Assembly Bill A10354

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10354
 
                           I N  A S S E M B L Y
 
                             February 26, 2026
                                ___________
 
 Introduced by M. of A. KELLES -- read once and referred to the Committee
   on Energy
 
 AN  ACT to amend the public service law, in relation to establishing the
   New York State grid reliability and  energy  affordability  transition
   act
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. This act shall be known and may be cited as the  "New  York
 State grid reliability and energy affordability transition (GREAT) act".
   §  2. Legislative findings and declarations. The legislature finds and
 declares that:
   1. New Yorkers face rising energy costs  and  grid  reliability  risks
 driven  by  extreme weather, aging infrastructure, and use of expensive,
 polluting fossil fuel plants to meet peak demand.
   2. A virtual power plant is a coordinated network of energy  resources
 like batteries, electric vehicles, and smart thermostats working togeth-
 er  to  help meet the needs of the electric grid. During periods of peak
 demand for electricity, virtual power plants can reduce  demand,  supply
 electricity,  and  provide  other  essential  grid  services, preventing
 blackouts and lessening the need for costly upgrades to utility  infras-
 tructure.
   3.  Virtual  power  plants can lower electric bills for all ratepayers
 and reduce emissions of greenhouse gases and other air pollutants, espe-
 cially from aging "peaker plants" in disadvantaged communities.  Virtual
 power plants also pay participating families and businesses for support-
 ing  the  grid,  enabling  and encouraging them to invest in distributed
 energy resources and reduce their net energy costs. This  can  help  the
 state  advance its clean energy goals and give customers tools to better
 manage their energy bills.
   4. Current market rules, complex energy program structures, and inade-
 quate compensation to participants are preventing New  York  from  using
 virtual  power  plants at the scale they are capable of, leaving a great
 potential source of grid reliability,  ratepayer  savings  and  customer
 benefits untapped.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD14809-02-6
 A. 10354                            2
 
   5.  Through  the  Reforming  the  Energy Vision initiative, the Public
 Service Commission has taken  important  steps  toward  modernizing  New
 York's  energy  system,  encouraging  utilities to work proactively with
 customers and third-party providers to start the integration of distrib-
 uted  energy  resources  into system planning and operations in order to
 lower system costs, reduce emissions, meet  clean  energy  targets,  and
 advance  other  public  policy  goals.  Through this act the legislature
 provides comprehensive guidance to strengthen,  accelerate,  and  codify
 those efforts, giving the Commission clear statutory direction to expand
 distributed  energy  markets by enhancing existing utility programs, and
 providing new  program  opportunities.  This  act  further  directs  the
 Commission  to  reduce  program  barriers  and  maximize the benefits of
 virtual power plants.
   6. The policy of New York State shall  therefore  be  to  establish  a
 statewide virtual power plant program to promote greater use of distrib-
 uted  energy resources to support a cleaner, more affordable, resilient,
 and reliable electric grid.
   § 3. The public service law is amended by adding a new article  12  to
 read as follows:
                                ARTICLE 12
                        VIRTUAL POWER PLANT PROGRAM
 SECTION 240. DEFINITIONS.
         241. VIRTUAL POWER PLANT PROGRAM.
         242. COST RECOVERY.
         243. PROGRAM TARGETS AND PERFORMANCE INCENTIVE MECHANISMS.
         244. REPORTING.
   §  240.  DEFINITIONS. WHERE USED IN THIS ARTICLE, THE FOLLOWING TERMS,
 UNLESS THE CONTEXT OTHERWISE REQUIRES, SHALL HAVE  THE  FOLLOWING  MEAN-
 INGS:
   1.  "AGGREGATOR" MEANS A PERSON OR ENTITY, OTHER THAN A UTILITY OR ITS
 AFFILIATE, THAT ENROLLS AND MANAGES CUSTOMER PARTICIPATION IN THE VIRTU-
 AL POWER PLANT PROGRAM. AN AGGREGATOR SHALL NOT BE CONSIDERED  AN  ELEC-
 TRIC CORPORATION BY VIRTUE OF ITS PARTICIPATION IN THE PROGRAM.
   2. "BATTERY" MEANS A COMMERCIALLY AVAILABLE NON-ELECTRIC VEHICLE ENER-
 GY STORAGE SYSTEM UTILIZING MECHANICAL, CHEMICAL OR THERMAL PROCESSES TO
 ABSORB  ENERGY  GENERATED AT ONE PERIOD OF TIME, STORE SUCH ENERGY FOR A
 PERIOD OF TIME, AND DISCHARGE IT FOR USE AT A LATER TIME.
   3. "BATTERY RIDER" MEANS THE SECTION  OF  A  UTILITY'S  VIRTUAL  POWER
 PLANT PROGRAM TARIFF THAT SPECIFIES THE TERMS AND CONDITIONS FOR BATTERY
 RESOURCE PARTICIPATION.
   4.  "CAPACITY  VALUE"  REFERS  TO THE VALUE FROM REDUCING ENERGY USAGE
 DURING THE MOST ENERGY-INTENSIVE DAYS OF THE YEAR.
   5. "DEMAND REDUCTION  VALUE"  MEANS  THE  MONETARY  VALUE  OF  AVOIDED
 DISTRIBUTION SYSTEM COSTS.
   6.  "DEMAND  RESPONSE" MEANS ACTIONS TAKEN BY A CUSTOMER TO REDUCE THE
 AMOUNT OF ELECTRIC LOAD SUPPLIED BY A UTILITY, INCLUDING THROUGH REDUCED
 CUSTOMER CONSUMPTION OR THE USE OF  CONTROLLABLE  WATER  HEATERS,  SMART
 THERMOSTATS AND OTHER NON-BATTERY TECHNOLOGIES.
   7.  "DIRECT  PARTICIPANT" MEANS A CUSTOMER THAT ENROLLS IN THE VIRTUAL
 POWER PLANT PROGRAM DIRECTLY WITH A UTILITY RATHER THAN VIA AN  AGGREGA-
 TOR.
   8. "DISADVANTAGED COMMUNITY" MEANS A COMMUNITY IDENTIFIED AS DISADVAN-
 TAGED PURSUANT TO THE CRITERIA SET FORTH IN SECTION 75-0111 OF THE ENVI-
 RONMENTAL CONSERVATION LAW.
