Several members of the S&W Energy Finance Team attended Infocast's recent NY REV Summit. Speakers ranged from utility and regulator representatives to CEOs of technology and service providers, all eager to discuss the latest in New York's ongoing Reforming the Energy Vision (REV) proceeding. Several key themes emerged during the two day event:
1. Collaboration between stakeholders to ensure a viable final rule is key. While the Department of Public Service (DPS) has, by all accounts, been running a very efficient and inclusive stakeholder feedback process (despite a lack of participation by consumer rights groups), it will not be surprising to see more divergent views emerge as details emerge and implementation becomes more imminent. Therefore, it may become increasingly difficult to keep all stakeholders in the fold.
2. Structuring the rule to avoid FERC (and other regulatory) issues is a concern. Many expect REV to serve as a template for other states going forward. It can similarly be viewed as a test case/battleground for those who stand to lose out under alternative power futures. Many speakers mentioned early-stage collaboration with the FERC to ensure that later challenges are avoided, or at least more easily overcome.
3. Technical issues need to be resolved. Several speakers noted that cyber security risks associated with giving generation responsibilities to independent entities is a very real issue that needs to be contended with. The idea of overcoming the hurdles caused by handling 'two way traffic' with antiquated metering and distribution equipment was also discussed.
4. The role of utilities - and repercussions of changing roles - need more thought. While the conceptual shift of utilities toward transmission entities has merit, challenges in the form workforce retraining/redeployment, legislatively mandated rates of return, losses of shareholder value and transfers of property all need to be addressed.
5. Reliability cannot be ignored. Even if the ultimate vision of widespread, clean distributed generation is highly desirable to many New Yorkers, many speakers noted that there would also be little tolerance for reductions in reliability along the way. This could have practical implications for the time it takes to transition from the current status quo to the new vision - and proponents may need to pragmatically accept that lead times on these changes could be measured in years rather than months or quarters.
For the latest on REV, readers can review the latest DPS white paper which was released last week. Additional background can be found in last year's "Reforming the Energy Vision" staff report. Energy Finance Report readers should also keep their eyes open for a save-the-date for S&W's own REV event on October 1st, and can contact Josh Sturtevant for more details.