New York’s Public Service Commission has issued new rules that establish a wall between existing utility companies and renewable generation sources. The rules are intended to promote the state’s ambitious drive to reform its electricity grid and encourage the growth of distributed, decentralized renewable energy resources.
“The landmark steps New York state is taking today will reorient both the electric industry and the ratemaking process toward a consumer-centered approach that harnesses new technologies and markets,” said Audrey Zibelman, chairwoman of the PSC.
Renewable energy advocates were jubilant. “This ruling is a step toward providing the certainty needed for future development of grid-scale renewables — like wind power and hydropower — as the state’s current program expires this year,” said Anne Reynolds, executive director of the Alliance for Clean Energy New York. “Industry has been awaiting a signal that New York will have a long-term renewables policy to replace it.”
The states two major utilities, Consolidated Edison and National Grid, have not commented on the new rules.
Small renewable energy companies fear that without such rules in place, the big utilities will end up owning a large slice of the renewable resources, which will limit competition and slow the development of distributed renewable networks. They say utility companies have been slow to accept renewable energy and, in some cases, have actively campaigned against wind and solar energy initiatives.
Take for example the situation in Arizona, where the state’s largest utility, the Salt River Project, has announced recently it will add a surcharge of $50 a month to the bill of any customer with a home solar system.
That surcharge is being vigorously opposed by SolarCity, the largest installer of rooftop solar systems in America. Last week, it notified SRP that it is prepared to file suit in the matter. In a letter to SRP, SolarCity CEO Lyndon Rive says the new price plan is “unsupportable by any economic analysis” and that the “fundamental purpose of the plan is to undermine solar leasing companies in SPR territory.”
On the other hand, the State of California is encouraging its utility companies to develop renewable assets. It recently gave San Diego Gas & Electric a $5,000,000 grant to expand one of its experimental microgrids and tie it into the larger NRG electrical grid.
The New York PSC said when announcing the new rules, “By restricting utilities from owning local power generation and other energy resources, customers will benefit from a more competitive market, with utilities working and partnering with other companies and service providers.” A big part of the plan is to get customers more engaged in power demand by rolling out smart meters and providing incentives for residential users to build their own power sources to sell electrons back into the grid during peak periods.
So who is right? Are utility companies all bad guys, looking to stomp out the growing movement toward rooftop solar and renewables? Or are they willing partners in the search for clean energy to power American commercial and residential customers in the future? Is the New York approach the correct way forward or is the California model more appropriate?
These are questions that can’t be answered at present.