The American Utility Revolution Is Underway

July 18, 2016
NY electric revolution leading the nation to a new energy era

The Energy Times recently had several conversations with Audrey Zibelman, chair of the New York Public Service Commission, and a principal architect of the state’s far-reaching energy regulatory reforms. This is the first of a three-part series based on those conversations, edited for style and length.

NEXT UP:

Building the REVolutionary Platform

Navigating the Risks

ENERGY TIMES: New York has embraced a new set of regulatory principles under its REV – Reforming the Energy Vision – program. What is the overarching goal?

ZIBELMAN: The whole point of REV is to find opportunities for utilities to drive value to customers in the form of reduced costs and reduced bills by using distributed energy. We need to always remember that it is about the customer.  We don't want people leaving the grid because the regulatory model doesn't work for today's environment. 

ENERGY TIMES: The New York commission issued a landmark decision on May 19th restructuring utilities. Is it in effect now? 

​ZIBELMAN: Yes, it went into effect immediately.  Obviously, a number of the implementations and changes will occur over time both in and outside of rate cases.

ENERGY TIMES: What will be the first changes that commercial, industrial, and residential customers see? 

ZIBELMAN: People are starting to see the benefits of it because of the demonstrations projects by utilities now underway. Secondarily, we are continuing to look at filings and proposals by the utilities to address or promote ideas and opportunities that benefit customers.

ENERGY TIMES: Utilities can still make money the old-fashioned way, making large investments and getting them into rate bases.  Is that correct?

ZIBELMAN: Yes. Utilities will continue to invest capital in their system. Alongside of those recurrent investments, there are opportunities for utilities to look for ways to leverage the value of that investment for customers. In addition, they can reduce the size of the capital spends and have further revenues that substitute for what they would have ordinarily done.  What I hope the order made clear is that investment in enabling distributed energy resources can be treated as a regulatory asset, added to the rate base, and recovered in a traditional way.  There are alternatives that utilities previously would have shied away from because they provided no earnings opportunities.  We are looking to provide earnings opportunities that are both equivalent to and in some ways maybe higher quality than traditional earnings. 

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