When discussing the goals of New York’s Reforming the Energy Vision (REV) it is hard to escape the inherent optimism surrounding such a potentially game-changing and transformative initiative. Optimism is quickly met, however, with skepticism, especially when talking about execution strategies and rate regulation. NY REV has goals to comprehensively reform and reinvent the energy landscape in New York; and in doing so has set a broader vision for rethinking the utility business model. REV discussions focus on how the traditional utility business model and power grid are being transformed to include four distinct, yet interconnected, points of view: the utilities, technology providers, regulators, and customers. REV has reinvigorated and challenged these traditional points of view as part of its vision.
The 2nd NY Energy REVolution Summit took place in New York City July 26th-28th, bringing together invested participants to discuss the current state and evolution of REV. The conference provided the optimal forum for representatives spanning utilities, technology providers, regulatory bodies, advocacy groups, and energy service organizations to openly converse on REV-related topics. Moderators and panelists provided a range of viewpoints on how REV has impacted current processes and how public policy impacts the desired outcomes of the initiative.
As REV forges a new path, it is not uncommon for its stakeholders to desire a clear outline or roadmap, to assist in navigating the initiative’s priorities, monitor progress, and define metrics for success. Many questions need to be answered. What will the customer experience be? How reliable and efficient will the future power grid be? Which entities will be held accountable? Questions such as these highlight the sometimes conflicting objectives represented in REV’s progress and proceedings thus far.
With the New York’s Clean Energy Standard goals of meeting 50% renewables by 2030, announced this week by the Public Service Commission, another benchmark, or variable to an already complex process has been added to REV. The Joint Utilities (Central Hudson Electric & Gas, Consolidated Edison, New York State Electric & Gas, National Grid, Orange and Rockland Utilities, and Rochester Gas and Electric) have all filed progress reports on their REV Demonstration Projects. With each additional directive, stakeholder interests shift. While the roadmap is being defined, and subsequently navigated, together, one may notice how innovative thinking is competing with traditional market structures that fixate on explicit market and regulatory signals. For example, the present day energy landscape does not allow utilities to invest directly and own renewable and distributed energy resources to meet current power demands—not allow utilities to invest directly and own renewable and distributed energy resources.
West Monroe has been very active in following REV proceedings and filings, like many invested parties, because the energy landscape is dynamically changing. With each filing, proceeding, and mandate REV evolves and nudges each participant to reevaluate their incentives as well. Not only is it critical to be knowledgeable of the issues, it is essential to be nimble in understanding the distinct points of view of different stakeholders, whether they be on economic returns, business operations, technology availability, customer experience, or system reliability.
REV’s challenge remains: how to align the incentives of its participants and stakeholders. Without a transparent roadmap that addresses competing drivers while pushing participants to take risks and invest in future benefits, REV’s transformative goals may not reach their full, effective potential, or worse, fall flat. An unexpected benefit of the lack of clear roadmap is the level playing field for engaged parties to adjust and adapt together. As Demonstration Projects continue progression and benchmarks are executed, stakeholders need to keep long-term goals in mind while continually modifying and fine-tuning best practices to be effective in the revitalized energy landscape.