S T A T E O F N E W Y O R K
________________________________________________________________________
10354--B
I N A S S E M B L Y
February 26, 2026
___________
Introduced by M. of A. KELLES, GALLAGHER, SHIMSKY, LEVENBERG, SIMON,
DINOWITZ, BURDICK, SHRESTHA, OTIS -- read once and referred to the
Committee on Energy -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee -- reported and
referred to the Committee on Ways and Means -- committee discharged,
bill amended, ordered reprinted as amended and recommitted to said
committee
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.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14809-09-6
A. 10354--B 2
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.
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 A UTILI-
TY'S VIRTUAL POWER PLANT PROGRAM. AN AGGREGATOR SHALL NOT BE CONSIDERED
AN ELECTRIC 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.
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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
CUSTOMER LOAD SUPPLIED BY A UTILITY, GENERATING ELECTRICITY, STORING
ELECTRICITY, DISCHARGING ELECTRICITY TO SUPPLY CUSTOMER ENERGY NEEDS OR
EXPORTING ELECTRICITY 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 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-EDGE DISTRIBUTED ENERGY MANAGEMENT SYSTEM" MEANS A THIRD-
PARTY SOFTWARE PLATFORM CAPABLE OF COMMUNICATING, OPTIMIZING AND FACILI-
TATING THE PARTICIPATION OF BEHIND-THE-METER DISTRIBUTED ENERGY
RESOURCES TO PROVIDE GRID SERVICES.
15. "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.
16. "GRID SERVICE" MEANS THOSE SERVICES IDENTIFIED IN PARAGRAPH (A) OF
SUBDIVISION ONE OF SECTION TWO HUNDRED FORTY-ONE OF THIS ARTICLE.
17. "LOCATIONAL SYSTEM RELIEF VALUE" MEANS THE MONETARY VALUE OF
AVOIDED DISTRIBUTION COSTS IN SPECIFIC GEOGRAPHIC LOCATIONS.
18. "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.
19. "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.
20. "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.
21. "PARTICIPANT" MEANS AN AGGREGATOR OR A DIRECT PARTICIPANT.
22. "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.
23. "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.
24. "SMALL COMMERCIAL CUSTOMER" MEANS A NON-RESIDENTIAL CUSTOMER OF A
UTILITY WITH AN ONSITE BEHIND-THE-METER DISTRIBUTED ENERGY RESOURCE WITH
A RATED CAPACITY OF SEVEN HUNDRED FIFTY KILOWATTS OF ALTERNATING CURRENT
OR LOWER.
25. "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.
A. 10354--B 4
26. "UTILITY" MEANS AN ELECTRIC CORPORATION AS DEFINED IN SECTION TWO
OF THIS CHAPTER.
27. "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.
28. "VALUE OF DISTRIBUTED ENERGY RESOURCES" MEANS A STRUCTURED FRAME-
WORK FOR DETERMINING THE COMPONENT VALUES OF DISTRIBUTED ENERGY
RESOURCES ESTABLISHED BY THE COMMISSION.
29. "VIRTUAL POWER PLANT" MEANS AN AGGREGATION OF DISTRIBUTED ENERGY
RESOURCES OPERATED IN COORDINATION TO PROVIDE ONE OR MORE GRID SERVICES.
30. "VIRTUAL POWER PLANT PROGRAM TARIFF" OR "TARIFF" MEANS THE COMMIS-
SION APPROVED STANDARDIZED TERMS AND CONDITIONS, INCLUDING FORMAL PRIC-
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,
AND 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;
A. 10354--B 5
(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 MAY BE INCORPORATED INTO EXISTING
PROGRAMS FOR RESIDENTIAL CUSTOMERS OR AS NEW PROGRAMS FOR SUCH CUSTOM-
ERS, AND WHICH SHALL INCLUDE:
(I) THE MINIMUM AND MAXIMUM NUMBERS OF GRID EVENTS THE UTILITY MAY
CALL;
(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) CUSTOMER PROTECTIONS FOR DIRECT PARTICIPANTS AND CUSTOMERS
PARTICIPATING THROUGH AN AGGREGATOR; AND
(IX) 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, IF NOT PART OF THE INITIAL FILING
PURSUANT TO THIS SUBDIVISION. THE PROVISIONS AND TIMEFRAMES FOR COMMIS-
SION APPROVALS AND FOR IMPLEMENTATION PROVIDED IN PARAGRAPH (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.
A. 10354--B 6
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, RECEIVE PROGRAM PAYMENTS DIRECTLY FROM THE
UTILITY, AND OTHER CUSTOMER PROTECTIONS DETERMINED BY THE COMMISSION.
(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.
(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) 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, OR ANY SUCCESSOR PROCEEDING, FOR EACH UTILITY.
(II) WHERE APPLICABLE, THE COMMISSION SHALL APPROVE PERFORMANCE
PAYMENT RATES FOR RESOURCES LOCATED IN AREAS DESIGNATED AS A LOCATIONAL
SYSTEM RELIEF VALUE AREA 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, 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 COMPONENT 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 COMPONENT FOR ESTAB-
LISHING THE SYSTEM PEAK LOAD REDUCTION 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 UTILI-
TY'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 PERCENT OF A COMPANY'S SERVICE AREAS FOR NO LESS THAN FIVE
YEARS FROM THE EFFECTIVE DATE OF THIS ARTICLE.