   9. "DISTRIBUTED ENERGY RESOURCE" MEANS BATTERIES, NON-BATTERY TECHNOL-
 OGIES,  AND  ELECTRIC  VEHICLES THAT ARE CAPABLE OF REDUCING OR SHIFTING
 A. 10354                            3
 
 CUSTOMER LOAD SUPPLIED BY A  UTILITY,  GENERATING  ELECTRICITY,  STORING
 ELECTRICITY,  AND/OR  DISCHARGING  ELECTRICITY TO SUPPLY CUSTOMER ENERGY
 NEEDS AND/OR EXPORT IT TO THE GRID.
   10.  "ELECTRIC  VEHICLE"  MEANS A CAR, TRUCK, BUS OR OTHER MOBILE UNIT
 THAT UTILIZES ELECTRIC POWER STORED IN AN ONBOARD BATTERY FOR PROPULSION
 ALONG WITH THE ASSOCIATED EQUIPMENT UTILIZED TO CHARGE THE BATTERY.
   11. "ELECTRIC VEHICLE RIDER" MEANS THE SECTION OF A UTILITY'S  VIRTUAL
 POWER  PLANT  PROGRAM TARIFF THAT SPECIFIES THE TERMS AND CONDITIONS FOR
 ELECTRIC VEHICLE RESOURCE PARTICIPATION.
   12. "ELIGIBLE CUSTOMER" MEANS AN ACTIVE RESIDENTIAL OR  SMALL  COMMER-
 CIAL  ELECTRIC  SERVICE  ACCOUNT  HOLDER  OF  A UTILITY WITH AN ELIGIBLE
 DEVICE.
   13. "ELIGIBLE DEVICE" MEANS CUSTOMER OR THIRD-PARTY-OWNED  DISTRIBUTED
 ENERGY  RESOURCES THAT MEET THE REQUIREMENTS FOR PARTICIPATION SPECIFIED
 IN THE RELEVANT VIRTUAL POWER PLANT PROGRAM RIDER.
   14. "GRID EVENT" MEANS A CONDITION ON AN ELECTRIC SYSTEM  IN  RESPONSE
 TO  WHICH  A  UTILITY CALLS UPON A VIRTUAL POWER PLANT TO PROVIDE A GRID
 SERVICE.
   15. "GRID SERVICE" MEANS THOSE SERVICES IDENTIFIED IN PARAGRAPH (A) OF
 SUBDIVISION ONE OF SECTION TWO HUNDRED FORTY-ONE OF THIS ARTICLE.
   16. "LOCATIONAL SYSTEM RELIEF  VALUE"  MEANS  THE  MONETARY  VALUE  OF
 AVOIDED DISTRIBUTION COSTS IN SPECIFIC GEOGRAPHIC LOCATIONS.
   17.  "LOW-TO-MODERATE  INCOME CUSTOMER" MEANS A UTILITY ACCOUNT HOLDER
 FOR A HOUSEHOLD WITH AN INCOME OF UP TO  EIGHTY  PERCENT  OF  THE  STATE
 MEDIAN INCOME OR AREA MEDIAN INCOME, WHICHEVER IS GREATER.
   18.  "NON-BATTERY TECHNOLOGY" MEANS DEMAND RESPONSE AND CUSTOMER-SITED
 DEVICES, INCLUDING BUT NOT LIMITED TO SMART THERMOSTATS, WATER  HEATERS,
 AND  OTHER  DEVICES THAT CAN BE CONTROLLED TO REDUCE OR OTHERWISE MODIFY
 CUSTOMER ENERGY CONSUMPTION.
   19. "NON-BATTERY RIDER" MEANS THE SECTION OF A UTILITY'S VIRTUAL POWER
 PLANT PROGRAM TARIFF THAT SPECIFIES THE TERMS AND  CONDITIONS  FOR  NON-
 BATTERY RESOURCE PARTICIPATION.
   20. "PARTICIPANT" MEANS AN AGGREGATOR OR A DIRECT PARTICIPANT.
   21. "PERFORMANCE PAYMENT" MEANS THE COMPENSATION RECEIVED BY A PARTIC-
 IPANT  FOR  THE  AMOUNT OF GRID SERVICE DELIVERED OR DEEMED DELIVERED BY
 THE CUSTOMER, DEVICE OR AGGREGATOR DURING THE APPLICABLE GRID  EVENT  OR
 GRID EVENTS.
   22.  "PROGRAM RIDER" MEANS ONE OR MORE OF THE FOLLOWING: (A) A BATTERY
 RIDER; (B) A NON-BATTERY RIDER; (C) AN ELECTRIC VEHICLE  RIDER;  OR  (D)
 ANY OTHER VIRTUAL POWER PLANT PROGRAM RIDER APPROVED BY THE COMMISSION.
   23.  "SYSTEM  PEAK  LOAD  REDUCTION"  MEANS A REDUCTION IN ELECTRICITY
 DEMAND OR THE AMOUNT OF ELECTRICITY SUPPLIED BY  A  UTILITY  DURING  THE
 HIGHEST USE PERIODS OF THE DAY.
   24.  "UTILITY" MEANS AN ELECTRIC CORPORATION AS DEFINED IN SECTION TWO
 OF THIS CHAPTER.
   25. "UTILIZATION FACTOR" MEANS A SYSTEM OR DEVICE'S CAPACITY USED AT A
 PARTICULAR TIME AS A PERCENTAGE OF THE SYSTEM OR DEVICE'S TOTAL  CAPACI-
 TY.
   26.  "VALUE OF DISTRIBUTED ENERGY RESOURCES" MEANS A STRUCTURED FRAME-
 WORK  FOR  DETERMINING  THE  COMPONENT  VALUES  OF  DISTRIBUTED   ENERGY
 RESOURCES  ESTABLISHED  BY  THE  COMMISSION  IN  CASE  15-E-0751, OR ANY
 SUCCESSOR PROCEEDING.
   27. "VIRTUAL POWER PLANT" MEANS AN AGGREGATION OF  DISTRIBUTED  ENERGY
 RESOURCES OPERATED IN COORDINATION TO PROVIDE ONE OR MORE GRID SERVICES.
