Where we are today and where we are headed

By: Paul A. DeCotis, Matthew Daly, & Jamie Mize

In 2016, West Monroe examined the common assertion that REV is too broad and moving too fast.1 As many states are undertaking similar initiatives some are progressing more expeditiously to promote REV-type objectives over others. We concluded at that time that the pace of REV was daunting, but the vision was unifying. The seemingly rapid pace and broad focus of the 16 or so related regulatory proceedings in New York were necessary to synchronize new technologies, innovations in utility operations, and utility business models. Now, however, the many and various proceedings, lack of significant progress to date, and the leadership vacuum at the Department of Public Service (DPS) and Public Service Commission (PSC) have many utility executives and participants in the proceedings wondering how this will all come together, and what will result.

Leveraging pilot success to push large-scale implementation

While REV is focusing on some necessary and complex issues, progress to date has been mixed at best. Pilot projects sponsored by utilities are moving ahead, yet the anticipated larger-scale rollout of the pilots is lacking. The absence of tangible results can be attributed in part to the early stages of the pilots and insufficient rigor and study employed to determine and promote their success. Some argue that due to the uncertainty over costs of large-scale rollouts of the pilot projects, the PSC and many elected officials, as well as large customers, are reluctant to fully support moving from pilots to large-scale implementation. In fairness, any push toward large-scale implementation of successful pilots should be justified based on the business case for implementation. The business case demonstrating the economic, environmental, and social benefits of large-scale implementation — should be presented, debated, and approved through individual utility rate cases, and not through a general approach or combination of some of the 16 REV-related proceedings. Customers both large and small should realize benefits of the REV-related initiatives with a positive net benefit. But to date, little information and data has been provided to make a compelling case for these initiatives. (On the other hand, it can be argued that cutting-edge innovations should be experimented with first, to gain experience with technology and innovations that would later inform the business case.)