EDITOR’S NOTE: Audrey Zibelman, the chair of the New York State Public Service Commission, is helping launch a revolution in the delivery of energy and energy services in her state. She recently responded to questions from The Energy Times. And she will explore her state’s Reforming the Energy Vision – REV – initiative when she keynotes the first Energy Times Executive Briefing in Washington.
Energy Times: What will be the main changes in the utility business model in the next decade?
Zibelman: There will be much greater emphasis on dynamic load management. There will be less reliance on infrastructure development for earning growth. Earnings growth will come from performance management of market platform.
Energy Times: How hard will it be for utilities and energy companies to pivot and change their culture to deal with change?
Zibelman: In the modern economy, the goals of reliable, affordable and clean electric service will not change; but the methods of achieving them must. REV is both an opportunity to improve greatly on the status quo, and a response to a convergence of trends that make business as usual unsustainable in the long run. New York utilities support the New York REV initiative and have been active participants in the process to reform the electric system.
Energy Times: How important will energy efficiency be going forward?
Zibelman: The draft New York State Energy Plan calls for transformative changes in New York’s energy systems, including a 50 percent reduction of the intensity of carbon emissions in the energy sector by 2030, putting the state onto a trajectory for achieving an 80 percent reduction in total emission by 2050. While New York’s achievements in energy efficiency have been significant, over 3.25 gigawatt-hours and 8.2 million decatherms through the first quarter of 2014, in order to meet state and federal greenhouse gas emission reduction goals, greater investment is needed. This investment cannot be supplied by ratepayers alone, but will depend upon the mobilization of private capital and the transformation of the state’s energy market. The REV initiative will change the way utilities view energy efficiency and renewable energy activities, making them a core component of a utilities operations. We need to have more energy efficiency going forward than we have in our current targets. More carbon reduction goals through energy efficiency and clean power development will be required to ensure grid reliability and resiliency while enhancing the value of the system for consumers.
Energy Times: What is the best way to motivate energy users to become more efficient in their energy use?
Zibelman: Need to take more market-oriented approach to energy efficiency. We need to focus efforts more in bringing energy efficiency technologies into widespread market acceptance with a market transformation approach to energy efficiency.
Energy Times: What energy policies are needed most to change the electric sector?
Zibelman: A mandate to ensure safe and adequate service at just and reasonable rates, coupled with the statutory charge to promote efficient planning and use of resources. compels further regulatory action to fulfill the state’s energy needs. We need to integrate customer-side resources into system planning and operations and animate markets to accomplish this. Utility business models need to change and be oriented towards achieving these objectives.