   28. "VIRTUAL POWER PLANT PROGRAM TARIFF" OR "TARIFF" MEANS THE COMMIS-
 SION  APPROVED STANDARDIZED TERMS AND CONDITIONS, INCLUDING FORMAL PRIC-
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 ING SCHEDULES AND OPERATING RULES,  GOVERNING  AGGREGATOR  AND  CUSTOMER
 PARTICIPATION AND UTILITY OPERATION OF THE VIRTUAL POWER PLANT PROGRAM.
   § 241. VIRTUAL POWER PLANT PROGRAM. 1. NO LATER THAN NINETY DAYS AFTER
 THE  EFFECTIVE  DATE  OF  THIS ARTICLE, EACH UTILITY SHALL FILE WITH THE
 COMMISSION A VIRTUAL POWER PLANT  PROGRAM  PROPOSAL  INCLUDING  STANDARD
 TERMS  AND  CONDITIONS  FOR PARTICIPATION AND COMPENSATION IN ACCORDANCE
 WITH THE REQUIREMENTS OF THIS  ARTICLE.  EACH  UTILITY  SHALL  POST  ITS
 PROPOSAL  IN  A  CONSPICUOUS AND EASILY ACCESSIBLE PLACE ON ITS WEBSITE.
 THE COMMISSION SHALL PROVIDE PUBLIC NOTICE OF EACH  UTILITY'S  PROPOSAL,
 ASSIGN  A CASE NUMBER IN THE COMMISSION'S DOCUMENT AND MATTER MANAGEMENT
 SYSTEM, PROVIDE OPPORTUNITY FOR THE PUBLIC AND PARTIES TO  THE  CASE  TO
 COMMENT FOR A PERIOD OF NOT LESS THAN SIXTY DAYS, AND PROVIDE SUCH OTHER
 OPPORTUNITY  FOR  PUBLIC INPUT AS THE COMMISSION DETERMINES APPROPRIATE.
 THE COMMISSION SHALL CONDUCT AT LEAST TWO PUBLIC HEARINGS ON EACH UTILI-
 TY'S PROPOSAL FOLLOWING THE PUBLIC COMMENT PERIOD. PUBLIC HEARINGS SHALL
 BE HELD WITHIN THE UTILITY'S SERVICE TERRITORY, AT LEAST  ONE  OF  WHICH
 SHALL  BE  HELD  IN A DISADVANTAGED COMMUNITY WITHIN SUCH TERRITORY, AND
 SHALL OFFER VIDEO PARTICIPATION AND ANY OTHER  MEASURES  THE  COMMISSION
 DEEMS APPROPRIATE TO ENSURE ACCESSIBILITY. WITHIN NINETY DAYS OF A UTIL-
 ITY  FILING  ITS  PROPOSAL, THE COMMISSION SHALL, AFTER CONSIDERATION OF
 ALL PUBLIC AND PARTY COMMENTS, APPROVE, OR APPROVE  WITH  MODIFICATIONS,
 THE VIRTUAL POWER PLANT PROGRAM. WITHIN THIRTY DAYS OF FINAL APPROVAL BY
 THE  COMMISSION,  THE  UTILITY  SHALL FILE A VIRTUAL POWER PLANT PROGRAM
 TARIFF PROPOSAL WITH THE COMMISSION FOR PROGRAM IMPLEMENTATION. NO LATER
 THAN FORTY-FIVE DAYS AFTER  A  UTILITY  FILES  A  TARIFF  PROPOSAL,  THE
 COMMISSION  SHALL  APPROVE,  OR  APPROVE WITH MODIFICATION, THE PROPOSED
 TARIFF FOR IMMEDIATE IMPLEMENTATION. UPON  SUCH  APPROVAL,  THE  UTILITY
 SHALL  UPDATE  ITS  WEBSITE  WITH THE FINAL APPROVED PROGRAM AND PROVIDE
 ADDITIONAL CUSTOMER EDUCATION MATERIALS AND SUCH OTHER  CONTENT  AS  THE
 COMMISSION  MAY  DIRECT  OR  APPROVE  ON ITS WEBSITE. SUCH MATERIALS AND
 OTHER CONTENT SHALL BE DISTRIBUTED THROUGH BILL INSERTS AND  SUCH  OTHER
 MEANS DEEMED APPROPRIATE BY THE COMMISSION TO SUFFICIENTLY EDUCATE RATE-
 PAYERS OF THE PROGRAM'S EXISTENCE, BENEFITS, AND HOW TO PARTICIPATE.
   (A)  THE  PROGRAM  FILED  PURSUANT TO THIS SUBDIVISION SHALL INCLUDE A
 BATTERY RIDER AND A NON-BATTERY RIDER, AND MAY INCLUDE A SEPARATE  ELEC-
 TRIC  VEHICLE  RIDER  FOR  ELIGIBLE CUSTOMERS TO ENROLL ELIGIBLE DEVICES
 INTO THE APPLICABLE RIDER FOR THEIR RESPECTIVE TECHNOLOGIES. EACH  RIDER
 SHALL  INDEPENDENTLY, AT A MINIMUM, PROVIDE A SYSTEM PEAK LOAD REDUCTION
 SERVICE OFFERING, AND MAY PROVIDE  ADDITIONAL  GRID  SERVICE  OFFERINGS,
 INCLUDING, BUT NOT LIMITED TO:
   (I)  CLEAN  PEAK  SERVICE TO REDUCE RELIANCE ON FOSSIL FUEL GENERATION
 DURING PEAK DEMAND PERIODS;
   (II)  CONGESTION  RELIEF,  SYSTEM  UTILIZATION   FACTOR   IMPROVEMENT,
 LOCATION   SPECIFIC   DEMAND  REDUCTION,  AND  OTHER  LOCATION  SPECIFIC
 SERVICES;
   (III) AVOIDANCE OR DEFERRAL OF NEED TO CONSTRUCT NEW OR UPGRADE EXIST-
 ING COMPONENTS OF THE DISTRIBUTION SYSTEM;
   (IV) ANCILLARY SERVICES, INCLUDING BUT NOT LIMITED TO VOLTAGE  SUPPORT
 AND FREQUENCY REGULATION; AND
   (V) SUCH OTHER GRID SERVICES AS THE COMMISSION MAY DIRECT OR OTHERWISE
 DEEM ARE IN THE PUBLIC INTEREST.
