By Michael Kuser

NEW YORK — New York is charting its own course for integrating distributed energy resources into its grid, different from the path trod by states with already high rates of penetration, industry experts said this week.

“California and Hawaii had to be reactive to distributed generation, but New York is taking a more proactive approach in trying to incent greater penetration of clean energy resources,” ScottMadden’s Chris Sturgill said at the New York Energy Market Summit held Aug. 6-8.

Sturgill noted the New York Public Service Commission this spring approved new DER measures as part of the state’s Reforming the Energy Vision initiative, which has enabled market participation for non-wires alternatives and the expansion of energy efficiency, demand response programs and demonstration projects. (See NYPSC OKs Con Ed EV Charging Program, REV Initiatives.)

“It’s easier to bring DER onto the grid now, thanks in part to informed dialogue between the utilities and DER owners,” Sturgill said.

“New York is pursuing aggressive policies to promote renewable energy, preserve competitive markets and resolve regulatory uncertainty,” said Paul A. DeCotis, senior director of West Monroe Partners.

Data First

Conference panelists pointed out that the growth of DERs and electric vehicles is changing once predictable load patterns. Utilities need to ensure continued reliability, recognizing that regulators are not as close to the system as they are, they said.

“I would start with data,” said Stuart Nachmias, Consolidated Edison vice president for energy policy and regulatory affairs. “We continue to support implementation of smart meters, and also the communications infrastructure to make them usable … but price signals are important to get generation closer to load … which is how New England evolved their locational pricing.”

Con Ed subsidiary Orange and Rockland Utilities, which serves customers in southeastern New York and northern New Jersey, has “seen a lot of solar proposals, which is not where the demand is,” Nachmias said.

Melissa Kemp, Northeast policy director for Cypress Creek Renewables, said New York must have a larger conversation about how to compensate solar projects.

“Initial costs may avoid later costs, such as avoided transmission spending, and a project may have positive health benefits, and those positive attributes should be accounted for, if not compensated,” Kemp said.

She also pointed to the importance of maintaining the low-income customer perspective and protecting against unnecessary rate increases. She added that those customers would also bear any extraordinary costs in the future, which could be avoided by increased spending now.

New Business Model?

Ross Kiddie, director at West Monroe Partners, noted that New York utilities submitted their second Distributed System Implementation Plans (DSIP) to the PSC a week earlier (Case No. 14-M-0101) and asked what are the must-have technologies to deal with DERs.

If people had controllable toasters, the utility or aggregator could preset a million of them and stagger their times to avoid spikes, said James Pigeon, NYISO manager of distributed resources integration.

“As we move forward, and the aggregators have the ability to control these assets, things will change,” Pigeon said. “The NYISO is not looking to change the business model and apply unique programs to every node on the grid. … We want to apply one model and have those resources respond to NYISO direction, whether for demand management or price signal.”

Damian Sciano, Con Ed director of distribution planning, said the electric system is moving from dozens of large generators to thousands of small-scale residential units, which could go into the millions when every customer’s appliances are connected to the grid.

“NYISO looks at New York City as just Zone J, but to us it’s a bunch of distribution lines that have thermal limits and voltage concerns,” Sciano said. “So when an aggregator puts together a bid for say 10 MW, it may completely satisfy what the NYISO is looking for, but it may be 10 MW on a part of the grid where we can only tolerate 2 MW at any given point.”

It goes back to the DER management system, even if someone else is aggregating something for the utility, he said. “We want to know exactly what’s being generated, very much preferably real-time, and understand how it’s affecting our system,” Sciano said.

Emilie Nelson, NYISO vice president for market operations, said she is focused on administering capacity and pricing at the wholesale level.

“If you rewind 15 years, the expectation for natural gas prices was not what they are today, so expectations can shift; reality can shift. A functioning market allows for third parties to bring in new solutions,” Nelson said.

Storage Issues

Sturgill asked how the ISO will consider proposals for energy storage resources in the wholesale market, particularly for those that are dual participation or trying to collect multiple pieces of the value stack. (See NY Releases ‘Roadmap’ for 1,500-MW Storage Goal.)

New York City is dedicated to working with utilities and others to value new DER technologies properly, including storage, said Susanne DesRoches, Mayor Bill de Blasio’s deputy director for infrastructure and energy.

“We see storage being able to support transmission and support the local network … for the complex picture in New York City, which is a bunch of islands with a unique power supply,” DesRoches said. “Storage should be valued properly for the attributes it provides for the system, and also we need clear permitting.”

Storage needs to be treated fairly on the system, said Peter Mandelstam, executive director for GRID Alternatives Tri-State, the largest solar energy nonprofit in the U.S.

“Having been involved in a lot of regulatory battles over the decades, both at the state and federal level, the most important thing is to get the rules right,” Mandelstam said. “Storage is now here, is now integral to the complete decarbonization of our electric system … the digital age now allows for the metering.”

Illinois Commerce Commissioner John Rosales, also vice chair for electricity at the National Association of Regulatory Utility Commissioners, said smart metering “is the catalyst” to put together a microgrid or adopt new technologies such as energy storage.

As a regulator, “you’ll never make everyone happy; there will be winners and losers, and they’ll be so unhappy that they will sue you,” Rosales said. “However, it’s important to remember that not making a decision is a decision.”