Despite promises that electric deregulation in New York would bring lower rates and a more efficient grid, we suffer from some of the nation’s highest rates and an aging, inefficient grid expected to cost $30 billion to update.
Also, New York lags other states in switching to renewables, with its percentage of electricity produced by solar and wind stuck in the single digits.
But earlier this year, Gov. Andrew Cuomo set a goal of generating half of all New York’s electricity with renewables by 2030 and cutting carbon emissions by 40 percent.
Recognizing the state can’t meet this goal or pay for upgrades under the status quo, the state Public Service Commission (PSC), which regulates the state’s electricity industry, announced an initiative last year seeking a dramatic change in how electricity is produced, distributed and used.
Called REV (Reforming the Energy Vision), the PSC’s plan calls for “distributed energy resources” — installing micro-grids and relying more on solar, wind and hydropower. It also calls for new standards for appliances and “demand response,” shifting power demand to off-peak times and producing electricity as it’s needed. (Currently, power plants and other expensive infrastructure are designed to meet peak demand, so it’s underused most of the time and expensive to build and maintain.)
To publicize the plan and get public feedback, the PSC has been presenting the plan throughout the state. It paid a second visit to Kingston on November 12, with an information session conducted by PSC assistant counselor Anthony Belsito and attended by PSC Administrative Law Judge Julia Bielawski.
Attended by approximately 100, of whom half gave comments, the session demonstrated the intense interest and demand for reforms and evinced frustration with the PSC: speaker after speaker lamented the continuing domination of the all-powerful utilities in the REV, requested more sharing of information due to the technical complexity (and impenetrable jargon) of the state’s electrical system and the many moving parts of the plan and lobbied for funding for a consumer advocacy group to give residents and small businesses a more effective voice in the PSC’s decision-making process.
The PSC has issued an order designating the utilities as the distributed system operator, with each required to file implementation plans by June 2016. The commission notes that the new system of Distributed Energy Resources will rely on “smaller, cleaner power plants as well as energy-efficiency, energy-saving technologies” baked into power systems’ planning and operation, seeking “optimal system efficiencies, secure universal, affordable service, and development of a resilient, climate-friendly energy system.”
The utilities, promises the commission, “will be incentivized to help consumers find and purchase renewable power, efficiency and other DER services, much like an Internet search engine helps consumer and sellers to find each other.”
Belsito said the PSC is “rethinking the utilities as more of a platform similar to the internet, which would allow more players and the production of smaller, cleaner and more resilient facilities.”
Utilities would also be allowed to build large-scale renewable power projects — a decision many speakers said would continue the domination of large investor-owned corporations versus creating a level playing field for smaller operators that would boost local economies.
“Staff has issued a number of general proposals for rate making and rate structures that would [encourage] utilities to meet the state objectives for more resiliency, reliability and renewals,” said Belsito. “Another document [released by the PSC] is on the Benefit Cost Analysis, which compares different options, from nuclear to solar, not just in terms of the dollars but all the health and environmental issues.”
Belsito acknowledged that pushing for a reduction in electrical usage has, from the standpoint of the utilities, meant less revenue — a situation that’s discouraged reforms. “Utilities don’t have a lot of incentive to drive usage down,” he said. However, he said the best way to ensure a reliable grid is to have the utilities continue to play a central role. “They need to be compensated and get some kind of return.”
‘They should not control us’
But audience member John Dodson said the PSC must “allow competitive forces and us at the bottom to be served by people who bring the equipment to us and allow the utilities to devolve into a distribution system. They should not control us. We should have access to data and the ability to choose individually what we need. We should be able to sell to our next door neighbor at a price advantageous to them.”
How to create incentives for large-scale renewal projects is another issue the PSC is grappling with, Belsito said. He noted that one incentive — the federal renewable generation tax credit — is due to expire next year. Renewable “developers can’t get financing because there’s not enough certainty” about the market for renewables, he said. Allowing so-called Community Choice Aggregation (CCA), which would enable a community to buy electricity in aggregate, is another aspect of the PSC’s plan. (CCA, currently allowed in a dozen states, also could enable communities to generate their own electrical power.)
The PSC is also sponsoring two studies on net metering, the practice of allowing solar-panel owners to get paid for the electricity they put back into the grid at large.