(V) FOR A PERIOD OF NO LESS THAN FOUR YEARS FROM THE EFFECTIVE DATE OF
THIS ARTICLE, THE CAPACITY VALUE FOR ESTABLISHING THE SYSTEM PEAK LOAD
REDUCTION SERVICE PERFORMANCE PAYMENT RATE SHALL BE CALCULATED AS THE
AVERAGE MARKET CLEARING PRICE ACROSS THE UTILITY TERRITORY FOR THE PRIOR
CALENDAR YEAR. AFTER SUCH FOUR-YEAR PERIOD, THE COMMISSION MAY CONTINUE
TO USE THIS METHOD OR ADOPT AN ALTERNATIVE METHODOLOGY TO CALCULATE THE
CAPACITY VALUE COMPONENT.
(VI) THE COMMISSION SHALL UTILIZE THE DEMAND REDUCTION VALUE, LOCA-
TIONAL SYSTEM RELIEF VALUE, AND OTHER VALUES CALCULATED PURSUANT TO THE
COMMISSION'S VALUE OF DISTRIBUTED ENERGY RESOURCES PROCEEDING, OR ANY
SUCCESSOR PROCEEDING, AND SUCH OTHER RELATED VALUATION CONSIDERATIONS TO
A. 10354--B 7
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,
PROVIDED THAT SUCH RATES REFLECT FAIR VALUE FOR THE SERVICE PROVIDED.
(VII) 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.
(VIII) 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 ANOTHER SERVICE.
(IX) CUSTOMERS SHALL HAVE THE OPTION TO RECEIVE PERFORMANCE PAYMENTS
DIRECTLY OR TO ASSIGN SUCH PAYMENTS TO A THIRD-PARTY.
(X) 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. THE UTILITY MAY PROVIDE CUSTOMERS THE OPTION TO RECEIVE
PERFORMANCE PAYMENTS AS A DIRECT BILL CREDIT, BUT SHALL NOT REQUIRE SUCH
PAYMENTS TO BE ISSUED IN SUCH MANNER.
(XI) THE COMMISSION SHALL PERIODICALLY REVIEW PERFORMANCE PAYMENT
RATES IN RELATION TO A UTILITY'S PERFORMANCE IN ACHIEVING THE PARTIC-
IPATION TARGETS ESTABLISHED IN SECTION TWO HUNDRED FORTY-THREE OF THIS
ARTICLE. THE COMMISSION MAY INCREASE THE PERFORMANCE PAYMENT RATES AS
IT DETERMINES APPROPRIATE TO ACHIEVE THE PARTICIPATION TARGETS.
(E) 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.
(F) 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.
(G) A UTILITY SHALL NOT ASSESS PENALTIES ON CUSTOMERS OR AGGREGATORS
UNDER THIS PROGRAM; PROVIDED, HOWEVER, THAT THE COMMISSION MAY APPROVE
REASONABLE MECHANISMS TO DISENROLL PARTICIPANTS FOR CONTINUED NON-PER-
FORMANCE.
A. 10354--B 8
(H) 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.
(I) NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION ONE OF THIS SECTION,
EACH UTILITY SHALL UPDATE THE PARTICIPATION RULES FOR BATTERY STORAGE
RESOURCES TO PARTICIPATE IN THE DIRECT LOAD CONTROL PROGRAM APPROVED BY
THE COMMISSION IN THE COMMISSION PROCEEDING TO DEVELOP DYNAMIC LOAD
MANAGEMENT PROGRAMS, OR ANY SUCCESSOR PROCEEDING. SUCH REVISIONS TO THE
DIRECT LOAD CONTROL PROGRAM SHALL BE MADE TO COMPLY WITH THE DIRECTIVES
SET FORTH IN THIS SUBDIVISION AS APPLICABLE TO BATTERIES IN TIME TO BE
EFFECTIVE FOR THE TWO THOUSAND TWENTY-SEVEN PROGRAM YEAR. SUCH REVISIONS
TO THE DIRECT LOAD CONTROL PROGRAMS MAY OCCUR THROUGH THE PROCESS
CURRENTLY ADMINISTERED BY THE COMMISSION TO REVIEW AND APPROVE CHANGES
PROPOSED BY EACH UTILITY IN ITS ANNUAL DYNAMIC LOAD MANAGEMENT PROGRAM
REPORT FILED IN THE COMMISSION'S PROCEEDING TO DEVELOP DYNAMIC LOAD
MANAGEMENT PROGRAMS, OR AS THE COMMISSION MAY OTHERWISE DIRECT.
