Principles for REV Demonstrations

Regulation: Memorandum and Resolution on Demonstration Projects [PDF]

Known as: Criteria for REV Demos

The intent of early REV demonstrations is to advance the development of new utility and third party service or business models and to gain experience with integration of distributed energy resources. Demonstrations will inform regulatory changes, rate design, and provide utilities with the opportunity to learn how best to use these resources in system development, planning, and operations.

The criteria for REV Demonstrations outlined in the Commission Memorandum provides important guidance for third party companies to consider as they propose new solutions to REV Connect.

Principles for REV Demonstrations

1. REV demonstrations should include partnership between utility and third party service providers. These partnerships may be unique to each demonstration depending on the situation. Utilities should endeavor to support demonstrations where third parties use their own capital.
2. The utility should identify questions it hopes to answer or problems or situations on the grid and the market should respond with solutions. Hence, third party participation through a traditional RFP/RFI method where the utility has pre-diagnosed the solution(s) does not meet this requirement. Data sharing will be essential to enable market participants to propose solutions.
3. Demonstrations should delineate how the generated economic value is divided between the customer, utility, and third party service provider(s). The demonstrations should propose how much of the projected capital expense needs to go into the rate-base versus competitive markets.
4. The market for grid services should be competitive. The regulated utility should only own distributed energy resources if market participants are unwilling to address the need and the utility is acting as the service provider of last resort (in this instance, “provider of last resort” and “needed” means that no one in the market is providing the solution and the distributed solution is less costly than alternatives for the problem).
5. While some demonstrations may be bilateral, and therefore may not be “competitive” per se, utilities and service provider should propose rules (data, terms, standards, etc.) that will help create subsequently competitive markets. In addition, utility and third party providers need to establish regulatory proposals to ensure safety, reliability and consumer protection. Service providers can retain intellectual property that results from base data that would be available to others.
6. Demonstrations should inform pricing and rate design modifications. For example, a component of a trial can test demand response, real time, or time of use pricing to better understand how to motivate different consumers. Demonstrations should include opportunities for third parties to demonstrate how various rate designs, information sharing, adjusted standby tariffs, and other technologies can be used to benefit consumers, encourage customer participation, and achieve REV’s efficiency and bill management objectives.
7. Utility and third party service provider(s) should consider deploying in their demonstrations advanced distribution systems, including two way communications, real time operation of dynamic load, and other system technologies that support awareness, flexibility, efficiency and cost-effectiveness.
8. Utilities should explore opportunities in their demonstrations to work with and include various residential, commercial, institutional and industrial customer participants.

This section will review the regulation underlying REV. To learn more about the more than 40 initiatives that comprise REV, read the New York State Energy Plan and visit rev.ny.gov.

• REV Regulatory Objectives
• Track One: Defining the REV Ecosystem
• Track Two: REV Financial Mechanisms
• Value of DER
• Principles for REV Demonstration Projects