The studies, said Belsito, are designed “to determine [net metering’s] impact to the system itself. We’re looking at alternatives to net metering that would better capture the value of those individual facilities. If you put solar panels in a place where there’s congestion and the solar power supports the reliability of the grid, you may get more than the person who just is pushing energy back to the system.”
Another idea is to establish different net metering prices by region, which would be “more fair and transparent.”
Although an audience member cited a study claiming electricity use would decline over the next 40 years, Belsito said demand is expected to increase dramatically, thanks to the explosion of electricity-powered devices and the expectation that electric cars and other new technologies will demand their share of power.
Too late for a doomed world?
While many expressed support for REV, many also said they doubted whether true reform and a meaningful commitment to a dramatic reduction in carbon emissions would occur to stave off the frightening implications of climate change.
“We are at critical juncture in New York on energy,” said Jen Metzger of Citizens for Local Power, a Rosendale-based group involved in the reform movement. “We have the greatest opportunity to make real change rather than tinker around the edges with reforms. Let’s all rewrite the energy rules that benefit our community, local economy and climate. Utilities will not be the agent of change, it will be us the people who will enable us to be more efficient and generate more power locally.”
Metzger also demanded “an end to the build out of fossil fuel infrastructure,” an opinion echoed by other speakers.
“When we need to halt fossil fuels altogether, why are we undertaking and approving a major expansion of natural gas usage?” asked Barbara Warren, executive director of Citizens’ Environmental Coalition. “Why is REV still talking about fuel neutrality and diversity? What happened to efficiency and renewables?”
Warren lambasted the PSC for “failing to even count the major methane emissions associated with using natural gas.” She noted that “climate change is so severe that our future may be unrecognizable.” Warren’s was one of many voices demanding an immediate halt to “all new natural gas pipelines and capacity expansions in the state” as well as “new natural gas power plants and conversions.”
High electricity rates were another concern of many speakers. “I get called in the middle of the night when the heat runs out and they turn to their electric portable heaters, which are ungodly dangerous and drive up big electric bills,” said Rochester Town Supervisor Carl Chipman. “When they can’t pay, they get shut off by the electric company, which wants $100 to turn them back on. Many times this is done illegally and we don’t have an office to work as a counterbalance to the utilities.”
Chipman and several SUNY New Paltz students working on behalf of the New York Public Interest Research Group asked the PSC to establish a consumer advocacy office.
Several speakers also said the PSC should implement “utility score cards,” which would indicate the amount of emissions and whether the utilities have met their emission reduction goals, the number of shut offs, from where the electricity was sourced and other data. People also lobbied for the elimination of nuclear power and others spoke out against the use of “smart meters,” citing what they believed was their adverse effect on health due to their emitting cell phone-like signals and their failure to result in reduced rates as promised.
“We need a more resilient and cost effective energy system that supports CCA and micro grids,” said Steve Noble, Kingston’s mayor-elect. “We have a lot of low-income residents who don’t want a utility system that turns its back on them.”
Noting that Kingston has a climate action plan and is a certified Climate Smart Community, Noble said the state should promise to cut carbon emissions by 80 percent by 2050 and “should procure local power. I have solar panels on my home, and we need to allow renewal energy to be accessible to everyone in the community.”
The commission responds
PSC spokesman Jon Sorensen, who was at the Kingston meeting, responded a few days afterwards by e-mail to some of the voiced concerns. He wrote that the PSC maintains a consumer advocacy office and named the Utility Intervention Unit of the Department of State, the Public Utility Law Project, and “multiple intervenors” as consumer advocates.
He also wrote that “REV is intended to give consumers more choices than ever before…in the end, REV is seeking to create new markets that can provide more affordable energy choices for consumers.” He noted that “of the nearly 10 different REV proceedings now underway, one is devoted to low- and moderate-income New Yorkers.” A “Low-Income Collaborative,” Sorenson wrote, is doing “an unprecedented amount of work under REV devoted to consumer empowerment and the needs of low- and moderate-income communities.”
Sorensen also wrote that utility scorecards “are being discussed/considered” and that “Community Choice Aggregation is one of the ongoing proceedings under REV…and one of the principle objectives spelled out in the Commission’s Track One order in February.”
Gov. Cuomo recently announced his plan to order state regulators to mandate that by 2030 half of all electricity generated must be from renewables, and Sorensen said a statement from the PSC about this was expected soon.