   (B) THE PROGRAM FILED PURSUANT TO THIS SUBDIVISION SHALL PROVIDE OPER-
 ATING  PARAMETERS  AND RELATED TERMS FOR EACH GRID SERVICE OFFERED UNDER
 EACH TECHNOLOGY SPECIFIC RIDER, WHICH SHALL INCLUDE:
   (I) THE MINIMUM AND MAXIMUM NUMBERS OF GRID  EVENTS  THE  UTILITY  MAY
 CALL;
 A. 10354                            5
 
   (II) THE MONTHS OF THE YEAR THAT GRID EVENTS MAY OCCUR;
   (III) DAYS OF THE WEEK THAT GRID EVENTS MAY OCCUR;
   (IV) TIMES OF DAY THAT GRID EVENTS MAY OCCUR;
   (V) MAXIMUM DURATION OF GRID EVENTS;
   (VI) DAY-AHEAD NOTIFICATION OF GRID EVENTS, ALONG WITH ABILITY TO CALL
 EVENTS  ON  A DAY-OF BASIS FOR GRID SERVICES OR GRID EVENTS THAT ARE NOT
 OR CANNOT BE FORECASTED ON A DAY-AHEAD BASIS;
   (VII) A LIST OF ELIGIBLE DEVICES; AND
   (VIII) SUCH OTHER PROVISIONS AS THE COMMISSION MAY DIRECT OR OTHERWISE
 DEEM APPROPRIATE.
   (C) IF A UTILITY DOES NOT INCLUDE AN ELECTRIC VEHICLE RIDER AS PART OF
 THE UTILITY'S INITIAL FILING PURSUANT TO THIS SUBDIVISION, SUCH  UTILITY
 SHALL FILE FOR COMMISSION APPROVAL OF SUCH RIDER NO LATER THAN TWO YEARS
 AFTER THE EFFECTIVE DATE OF THIS ARTICLE.
   (I) THE ELECTRIC VEHICLE RIDER SHALL, AT A MINIMUM:
   (1)  OFFER  OPPORTUNITIES  FOR  PROGRAM PARTICIPANTS TO PROVIDE SYSTEM
 PEAK LOAD REDUCTION SERVICES. THE RIDER MAY ALSO OFFER OPPORTUNITIES  TO
 PROVIDE  ADDITIONAL  GRID  SERVICES  IDENTIFIED IN PARAGRAPH (A) OF THIS
 SUBDIVISION.
   (2) ADDRESS THE PARAMETERS IDENTIFIED IN PARAGRAPH (B) OF THIS  SUBDI-
 VISION FOR EACH GRID SERVICE OFFERING.
   (3)  BE  POSTED  BY THE UTILITY IN A CONSPICUOUS AND EASILY ACCESSIBLE
 PLACE ON THE UTILITY'S WEBSITE.
   (II) THE COMMISSION SHALL PROVIDE  PUBLIC  NOTICE  OF  EACH  UTILITY'S
 ELECTRIC  VEHICLE RIDER PROPOSAL AND ASSIGN A CASE NUMBER IN THE COMMIS-
 SION'S DOCUMENT AND MATTER MANAGEMENT SYSTEM. THE PROVISIONS  AND  TIME-
 FRAMES FOR COMMISSION APPROVALS AND FOR IMPLEMENTATION PROVIDED IN PARA-
 GRAPH (A) OF THIS SUBDIVISION SHALL APPLY TO THE ELECTRIC VEHICLE RIDER,
 EXCEPT THAT THE PUBLIC HEARING REQUIREMENT SHALL BE WAIVED.
   (D)  ON  AN  ANNUAL  BASIS ON SUCH DATE AS DIRECTED BY THE COMMISSION,
 EACH UTILITY SHALL FILE A REPORT IDENTIFYING ANY GRID SERVICE LISTED  IN
 PARAGRAPH (B) OF THIS SUBDIVISION THAT IS NOT INCLUDED AS A GRID SERVICE
 OFFERING  FOR  ANY  RIDER  THEN IN EFFECT. EACH REPORT SHALL DISCUSS ANY
 GRID CONDITIONS, TECHNOLOGY CONSTRAINTS OR OTHER CIRCUMSTANCES  PREVENT-
 ING  THE  UTILITY FROM INCLUDING SUCH GRID SERVICE OFFERINGS AND PROVIDE
 AN ASSESSMENT OF WHAT CONDITIONS OR CIRCUMSTANCES WOULD NEED  TO  BE  IN
 PLACE  TO  INCORPORATE  SUCH  OFFERINGS  IN  THE RESPECTIVE RIDERS. SUCH
 REPORTS SHALL BE SUBJECT TO COMMENT BY THE PARTIES TO THE RIDER AND  THE
 PUBLIC.    THE  COMMISSION MAY DIRECT UTILITIES TO SUBMIT FOR COMMISSION
 APPROVAL ADDITIONAL GRID SERVICE OFFERINGS UNDER ONE OR MORE  RIDERS  AS
 THE COMMISSION DEEMS APPROPRIATE.
   2. THE VIRTUAL POWER PLANT PROGRAM, INCLUSIVE OF THE RESPECTIVE RIDERS
 FILED  PURSUANT  TO  SUBDIVISION  ONE OF THIS SECTION, SHALL INCLUDE THE
 FOLLOWING ADDITIONAL TERMS AND CONDITIONS:
   (A) PROVISIONS FOR THE PARTICIPATION  OF  AGGREGATORS,  INCLUDING  THE
 ABILITY  TO DIRECTLY ENROLL, UNENROLL AND OTHERWISE MANAGE THEIR CUSTOM-
 ERS' PARTICIPATION, RECEIVE DISPATCH  INSTRUCTIONS  AND  OTHER  COMMUNI-
 CATIONS FROM THE UTILITY, AND RECEIVE PROGRAM PAYMENTS DIRECTLY FROM THE
 UTILITY.
