BILL NUMBER: S4845

SPONSOR: PARKER
 
TITLE OF BILL:

An act directing the public service commission and the Long Island power
authority to extend elements of the compensation under the "Value Stack"
to behind-the-meter resources

 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this bill is to require the extension of the value of
distributed energy resources Value Stack to behind-the-meter resources
and microgrids as originally intended.

 
SUMMARY OF PROVISIONS:

Section 1: Within one hundred twenty days of the effective date of this
act the public service commission shall, after a hearing held on notice,
extend appropriate elements of the compensation under the "Value Stack",
as adopted by the commission in case 15-E-0751, to resources located
behind customer electric meters.
              

Section 2: This act shall take effect immediately.

 
JUSTIFICATION:

When the Reforming the Energy Vision (REV) initiative was launched it
was described as a programmatic reform of New York's energy regulatory
landscape that would foster the accelerated development of both grid-
side and behind-themeter distributed energy resources (DER). These
objectives were to be achieved via a market-signals driven approach that
would replace traditional incentive programs, including the "Customer-
Sited Tier".

In its Value of Distributed Energy Resources (VDER) proceeding the New
York State Public Service Commission (PSC) thereafter established the
"Value Stack" in order to recognize the value that DERs provide to the
electric grid, ratepayers, and the environment. To the extent that a
given DER exports the electricity it generates to the electric grid, the
VDER framework compensates DER projects for values including:

* Energy Value (LBMP)

* Capacity Value (ICAP)

* Environmental Value (E)

* Demand Reduction Value (DRV)

* Locational System Relief Value (LSRV)

However, if a given DER project does not export the electricity it
generates and instead directs that electricity to a customer behind a
customer electric meter, including a microgrid, the VDER framework
provides no compensation at all. This is the case even though
behindthe-meter projects produce every one of the listed VDER values at
least as effectively, and arguably more effectively, than grid-side
DERs.
The omission of behind-the-meter DERs from the VDER Value Stack is not
only inconsistent with the Commission's statements regarding the scope
of VDER, it also unavoidably leads to unsound results. For instance, a
DER located behindthe-meter at a critical facility, that is configured
to deliver its electricity to the facility in a microgrid design, which
will ride through extreme weather events, receives no compensation under
the VDER program. While the same DER located grid-side at a critical
facility that is instead designed to export all of its electricity and
cease operating when the grid goes down receives full Value Stack
compensation. This outcome is directly contrary to public policy and is
inconsistent with the intent of the REV initiative.

 
PRIOR LEGISLATIVE HISTORY:

2021-22: S6480 - COMMITTED TO RULES

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.