Con Edison wants to own renewable electric generation

 

Let us back in, Con Edison says.

New York’s push to spread the use of renewable electricity is giving Con Ed an opening to argue that it should dip its toes in the power generating business regulators forced it to abandon in the 1990s.

In papers filed in the Public Service Commission’s Reforming the Energy Vision proceeding, Con Edison says consumers would gain if the state let it own rooftop solar panels and other devices that generate power at homes and businesses.

The company already designs, builds and sells solar and wind generators through a subsidiary, Con Edison Solutions.

Letting Con Edison Solutions own such installations on behalf of its customers would ease the spread of renewable technology, the company says.

Con Ed’s thinking goes like this: Solar panels, combined heat-and-power furnaces, battery storage and other distributed generating equipment is expensive. A big company like Con Edison can purchase and finance such equipment more easily than its customers. That would help homeowners and businesses put the new technology to use, and advance the state’s goal of spreading distributed generation.

Con Ed’s thinking is in line with how solar is usually sold to consumers. Companies such as Solar City, Sunrun,  and Sungevity often retain ownership of the residential rooftop panels they install, and lease them to homeowners.

Con Edison

Solar light poles at East River State Park in Brooklyn

Letting Con Ed Solutions into the business of owning rooftop solar and other distributed generation will give consumers another choice, the company argues. “Customers will benefit from a variety of options and energy choices.  Both regulated and competitive entities will play a role,” Con Ed said in a statement.

Con Ed isn’t looking to get back into the business of running giant fossil fuel and nuclear power plants. When the Public Service Commission deregulated electric markets in the mid-1990s, it ordered Con Ed and other utilities to sell off their big generators. That’s why Con Ed sold Indian Point to Entergy in 2001, and why in 1999 the company sold the famous “Big Allie” generator and other equipment in the Ravenswood station in Queens.

But Con Ed suggests it might like to invest in large-scale renewable generation equipment in New York. In a recent op-ed in an energy industry publication, a company official said Con Ed Solutions could own wind farms and giant solar arrays in the state.

It’s unclear what other utilities think of Con Ed’s views. But in a joint filing in the case, several utilties express hope the PSC will be flexible on the issue.

Consumers have benefitted little from the deregulation of electricity markets. Residential electricity prices are higher, and the energy service companies that were supposed to compete on price have proven no bargain.

But generator owners gained when Con Ed and other utilities were pushed out of their business. Thus they are wary of letting the utilities back in. Independent Power Producers of New York says such a move would be “a major step back from years of Commission policy supporting robust competitive electricity markets.”

State rules would give Con Ed an unfair advantage in the generating business, IPPNY says. The state sets Con Ed’s prices, and could assure that the company would not lose money generating power. IPPNY members, on the other hand, are in a competitive business, and their prices are set in the marketplace. IPPNY countered Con Ed’s arguments in its own op-ed, here.

A coalition of groups representing low-income New Yorkers is also leery of Con Ed’s thinking. It said in a PSC filing last spring that letting utilities make their own power is “short-sighted” because “it will reinforce the role of low and moderate income people as consumers only.” The coalition worries that the working groups in the Reforming the Energy Vision proceeding are “industry-heavy,” and that regular New Yorkers have too little say in how electricity markets will develop.

The generation ownership issue has been bobbing up in REV case filings for months.

PSC officials so far seem ambivalent about letting the utilities own generating equipment.

“Unrestricted utility ownership of DER [distributed energy resources] could, even if immediately successful, stifle the growth of an innovative, competitive DER market for the longer term,” says a PSC staff report issued last year.

But the PSC doesn’t want to close the door to utility ownership of distributed generation. “An absolute prohibition against utility engagement in DER would … deny the potential benefit of DER growth that is needed to develop an asset base for DER markets,” the staff report says.

How the commission will decide the matter is up in the air. The state expects most of the rules resulting from the REV proceeding will be in place sometime in 2016. REV is a big part of the Cuomo administration’s plan to generate 50 percent of the state’s electricity from renewables by 2030.

Update, August 13: Politico New York reports on the issue of utilities investing in large-scale renewables.

About Bill Sanderson

I'm a New York-based journalist, and a former reporter at the Concord Monitor in New Hampshire, the Bergen Record in New Jersey, and the New York Post. My work has appeared in The Wall Street Journal, MarketWatch.com and Politico New York. Twitter: @wpsanderson.
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