   (B)  PROVISIONS FOR DIRECT PARTICIPANT CUSTOMERS TO ENROLL AND PARTIC-
 IPATE THROUGH THE UTILITY, DISENROLL FROM THE PROGRAM  WITHOUT  PENALTY,
 RECEIVE  DISPATCH  SIGNALS  AND  OTHER  COMMUNICATIONS FROM THE UTILITY,
 DELIVER PERFORMANCE MEASUREMENT AND VERIFICATION DATA  TO  THE  UTILITY,
 AND  RECEIVE  PROGRAM PAYMENTS DIRECTLY FROM THE UTILITY. ANY PROVISIONS
 IMPLEMENTING THIS  SUBDIVISION  THAT  NECESSITATE  THE  INSTALLATION  OF
 COMMUNICATIONS OR OTHER EQUIPMENT TO ENABLE DIRECT PARTICIPATION VIA THE
 A. 10354                            6
 
 UTILITY  SHALL  APPLY TO DIRECT PARTICIPANT CUSTOMERS ONLY AND SHALL NOT
 BE REQUIRED OF CUSTOMERS WHO PARTICIPATE VIA AN AGGREGATOR OR TO CUSTOM-
 ERS WHO DO NOT PARTICIPATE IN THE PROGRAM.
   (C)  PROVISIONS  FOR  DEVICE ELIGIBILITY WHICH SHALL ALLOW FOR PARTIC-
 IPATION OF NEW AND EXISTING DISTRIBUTED ENERGY RESOURCES ON  A  NON-DIS-
 CRIMINATORY BASIS.
   (D)  DISTRIBUTED ENERGY RESOURCE DEPLOYMENT INCENTIVES THROUGH UPFRONT
 PAYMENTS AS FOLLOWS:
   (I) BATTERY RIDER PARTICIPANTS SHALL BE ELIGIBLE  TO  RECEIVE  UPFRONT
 PAYMENTS  THROUGH  THE  ENERGY STORAGE INCENTIVE PROGRAM ADMINISTERED BY
 THE NEW YORK  STATE  ENERGY  RESEARCH  AND  DEVELOPMENT  AUTHORITY,  ITS
 SUCCESSOR  PROGRAM,  AND  SUCH  OTHER  PROGRAMS AS MAY BE AVAILABLE. THE
 COMMISSION SHALL CONSULT  AND  WORK  WITH  THE  NEW  YORK  STATE  ENERGY
 RESEARCH  AND  DEVELOPMENT  AUTHORITY  TO PROVIDE LOW-TO-MODERATE INCOME
 CUSTOMERS AND CUSTOMERS LOCATED IN DISADVANTAGED  COMMUNITIES  A  HIGHER
 UPFRONT  PAYMENT  VALUE. CUSTOMERS RECEIVING SUCH UPFRONT PAYMENTS SHALL
 BE SUBJECT TO CONDITIONS  ESTABLISHED  BY  THE  NEW  YORK  STATE  ENERGY
 RESEARCH AND DEVELOPMENT AUTHORITY.
   (II) ALL PROGRAM PARTICIPANTS SHALL BE ELIGIBLE TO RECEIVE FEDERAL AND
 OTHER  STATE  INCENTIVES,  WHETHER  IN THE FORM OF UPFRONT PAYMENTS, TAX
 CREDITS, REBATES OR OTHERWISE,  IN  ADDITION  TO  THE  UPFRONT  PAYMENTS
 PROVIDED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH AND THE PERFORMANCE-BASED
 COMPENSATION PROVIDED IN PARAGRAPH (E) OF THIS SUBDIVISION. WHERE POSSI-
 BLE,  THE  COMMISSION  SHALL  COORDINATE  WITH THE NEW YORK STATE ENERGY
 RESEARCH AND DEVELOPMENT AUTHORITY AND OTHER STATE AND FEDERAL  AGENCIES
 TO  DETERMINE  THE VALUE OF UPFRONT PAYMENTS AND SUPPORT CUSTOMER ACCESS
 TO SUCH PAYMENTS, INCLUDING HIGHER UPFRONT PAYMENTS FOR  LOW-TO-MODERATE
 INCOME CUSTOMERS AND CUSTOMERS LOCATED IN DISADVANTAGED COMMUNITIES.
   (E) PROGRAM PARTICIPATION COMPENSATION THROUGH PERFORMANCE PAYMENTS AS
 FOLLOWS:
   (I)  THE  COMMISSION  SHALL  APPROVE PERFORMANCE PAYMENT RATES FOR THE
 SYSTEM PEAK LOAD REDUCTION SERVICE IN THE FORM OF A DOLLAR PER  KILOWATT
 VALUE THAT IS NO LOWER THAN THE SUM OF THE CAPACITY VALUE AND THE DEMAND
 REDUCTION  VALUE USING THE MOST RECENT INFORMATION FOR SUCH VALUE COMPO-
 NENTS AS PROVIDED  IN  THE  COMMISSION'S  VALUE  OF  DISTRIBUTED  ENERGY
 RESOURCES  PROCEEDING,  CASE  NO. 15-E-0751 OR ANY SUCCESSOR PROCEEDING,
 FOR EACH UTILITY.
   (II) THE  COMMISSION  SHALL  APPROVE  PERFORMANCE  PAYMENT  RATES  FOR
 RESOURCES  PROVIDING  LOCATIONAL SYSTEM RELIEF SERVICES IN THE FORM OF A
 DOLLAR PER KILOWATT VALUE NO LOWER THAN  THE  LOCATIONAL  SYSTEM  RELIEF
 VALUE  USING  THE  MOST  RECENT INFORMATION PROVIDED IN THE COMMISSION'S
 VALUE OF DISTRIBUTED ENERGY RESOURCES PROCEEDING, CASE NO. 15-E-0751  OR
 ANY SUCCESSOR PROCEEDING.
   (III)  FOR A PERIOD OF NO LESS THAN FOUR YEARS FROM THE EFFECTIVE DATE
 OF THIS ARTICLE, THE DEMAND REDUCTION VALUE FOR ESTABLISHING THE  SYSTEM
 PEAK LOAD REDUCTION SERVICE PERFORMANCE PAYMENT RATE SHALL BE CALCULATED
 BASED  ON  THE  SYSTEM-WIDE  AVERAGE  OF  A UTILITY'S LONG-RUN, NON-ZERO
 MARGINAL COST OF SERVICE, INCLUSIVE OF ALL SUBSTATION  AREAS  WITH  NON-
 ZERO COSTS.
