Submitted by Stuart Nachmias, Vice President, Energy Policy and Regulatory Affairs, at Con Edison
When Con Edison began its “Save-A-Watt” program more than four decades ago, the company became an industry pioneer in urging customers to use less, not more, of its product.
Today, utilities routinely pay customers to lower their energy usage with efficiency upgrades, demand response, and other strategies. Such initiatives help utilities manage their systems and – when coupled with appropriate regulation – benefit all customers.
The utility of 2014 is not the utility of the early 1970s, or even of just a few years ago. And the confluence of fast-evolving technology, severe weather and growing customer sophistication ensures that the Utility of the Future will differ from today’s model.
That’s why 20 companies and organizations, including Con Edison, spent three months producing a report called “Creating a 21st Century Electricity System for New York State.”
The report offers a guide to utilities, policymakers and other stakeholders on the future of the Empire State’s electrical system.
Already, our industry is in the midst of a dramatic transformation.
More than ever, customers want simple pricing, resiliency, faster outage restoration, and more information during outages. They want clean energy options, such as energy efficiency, distributed generation and renewables. And they want simple interactive tools to manage their usage.
The working group advocates modernizing the grid to provide customers with the products and services they want.
The new grid should provide benefits to all customers, whether or not they choose to participate in programs. We must reward those that participate in programs when their participation improves reliability for everyone. Giving utilities the right incentives to reach these outcomes is critically important.
In short, the grid of the future must be highly interactive and able to accommodate more distributed resources, demand side management technologies, smart features and two-way flow of electricity. It will also need to handle additional load from electric vehicles.
At Con Edison, we have found that distributed systems can help utilities improve efficiency and manage peak demand.
We are trying to make it easier for our customers to choose distributed resources and they are responding. Our customers have completed 200 combined heat and power projects, producing 150 megawatts.
In addition, our customers have completed more than 2,000 solar projects, producing nearly 40 megawatts of clean, renewable energy.
The infrastructure upgrades to make the Utility of the Future work will require investment in systems and technology. New Yorkers will have to make decisions about cost recovery, which upgrades should be priorities, and many other issues.
Some of the new customer products and services – such as new ways for customers to communicate with their utility – could be available to all customers and covered in basic rates.
Other value-added services, such as new information services, operational services, advanced metering, and emergency generation, could be available to customers at an added cost.
The utilities’ ability to meet customer needs must be supported by a regulatory system that encourages efficient investment in all technologies, and allows customers to get the information they need to manage their usage.
The system would also provide for the long-term financial health of utilities by recognizing that the grid actually makes all of these choices happen, and that utilities must be able to continue to recover its costs.
With wise decision making and careful planning, we can create an efficient electrical system that will meet society’s needs for decades and mean a cleaner environment and greater economic prosperity.
Con Edison is a part of the conversation and plans to be a leader in it. We have appointed our own Utility of the Future team, bringing together people with the needed expertise. Our team will work with a vast network of subject matter experts from inside and outside our company.
The New York State Public Service Commission also recognizes the deliberation that needs to take place for New Yorkers to get the electrical service they need as the world changes.
The PSC recently opened its own proceeding called Reforming the Energy Vision. We commend the PSC for its vision and leadership.
Technological innovation and changes in customer needs aren’t going to slow or halt. They are going to accelerate.
Con Edison is preparing for that acceleration to ensure a brighter future for all our customers.
Stuart Nachmias is vice president, Energy Policy and Regulatory Affairs, at Con Edison in New York.