demand response in wholesale markets, it’s important for state regulators to set market rules for that resource.

Con Ed said the feeders serving the Brownsville No. 1 and 2 substations began to experience overloads in 2013 and would be overloaded by 69 MW for 40 to 48 hours during the summer by 2018. A new substation, transmission subfeeders and a switching station would cost $1 billion, according to the company. The PSC accepted the company’s estimate of the DM Program’s costs and ordered a cap of $200 million.

The program would include 52 MW of non-traditional utility-side and customer-side relief, including about 41 MW of energy efficiency, demand management and distributed generation, and 11 MW of utility-side battery energy storage. This will include incentives to upgrade building “envelopes,” improve air conditioning efficiency of equipment, encourage greater use of energy controls, and establish energy storage, distributed generation or microgrids.

This will be supplemented by approximately 17 MW of traditional utility infrastructure investment, consisting of 6 MW of capacitors and 11 MW of load transfers from the affected area to other networks.

The commission said the project is hoped to have a salutary effect on utilities statewide. “Important and critical lessons will be learned as changes to traditional utility operations and ratemaking are explored, which are consistent with the core elements of the REV proceeding,” it said.