   (IV)  FOR  A PERIOD OF NO LESS THAN FOUR YEARS FROM THE EFFECTIVE DATE
 OF THIS ARTICLE, THE LOCATIONAL SYSTEM RELIEF VALUE FOR ESTABLISHING THE
 LOCATIONAL SYSTEM RELIEF  SERVICE  PERFORMANCE  PAYMENT  RATE  SHALL  BE
 CALCULATED BASED ON A SINGLE LEVEL OF LOCATIONAL SYSTEM RELIEF VALUE FOR
 EACH  UTILITY, REFLECTING THE THRESHOLD LEVEL AT WHICH A UTILITY'S COSTS
 ARE SIGNIFICANTLY HIGHER THAN COSTS ON AVERAGE ON A  SYSTEM-WIDE  BASIS.
 THE  LOCATIONAL  SYSTEM  RELIEF  VALUE  SHALL RELATE TO NO LESS THAN TEN
 A. 10354                            7
 
 PERCENT OF A COMPANY'S SERVICE AREAS FOR NO LESS THAN  FIVE  YEARS  FROM
 THE EFFECTIVE DATE OF THIS ARTICLE.
   (V) THE COMMISSION SHALL UTILIZE THE DEMAND REDUCTION VALUE, LOCATION-
 AL  SYSTEM  RELIEF  VALUE,  AND  OTHER VALUES CALCULATED PURSUANT TO THE
 COMMISSION'S VALUE OF DISTRIBUTED ENERGY RESOURCES PROCEEDING, CASE  NO.
 15-E-0751, OR ANY SUCCESSOR PROCEEDING, AND SUCH OTHER RELATED VALUATION
 CONSIDERATIONS  TO  ESTABLISH  PERFORMANCE  PAYMENT RATES, OR SUCH OTHER
 COMPENSATION RATES AS THE COMMISSION DETERMINES APPROPRIATE,  FOR  OTHER
 GRID  SERVICE OFFERINGS APPROVED UNDER THE PROGRAM OTHER THAN THE SYSTEM
 PEAK REDUCTION SERVICE AND LOCATIONAL  SYSTEM  PEAK  REDUCTION  SERVICE,
 PROVIDED THAT SUCH RATES REFLECT FAIR VALUE FOR THE SERVICE PROVIDED.
   (VI)  PARTICIPANTS SHALL RECEIVE THE PERFORMANCE PAYMENT RATE APPROVED
 FOR A GRID SERVICE THAT IS APPLICABLE AT THE TIME OF  ENROLLMENT  FOR  A
 PERIOD  OF  FIVE  YEARS.  AFTER SUCH FIVE-YEAR PERIOD, A PARTICIPANT MAY
 REENROLL IN THE PROGRAM AT THE THEN APPLICABLE RATE FOR SUBSEQUENT FIVE-
 YEAR TERMS.
   (VII) PARTICIPANTS SHALL BE ELIGIBLE TO PROVIDE MULTIPLE GRID SERVICES
 UNDER MULTIPLE TECHNOLOGY RIDERS AND RECEIVE COMPENSATION FOR EACH  GRID
 SERVICE  PURSUANT  TO EACH RIDER; PROVIDED, HOWEVER, THAT THE GRID VALUE
 DELIVERED UNDER ONE SERVICE IS INCREMENTAL TO THAT PROVIDED UNDER ANOTH-
 ER SERVICE.
   (VIII) CUSTOMERS SHALL HAVE THE OPTION TO RECEIVE UPFRONT PAYMENTS AND
 PERFORMANCE PAYMENTS DIRECTLY OR TO ASSIGN SUCH PAYMENTS TO A THIRD-PAR-
 TY.
   (IX) PERFORMANCE PAYMENTS SHALL BE MADE BY A UTILITY TO THE APPLICABLE
 CUSTOMER OR THIRD-PARTY DESIGNATED BY THE CUSTOMER NO LESS THAN ONCE PER
 YEAR, BUT MAY BE MADE MORE FREQUENTLY, AS APPROVED BY THE COMMISSION.  A
 UTILITY  SHALL  PROVIDE  PERFORMANCE  PAYMENTS IN THE FORM OF A CHECK OR
 ELECTRONIC TRANSFER OF FUNDS,  SUCH  AS  DIRECT  DEPOSIT  OR  OTHER  ACH
 PAYMENT.
   (X) THE COMMISSION SHALL PERIODICALLY REVIEW PERFORMANCE PAYMENT RATES
 IN  RELATION  TO  A UTILITY'S PERFORMANCE IN ACHIEVING THE PARTICIPATION
 TARGETS ESTABLISHED IN SECTION TWO HUNDRED FORTY-THREE OF THIS ARTICLE.
   (F) PROVISIONS TO MEASURE DEVICE PERFORMANCE, WHERE:
   (I) BATTERY PERFORMANCE SHALL BE MEASURED DIRECTLY  AT  THE  INVERTER;
 AND
   (II)  NON-BATTERY  AND  ELECTRIC VEHICLE TECHNOLOGY PERFORMANCE MAY BE
 MEASURED DIRECTLY AT THE DEVICE OR THROUGH SUCH OTHER  METHODOLOGIES  AS
 THE COMMISSION MAY APPROVE.
   (G)  PERFORMANCE  PAYMENT COMPENSATION CALCULATIONS AND METHODOLOGIES,
 WHERE:
   (I)  SYSTEM  PEAK  LOAD  REDUCTION  SERVICE  AND  LOCATIONAL  SERVICES
 PROVIDED  UNDER A BATTERY RIDER SHALL BE COMPENSATED BASED ON THE APPLI-
 CABLE  PERFORMANCE  PAYMENT  RATE  MULTIPLIED  BY  THE  AVERAGE  BATTERY
 PERFORMANCE  AS  MEASURED  AT  THE  INVERTER DURING GRID EVENTS OVER THE
 COURSE OF THE APPLICABLE MEASUREMENT PERIOD. THE  COMMISSION  MAY  ADOPT
 THE  SAME  OR  ALTERNATIVE  METHODOLOGIES  TO CALCULATE COMPENSATION FOR
 OTHER GRID SERVICES OFFERED UNDER A  BATTERY  RIDER  AS  THE  COMMISSION
 DEEMS APPROPRIATE.
   (II)  THE  COMMISSION SHALL PROVIDE METHODOLOGIES TO CALCULATE COMPEN-
 SATION FOR GRID SERVICES OFFERED UNDER NON-BATTERY AND ELECTRIC  VEHICLE
 RIDERS  TAKING  INTO ACCOUNT THE ABILITY TO DIRECTLY MEASURE PERFORMANCE
 FROM THE RESPECTIVE ELIGIBLE TECHNOLOGIES, COSTS OF FACILITATING  DIRECT
 MEASUREMENT, AND RELATED CONSIDERATIONS.
