Tuesday, June 17, 2014

New York, consumers and SGCC research

By Patty Durand, Executive Director, SGCC

In my previous blog, “REVing up: a consumer-centric approach to energy,” I described the new tack taken by the New York Public Service Commission, as reflected in its April 24 report, “Reforming the Energy Vision.”

The “REV” report sets out the concepts and process for revamping New York’s distribution utilities and retail markets to boost reliability, resiliency and energy efficiency by supporting customer empowerment, demand response and clean, distributed generation in a comprehensive strategy. This effort is being led by NYPSC Chair Audrey Zibelman, founder and former CEO of Viridity Energy, Inc., a demand response aggregator.

Note the emphasis being placed on “customer empowerment” –the SGCC’s raison d’être. The good news for SGCC members and energy stakeholders interested in the consumer’s role in a new retail energy paradigm: New York’s direction will bring great attention to the role and importance of consumer engagement.

As the NYPSC process calls for public discussion of issues raised in the REV report, which includes consumer awareness, engagement and empowerment, I was pleased to be invited to speak at a May 22 symposium co-sponsored by the NYPSC and the Albany Law School. Other speakers at the symposium included Zibelman, Jon Wellinghoff, former chair of the Federal Energy Regulatory Commission (FERC), Patricia Hoffman, assistant secretary for the U.S. Department of Energy, Office of Electricity Delivery and Energy Reliability, and representatives from the Electric Power Research Institute, Rocky Mountain Institute, the Regulatory Assistance Project and several national laboratories.

The symposium was titled “An Energy Agenda for the Future” and I participated in a panel on “System Challenges & Customer Opportunities.” The panel was moderated by Lena Hansen of the Rocky Mountain Institute and included representatives from the Lawrence Berkeley National Laboratory, the Pacific Northwest National Laboratory and Electric Power Research Institute.

Each panelist had 10 minutes to introduce their work, so I presented SGCC research on the megatrends affecting energy consumers as well as our findings on customer segmentation and messaging. I made sure to mention that our research established that the more consumers know about smart grid and the service improvements and options it enables, the more they like it, and that customer engagement improves customer satisfaction. Much of the panel’s Q&A session focused on our SGCC findings which was fantastic.

For readers’ convenience, the SGCC research on these topics may be found in these resources:
After the panel, I was mobbed like a rock star. I couldn’t hand out my business cards fast enough. Once the symposium’s attendees – the usual stakeholders in the energy field – were awakened to the NYPSC’s grand vision, they quickly seized on the value of the SGCC’s findings. Personally, I felt great for all our efforts as an organization over the past few years. New York’s comprehensive vision of a consumer-centered retail energy market and the SGCC’s research on consumer engagement, education and empowerment fit well together and is super exciting to me.

Although many individual utilities have explored consumer-centric programs and business models and states like Texas (and New York) have de-regulated their retail markets and other states like California have promulgated policies to drive and manage grid modernization, I believe New York may be the first state to consider a policy framework that places the consumer at the center of the picture. Their work is leading edge and will help lead the changing the utility business model across the country if they succeed.

The process in New York calls for public discussion of all the issues in the docket, which will take time. Yet the REV docket also calls for “a target for a policy decision regarding the role of utilities before the end of 2014, followed by ratemaking reforms and utility-specific implementation plans.” That is a fast-track and will ensure that the needed discussions don’t cause the process to languish.

If New York can implement a plan that’s fair to utilities and to consumers, it will have resolved concerns over the much-debated “death spiral” scenario that envisions consumers increasingly meeting their home energy needs through solar photovoltaics and efficiency and thus relegating their utility to mere backup status and an unsustainable business model. The specter of high monthly access or infrastructure fees will recede – a concern that I share with many consumer and efficiency advocates that monthly fees will reduce incentives to conserve energy.

All eyes should be on New York’s effort as it tackles the first steps in this ambitious undertaking. I urge you to read the REV plan. The vision is broad. The steps appear do-able. If it succeeds, the consumer and their wants, needs and values will finally drive the market.    

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