Delivering enhanced customer value is one of the primary goals of New York State’s Reforming the Energy Vision (REV). Through REV, the State’s investor-owned utilities (IOUs) have been testing innovative technologies and are focused on business models where utilities and market partners can collaborate to advance customer value.
REV Connect, New York State’s initiative to accelerate the adoption of REV technologies and business models, worked with New York IOUs to gain insight into their 2018 priorities and identified four potential key trends for the year.
Trend 1. Electrification, storage, and load shifting will be big innovation opportunity areas.
In parts of the Central Hudson utility’s region, natural gas is difficult to deliver. By pursuing electrification (heating and electric vehicles (EV)) and driving geothermal adoption, Central Hudson hopes to deliver natural gas alternatives at competitive prices through their REV initiatives. Additionally, the company is researching a unique EV business model where it can use public channels like community groups to build customer awareness.
Similarly, electrification is a corporate priority for National Grid. The company filed requests with the Public Service Commission for support to expand EV infrastructure and education in multiple states.
In Ithaca, NYSEG is pursuing an energy storage demo within the Energy Smart Community ecosystem to leverage investments and data that exist there. Additionally, under parent company Avangrid, NYSEG and RG&E are looking to aggregate distributed energy resources (DER) and storage solutions to see what grid-edge resources may be called upon for demand management. Integrating energy storage into their system is a similar priority for Orange and Rockland Utilities.
Trend 2. A concerted effort will be made to bring REV thinking to natural gas.
In New York City, Con Edison will be launching a gas peak demand management program. There will be several pieces to this program that will help Con Edison bring a REV-like approach to its gas business. Notably, Con Edison expects to issue an RFI mid-2018 to request new business model approaches for commercially proven technologies to help manage gas peak demand, such as ground-source heat pumps and cold-climate air-source heat pumps. Solutions providers are invited to work with REV Connect to refine their business cases and respond to the RFI. In addition, there are concurrent gas peak reduction efforts, such as the RFP already issued for non-pipe solutions and expanding the company’s existing energy efficiency programs.
Trend 3. For REV opportunity areas that have already yielded preliminary results, IOUs are actively looking for business model refinements.
National Grid is researching ways to better serve specific customer segments, including low- to moderate-income customers and small to medium businesses. It will give customers a more targeted opportunity to manage energy affordability while improving grid efficiency and resiliency in a way that makes economic sense for the company.
Other utilities are focusing more on refining tools and linkages. Central Hudson is looking to expand around the existing CenHub digital platform. More specifically, it is exploring ways to use customers feedback in order to provide effective recommendations and new incentives. For example, by working with ESCOs or community distributed generation, Central Hudson may become a one-stop shop where customers can get side-by-side comparisons and personalized advice.
Trend 4. Pricing model innovation will be growing in importance, across all aspects of the evolving IOU business.
Although relatively new, the need for EV charging stations is growing. NYSEG is partnering with Cornell University to investigate how to create EV charging pricing models that effectively support both customers and the network.
National Grid, on the other hand, is looking for new ways to tackle energy efficiency. Utility supported energy efficiency initiatives are currently funded through system benefit charges, but opportunities may exist for new pay-for-performance models where the market finances efficiency upgrades. National Grid is testing whether energy efficiency can be self-funded and generate a healthy return on investment.
This year is proving to be the time when the IOUs’ efforts to implement REV offer solutions providers a great business opportunity. Visit nyrevconnect.com to learn more on how to take part in this emerging ecosystem and submit innovative business model ideas.