 A. 10354                            8
 
   (H)  A  UTILITY MAY NOT ASSESS PENALTIES UNDER THIS PROGRAM; PROVIDED,
 HOWEVER, THAT THE COMMISSION MAY APPROVE REASONABLE MECHANISMS TO DISEN-
 ROLL PARTICIPANTS FOR CONTINUED NON-PERFORMANCE.
   (I)  PROVISIONS ALLOWING CUSTOMERS TO CO-PARTICIPATE IN OTHER PROGRAMS
 AND PROVIDE MULTIPLE GRID SERVICES  ACROSS  RIDERS  WITHIN  THE  VIRTUAL
 POWER PLANT PROGRAM, WHERE:
   (I)  CUSTOMERS  MAY  CO-PARTICIPATE  IN  THE  NET  METERING,  VALUE OF
 DISTRIBUTED ENERGY RESOURCES, AND ANY OTHER  APPLICABLE  INTERCONNECTION
 TARIFF  APPROVED  BY THE COMMISSION. NET METERING CUSTOMERS SHALL NOT BE
 REQUIRED TO TRANSITION TO A VALUE OF  DISTRIBUTED  ENERGY  RESOURCES  OR
 OTHER  NON-NET  METERING  INTERCONNECTION  TARIFF  TO PARTICIPATE IN THE
 PROGRAM.
   (II) CUSTOMERS MAY CO-PARTICIPATE IN ONE OR MORE  PROGRAM  RIDERS  AND
 PROVIDE  MULTIPLE GRID SERVICES WITHIN EACH RIDER. CUSTOMERS MAY PARTIC-
 IPATE IN OTHER GRID SERVICE PROGRAMS OUTSIDE  THE  VIRTUAL  POWER  PLANT
 PROGRAM,  INCLUDING WHOLESALE MARKET PROGRAMS WHERE OTHERWISE PERMITTED,
 SO LONG AS SUCH VALUE IS DISTINCT FROM THAT PROVIDED UNDER  THE  VIRTUAL
 POWER PLANT PROGRAM.
   3.  THE  FOLLOWING  ADDITIONAL  TERMS SHALL APPLY TO THE VIRTUAL POWER
 PLANT PROGRAM:
   (A) PARTICIPATING AGGREGATORS SHALL MAKE CUSTOMER PERFORMANCE DATA AND
 RELATED CUSTOMER SPECIFIC INFORMATION AVAILABLE  TO  THE  CUSTOMER  UPON
 REQUEST  FOR  VISIBILITY  INTO  DEVICE  PERFORMANCE  UNDER  THE PROGRAM.
 AGGREGATORS SHALL PROVIDE A CLEAR AND PROMINENTLY DISPLAYED STATEMENT ON
 THE APPLICATION FORM AND CUSTOMER PORTAL THAT SUCH INFORMATION IS AVAIL-
 ABLE UPON REQUEST. AGGREGATORS SHALL INCLUDE REASONABLE TERMS AND CONDI-
 TIONS FOR CUSTOMERS TO  DISENROLL  FROM  THE  PROGRAM  WITHOUT  PENALTY;
 PROVIDED,  HOWEVER,  THAT  AGGREGATORS  MAY  INCLUDE REASONABLE TERMS TO
 RECOUP MONIES FROM THE CUSTOMER THAT THE AGGREGATOR IS OBLIGATED TO  PAY
 BACK  TO THE NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY OR
 OTHER ENTITIES AS A RESULT OF A CUSTOMER BREACH OF COMMITMENT.
   (B) THE COMMISSION MAY ADOPT OTHER REASONABLE REQUIREMENTS FOR PARTIC-
 IPATION CONSISTENT WITH THIS SUBDIVISION; PROVIDED, HOWEVER, THAT COLLA-
 TERAL OR OTHER FINANCIAL COMMITMENTS FROM AGGREGATORS OR DIRECT  PARTIC-
 IPANTS SHALL NOT BE REQUIRED AS A CONDITION FOR PARTICIPATION.
   (C)  UTILITY-OWNED  DISTRIBUTED ENERGY RESOURCES SHALL NOT BE ELIGIBLE
 TO PARTICIPATE IN THE PROGRAM. UTILITIES AND UTILITY AFFILIATES MAY  NOT
 BE AGGREGATORS.
   (D)  UTILITIES  SHALL  PROVIDE  NON-DISCRIMINATORY  ACCESS TO CUSTOMER
 DATA, HOSTING CAPACITY DATA, AND OTHER  GRID  DATA  TO  FACILITATE:  (I)
 PROGRAM ENROLLMENT; (II) IDENTIFICATION OF GRID SUPPORT NEEDS; AND (III)
 OTHER  PROGRAM  PARTICIPATION  CONSIDERATIONS FOR CUSTOMERS, DISTRIBUTED
 ENERGY RESOURCE DEVELOPERS AND AGGREGATORS. NO LATER THAN ONE YEAR AFTER
 THE EFFECTIVE DATE OF THIS ARTICLE THE COMMISSION SHALL PROMULGATE RULES
 ALLOWING CUSTOMERS TIMELY DATA SHARING AND THIRD-PARTY  ACCESS  TO  GRID
 DATA,  PROVIDED  THAT  SUCH  RULES SHALL NOT PLACE UNDUE BURDENS ON SUCH
 ACCESS.
   (E) UTILITIES  MAY  ENGAGE  THIRD-PARTY  DISTRIBUTED  ENERGY  RESOURCE
 MANAGEMENT SYSTEM PROVIDERS FOR PROGRAM ADMINISTRATION AND OTHER PROGRAM
 SUPPORT.