3. THE FOLLOWING ADDITIONAL TERMS SHALL APPLY TO THE VIRTUAL POWER
PLANT PROGRAM:
(A) PARTICIPATING AGGREGATORS SHALL: (I) MAKE CUSTOMER PERFORMANCE
DATA AND RELATED CUSTOMER SPECIFIC INFORMATION AVAILABLE TO THE CUSTOMER
UPON REQUEST FOR VISIBILITY INTO DEVICE PERFORMANCE UNDER THE PROGRAM;
(II) PROVIDE A CLEAR AND PROMINENTLY DISPLAYED STATEMENT ON THE APPLICA-
TION FORM AND CUSTOMER PORTAL THAT SUCH INFORMATION IS AVAILABLE UPON
REQUEST AND DISCLOSING THAT THE OPERATION, POWER CONSUMPTION, OR POWER
DISCHARGE OF THE CUSTOMER'S ENROLLED DEVICES MAY BE REMOTELY ADJUSTED,
CURTAILED, OR DISPATCHED BY THE AGGREGATOR DURING GRID EVENTS, SUBJECT
TO THE CUSTOMER'S RIGHT TO PHYSICALLY OR DIGITALLY OVERRIDE SUCH ADJUST-
MENTS; (III) INCLUDE REASONABLE TERMS AND CONDITIONS FOR CUSTOMERS TO
DISENROLL FROM THE PROGRAM WITHOUT PENALTY; (IV) NOT SELL, TRADE, OR
OTHERWISE PROVIDE CUSTOMER DATA RELATED TO PARTICIPATION IN A VIRTUAL
POWER PLANT PROGRAM, EXCEPT AS AUTHORIZED BY THIS ARTICLE, AND WITHOUT
THE WRITTEN CONSENT OF SUCH CUSTOMER; AND (V) ESTABLISH ROBUST PROCE-
DURES AND PRACTICES TO PROTECT CUSTOMER DATA.
(B) THE COMMISSION SHALL ADOPT OTHER REASONABLE REQUIREMENTS FOR
PARTICIPATION CONSISTENT WITH THIS SUBDIVISION; PROVIDED, HOWEVER, THAT
COLLATERAL OR OTHER FINANCIAL COMMITMENTS FROM AGGREGATORS OR DIRECT
PARTICIPANTS 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
A. 10354--B 9
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, AS NECES-
SARY, TO GRID DATA.
(E) UTILITIES MAY, UPON REVIEW BY AND WITH THE CONSENT OF THE COMMIS-
SION, ENGAGE THIRD-PARTY GRID-EDGE DISTRIBUTED ENERGY RESOURCE MANAGE-
MENT SYSTEM PROVIDERS FOR PROGRAM ADMINISTRATION AND OTHER PROGRAM
SUPPORT, SUCH AS FACILITATING THE PARTICIPATION OF AGGREGATORS AND THE
ENROLLMENT AND PARTICIPATION OF DIRECT PARTICIPANTS.
(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
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.
(G) (I) PRIOR TO ENROLLMENT WITH AN AGGREGATOR, EACH CUSTOMER SHALL
RECEIVE INFORMATION IN PLAIN LANGUAGE, WHICH SHALL INCLUDE: (1) THE
RIGHTS OF CUSTOMERS UNDER THE PROGRAM; (2) HOW TO DISENROLL OR TEMPORAR-
ILY SUSPEND PARTICIPATION IN THE PROGRAM; AND (3) EXAMPLES OF WHEN AN
AGGREGATOR MAY CONTROL THE CUSTOMER'S DEVICE TO PROVIDE THE GRID SERVICE
TO THE UTILITY UNDER THE PROGRAM.
(II) SUCH INFORMATION SHALL ALSO BE MADE AVAILABLE ON THE DEPARTMENT'S
WEBSITE AS WELL AS EACH PARTICIPATING UTILITY'S WEBSITE.
§ 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, AS DETERMINED BY THE
COMMISSION, INCLUDING BUT NOT LIMITED TO GRID-EDGE DISTRIBUTED ENERGY
RESOURCE MANAGEMENT SYSTEM PROVIDER AND OTHER SERVICE CONTRACT COSTS,
OPERATIONS AND MAINTENANCE EXPENSES, INFORMATION TECHNOLOGY COSTS, AND
SUCH OTHER COSTS, EXPENSES AND INVESTMENTS THE COMMISSION FINDS NECES-
SARY 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.
§ 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.
A. 10354--B 10
3. THE COMMISSION SHALL DEVELOP PROGRAM PERFORMANCE INCENTIVE MECH-
ANISMS FOR ADDITIONAL GRID SERVICES AS THE COMMISSION DEEMS APPROPRIATE.
4. THE COMMISSION SHALL DESIGN THE VIRTUAL POWER PLANT PROGRAM IN A
MANNER TO PROVIDE SUBSTANTIAL BENEFITS FOR DISADVANTAGED COMMUNITIES,
WHICH SHALL INCLUDE CONSIDERATION OF PROPOSALS TO DEPLOY VIRTUAL POWER
PLANTS IN ORDER TO REDUCE THE USAGE OF COMBUSTION-POWERED PEAKING FACIL-
ITIES LOCATED IN OR NEAR DISADVANTAGED COMMUNITIES; FOR LOW OR MODERATE
INCOME END-USE CONSUMERS; AND FOR MAXIMUM CONSUMER COST REDUCTIONS AT A
REASONABLE COST.
§ 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.