Thursday, February 21, 2019

NYPSC Clarifies Value Stack Capacity Limits

Ruling Lands JFK Solar Project Partly Outside VDER

By Michael Kuser

The New York Public Service Commission on Thursday ruled that John F. Kennedy International Airport could have a solar project up to 5 MW compensated under the value stack program for distributed energy resources (VDER) while having other solar projects dedicated to serving on-site load (Case 18-E-0766).

The New York Power Authority and the Port Authority of New York and New Jersey filed a petition last month for clarification on the issue of net metering and VDER eligibility for its community distributed generation solar project after Consolidated Edison said its tariff did not allow such compensation where more than 5 MW was located on one site.

The PSC held its regular monthly session in Albany on Jan. 17.

Con Ed’s Jan. 4 response said that while the commission had expanded the capacity limit for eligible projects from 2 MW to 5 MW, it “has not acted, however, to remove the longstanding requirement that all eligible on-site generation be counted toward the size limitation for NEM [net energy metering], and therefore value stack, eligibility.” (See NYPSC Expands VDER Project Size to 5 MW.)

The commission’s original VDER order of March 2017 directed that compensation for eligible DER transition from NEM to the value stack, a methodology that bases compensation on the benefits provided by the resources (Case 15-E-0751).

The commission’s Jan. 17 declaratory ruling said “the rated capacity of projects used solely for serving on-site load and not seeking compensation under the value stack or net metering should not be counted towards the rated capacity limit.”

In response to Con Ed’s concern that the ruling could result in utility-scale generators splitting off 5 MW of a larger project to receive value stack compensation, the commission noted “that such a situation would represent a significantly different fact pattern than the one presented. … This declaratory ruling is intended to address only situations where the non-value-stack generation is used solely for serving on-site load.”

Wholesale Concerns

John B. Rhodes

“I find this ruling to be clear and helpful and a narrow clarification of the intent and of the intended application of our language,” PSC Chairman John B. Rhodes said.

“This is a simple but important interpretation of our 5-MW cap in the value stack compensation process,” Commissioner Gregg Sayre said. “I never intended through my vote on the value stack to exclude a small project from value stack compensation just because a large customer has a bunch of other generation in the same area that won’t ever hit the network.”

Commissioner James Alesi also supported the measure, but Commissioner Diane Burman voted no, saying “one concern is whether this intrudes on the wholesale market that would be going through the NYISO process rather than here.”

Ted Kelly

Ted Kelly, assistant counsel for the Department of Public Service, testified that “the reason that a project like this one or like another project that could be built under this declaratory ruling would not be an inappropriate avoidance of the wholesale market is because the primary project is intended for self supply, and customers always have the option of building generation for self supply, even beyond the 5-MW cap, without having to interconnect or be involved with the wholesale market. They can still be direct customers of a distribution utility while having that large generator for self supply.”

Diane Burman

Asked by Burman what would happen if NYPA and the Port Authority did something that would make it a wholesale market issue, Kelly said they would have to file an interconnection request with Con Ed.

“To the extent that NYPA has had an ongoing focus on increasing its jurisdictional reach, how do you see this item applying to that issue?” Burman said.

“This item is really within NYPA’s core existing jurisdiction in that it’s supporting one of its own customers, as Port Authority is a partial NYPA customer, including partially for its JFK load, supporting one of its own customers building on-site energy management tools, including renewables, energy efficiency and so on,” Kelly said.

Grants NYSERDA Access to Customer Utility Data

In a second ruling, the PSC granted the New York State Energy Research and Development Authority access to the data of customers not participating in NYSERDA programs to help the agency analyze the impact of its clean energy efforts (Case 14-M-0094).

The commission’s order directs NYSERDA and the state’s utilities to develop a memorandum of understanding governing the data exchanges. It also directs the agency to detail its need for customer data; to justify why other data cannot serve that need; to limit sharing of the information; and to ensure that it is not used for financial gain by any third party.

“It’s foundationally important that we ensure that the programs we approve do in fact work. Specifically, this means being able to tell if we’re making a difference, and that requires data,” Rhodes said. “This report assures that data in a way that’s careful and appropriate, which is necessary given that we’re talking about data and therefore about privacy and security.”

“If you can’t measure something, you can’t improve it successfully,” Sayre agreed.

Burman dissented without prejudice for NYSERDA to refile.

The order gives wide latitude to the agency without direct commission oversight “and that concerns me,” Burman said. “And it’s also being done without — in this case — without any external consumer advocates or other stakeholders having weighed in except for CPA [Consumer Power Advocates],” a group that represents hospitals, universities, medical schools and cultural institutions in New York.

“Frankly I think it is incumbent on anyone who’s submitting a petition that directly touches upon consumers … to make sure that there is direct outreach to consumer advocates or others who may be affected,” Burman said. “I would have liked to see in the petition the actual studies expected to be done. That would give us and other stakeholders more information on exactly what is planned. It’s a three-year plan and … we’d like to know what to expect.”

The commission also denied a request by New York City for unrestricted access to customer usage and other utility data.

“This sort of broad, nonspecific request is inconsistent with commission precedent,” the order said.

The commission noted that its December 2018 order adopting accelerated energy-efficiency targets opened a “comprehensive proceeding to assess the strategic use of customer energy usage data,” and invited the city and other interested governmental entities to participate in that proceeding (Case 18-M-0084). (See NYPSC Expands Storage, Energy Efficiency Programs.)

The named utilities in Thursday’s order are Con Ed; Orange and Rockland Utilities; Central Hudson Gas & Electric; National Grid gas distributors National Fuel Gas Distribution, Brooklyn Union Gas and KeySpan Gas East; Niagara Mohawk Power; New York State Electric and Gas; and Rochester Gas & Electric.

The commission also granted NYSERDA’s requests for relief from certain reporting requirements related to System Benefits Charge III and IV programs (Cases 05-M-0090; 10-M-0457). The SBC provides funding for NYSERDA programs targeting energy efficiency, research and development, and the low-income sector.

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