   (F) EACH ELECTRIC CORPORATION SHALL TAKE ALL NECESSARY STEPS TO FACIL-
 ITATE  AND  STREAMLINE  THE  PROCESSES  REQUIRED FOR VIRTUAL POWER PLANT
 PARTICIPATION. SUCH EFFORTS SHALL INCLUDE, BUT NOT BE LIMITED TO, REDUC-
 ING ADMINISTRATIVE BARRIERS AND  TRANSACTION  COSTS  FOR  VIRTUAL  POWER
 PLANT  PARTICIPANTS  AND ADOPTING STANDARDIZED PROCESSES TO SIMPLIFY AND
 ENSURE TIMELY: (I) INTERCONNECTION;  (II)  DATA  SHARING  AND  AUTOMATED
 A. 10354                            9
 
 SYSTEM  INTEGRATION  WITH  THIRD-PARTY AGGREGATORS; (III) ADMINISTRATIVE
 AND LOGISTICAL COORDINATION FOR MASS-MARKET ENROLLMENT; (IV) PERFORMANCE
 VERIFICATION AND PAYMENT SETTLEMENT; AND (V) SUCH OTHER MEASURES AS  THE
 COMMISSION MAY DIRECT.
   §  242.  COST  RECOVERY.  1.  UTILITIES MAY RECOVER PRUDENTLY INCURRED
 COSTS TO FACILITATE ADMINISTRATION AND IMPLEMENTATION OF A VIRTUAL POWER
 PLANT PROGRAM ESTABLISHED PURSUANT TO THIS ARTICLE,  INCLUDING  BUT  NOT
 LIMITED  TO  DISTRIBUTED  ENERGY RESOURCE MANAGEMENT SYSTEM PROVIDER AND
 OTHER SERVICE  CONTRACT  COSTS,  OPERATIONS  AND  MAINTENANCE  EXPENSES,
 INFORMATION TECHNOLOGY COSTS, AND SUCH OTHER COSTS, EXPENSES AND INVEST-
 MENTS THE COMMISSION FINDS NECESSARY AND PRUDENT FOR THE DEVELOPMENT AND
 IMPLEMENTATION OF THE PROGRAM.
   2.  UTILITIES MAY RECOVER THE COST OF PROGRAM PAYMENTS MADE TO PARTIC-
 IPANTS THROUGH COST RECOVERY MECHANISMS APPROVED BY THE COMMISSION.
   3. THE COMMISSION MAY, AT ITS DISCRETION, ALLOW A REASONABLE  RATE  OF
 RETURN  ON COSTS APPROVED PURSUANT TO THIS SECTION. THE COMMISSION SHALL
 TAKE ANY SUCH ALLOWANCE INTO ACCOUNT  WHEN  DEVELOPING  THE  PERFORMANCE
 INCENTIVE  STRUCTURE PURSUANT TO SECTION TWO HUNDRED FORTY-THREE OF THIS
 ARTICLE.
   § 243. PROGRAM TARGETS AND PERFORMANCE  INCENTIVE  MECHANISMS.  1.  NO
 LATER  THAN  ONE  YEAR  AFTER  THE  EFFECTIVE  DATE OF THIS ARTICLE, THE
 COMMISSION SHALL, AFTER  NOTICE  AND  OPPORTUNITY  FOR  PUBLIC  COMMENT,
 ESTABLISH  SYSTEM  PEAK LOAD REDUCTION TARGETS AND PERFORMANCE INCENTIVE
 MECHANISMS FOR A VIRTUAL POWER PLANT PROGRAM FOR EACH UTILITY AND  GUID-
 ANCE  TO  ENSURE  ROBUST  INITIAL  PARTICIPANT  ENGAGEMENT AND GROWTH OF
 VIRTUAL POWER PLANT PROGRAMS. EACH SUCH TARGET SHALL: (A) BE ESTABLISHED
 FOR A MINIMUM PERIOD OF TEN YEARS; (B) INCLUDE INCREASING ANNUAL  BENCH-
 MARKS;  AND (C) BE STRUCTURED AS A PERCENTAGE OF A UTILITY SYSTEM'S PEAK
 DEMAND TO ENSURE THE PROGRAM SCALES DYNAMICALLY WITH LOAD GROWTH.
   2. THE COMMISSION SHALL ADOPT  PERFORMANCE  INCENTIVE  MECHANISMS  FOR
 ACHIEVING  OR  EXCEEDING  THE  TARGETS  ESTABLISHED FOR EACH YEAR OF THE
 PERFORMANCE PERIOD. THE COMMISSION MAY INCLUDE AS PART OF  THE  PERFORM-
 ANCE INCENTIVE MECHANISM: (A) PERFORMANCE METRICS; (B) PUBLICLY-ACCESSI-
 BLE DATA DASHBOARDS, SCORECARDS, AND OTHER TRACKING TOOLS; (C) FINANCIAL
 INCENTIVES  AND  FINANCIAL  PENALTIES  FOR  FAILURE  TO MEET PERFORMANCE
 TARGETS; AND (D) SUCH OTHER MECHANISMS APPROPRIATE TO TRACK  PERFORMANCE
 AND  CREATE  FINANCIAL  INCENTIVE  STRUCTURES TO MOTIVATE THE UTILITY TO
 ACHIEVE PERFORMANCE TARGETS.
   3. THE COMMISSION SHALL DEVELOP PROGRAM  PERFORMANCE  INCENTIVE  MECH-
 ANISMS FOR ADDITIONAL GRID SERVICES AS THE COMMISSION DEEMS APPROPRIATE.
   §  244.  REPORTING. EACH UTILITY SHALL FILE AN ANNUAL REPORT AT A DATE
 DETERMINED BY THE COMMISSION THAT SHALL INCLUDE, AT MINIMUM:
   1. THE TOTAL PARTICIPANTS ENROLLED IN EACH VIRTUAL POWER PLANT PROGRAM
 RIDER BROKEN OUT BY TECHNOLOGY TYPE, CUSTOMER CLASS, AND AGGREGATOR  VS.
 DIRECT  PARTICIPANTS FOR EACH GRID SERVICE OFFERED IN THE PRIOR CALENDAR
 YEAR;
   2. ESTIMATED COST REDUCTIONS AS A RESULT OF THE  VIRTUAL  POWER  PLANT
 PROGRAM AND HOW SUCH REDUCTIONS ARE REFLECTED IN CUSTOMER BILL SAVINGS;
   3.  RECOMMENDATIONS  TO  INCREASE  PARTICIPATION  IN THE VIRTUAL POWER
 PLANT PROGRAM; AND
   4. SUCH OTHER INFORMATION AS THE COMMISSION MAY REQUIRE.
   § 4. This act shall take effect immediately.