Dyson College of Arts and Sciences

46 The short, medium and long term success of these goals is closely intertwined with the appropriate types and levels of grid investment being made. Clean energy investments can be designed and configured, so that they are resilient, that they are capable of providing ser vices that lower the operating costs of the grid and they can be located in high value areas where they can defer or avoid utility distribution expenditures. This outcome will not come about absent markets and/or other signals to direct consumers to make the right investments. The DER itself will have to include some additional capabilities, entailing an incremental cost, that won't be made unless there is a return for doing so (or a mandate). The utilities will have to markedly alter the current capabilities, including the existing network protection systems, in order to take full advantage of the use of a wide array of customer side energy assets to improve the operations of their existing grid infrastructure. Clean energy innovation will be unleashed when there is access to information to support it, an energy distribution network capable of rapidly incorporating it into operations and planning and when there are clear long term price signals upon which one can make the necessary investments. Utilities can earn a return on their investment in distribution system capital equipment. Whereas it may lower total utility system costs to leverage private investment in DER as a substitute for traditional utility investments, this substitution of private capital for utility expenditures may erode the revenues and the return of the utility business. There is likely to be a conflict between the utilities' business interests and some of the goals of the REV, in particular, those that call for leveraging private investment in DER's to enhance grid operations and lower the total ratepayer cost building and operating the distribution system. The utility prepares its capital plan, with oversight of the PSC. These investments create the platform in which DER operates. The breadth and depth of DER integration into all of distribution system operations and planning functions will be determined by these capital investment plans. The incumbent utility that operates the platform and once self-supplied all of the distribution services, some of which are now be procured in new markets, faces conflicts that may affect the speed and type of investments that it makes in this new "distribution system platform". For that reason, Pace joined with other non- utility parties in encouraging that New York establish a rigorous set of market success metrics pertaining to the development of the utility Distribution System Investment plans. A core goal of NY REV is to 'animate the markets' and integrate customer resources as tools in the planning, management and operation of the electric system. A set of metrics that progressively measure success should be considered to ensure that DERs are being more broadly utilized, monetized and placed on par with traditional utility solutions. Potential metrics include:

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