New York Reforming Its Energy System

"'We have always done it this way' is not a safe course of action any more," says Richard Kauffman, the designer-in-chief of New York’s revolutionary Reforming the Energy Vision (REV) model.

In a rather lengthy (but worth reading till the end) piece, he explains REV in detail.

The REV process has been underway for about three years, and its outcomes are slowly becoming apparent.

Kauffman explains that REV is driven by a number of powerful trends at play:

- The increasing costs of central station power plants, transmission and distribution assets, and at the same time, the decreasing costs of distributed solutions.

- Changing customer preferences for on-site solar, batteries, fuel cells, and on-site thermal generation such as combined heat and power.

- The need to reduce emissions and decarbonize society.

REV is also based on “three-and-a-half principles”:

1. Developing a framework for locational pricing of distributed assets, since a distributed resource will have different values depending on where it’s located.

2. Migrating away from the traditional utility rate structure, under which new infrastructure investments are put into "rate base" for which utilities receive an agreed-upon rate of return.

3. Focusing competitive markets on customers, since actors in competitive markets will fund distributed resource projects and stimulate innovation to deliver what customers actually want.

3.5. Changing the processes, such as more open source approaches to utilities, rather than regulators simply saying "we know the answer". 

Might be a difficult read but it's certainly an interesting one.