Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Load Reducer Ftm Storage topic
No spam. Unsubscribe anytime.
New Leaf Energy urges 'load‑reducer' front‑of‑meter storage to curb transmission costs
Summary
New Leaf Energy proposed a retail‑rate plus shared‑savings model for distribution‑connected, front‑of‑meter storage that would capture avoided transmission and capacity costs and finance projects without additional subsidies; EDCs raised concerns about using RNS allocations as the sole value signal.
At a Sept. 24 technical meeting of the Public Utilities Regulatory Authority, New Leaf Energy argued that distribution‑connected front‑of‑meter battery storage operated as “load reducers” could be financed under a bidirectional time‑of‑use retail rate combined with a pay‑for‑performance shared savings payment tied to avoided transmission (RNS) and capacity (ICAP) charges.
Jessica Robertson, director of policy and business development for New Leaf Energy, told PURA that standalone distribution storage projects of up to 5 MW AC that do not participate in wholesale markets could be dispatched to reduce local monthly transmission peaks and the annual ISO New England system peak. Robertson said avoided transmission cost savings—driven by projected growth in RNS charges—can be measured and monetized on a per‑meter basis and used to form a predictable, financeable shared‑savings revenue stream for developers.
Why it matters: ISO New England forecasts higher transmission costs as electrification and renewable deployment increase. New Leaf presented modeling (citing ISO NE analyses) showing that reducing peak load materially lowers future transmission build needs and long‑term system costs; the company argued that a retail rate plus shared savings could mobilize storage deployment without direct subsidies.
How the load‑reducer model would work
- Retail signal: New Leaf proposed a bidirectional time‑of‑use (TOU) retail rate for charging and discharging that would encourage daily cycling and modest energy arbitrage; Robertson said the retail TOU need not be highly lucrative but should cover charging losses and enable daily dispatch behavior.
- Shared savings: The principal revenue for projects would come from a pay‑for‑performance payment tied to measured avoided RNS and ICAP charges—the utility would compare meter data from participating batteries to its share of peak charges and pay a negotiated portion of the demonstrated avoided cost to the battery owner.
- Financing: Robertson said RNS and ICAP fees are predictable enough to support project finance on that shared‑savings revenue basis; she pointed to several municipal utilities in Massachusetts where similar arrangements have been financed without additional ratepayer subsidies.
Stakeholder questions and EDC responses
- PURA staff (Molly Charles and Chris Arpin) asked about future energy price volatility, retail rate design, and meter/telemetry needs. Robertson said energy arbitrage value in ISO New England is currently limited but could increase; she emphasized that the load‑reducer construct relies primarily on transmission and capacity avoided costs, which are predictable and bankable.
- On metering and measurement, New Leaf said standard revenue metering can support the required pay‑for‑performance calculations but offered to provide more detailed technical responses if PURA staff wanted them.
- Eversource and United Illuminating expressed cautious interest but raised operational concerns. Eversource argued that tying compensation to a single monthly hour (the RNS allocation hour) could create perverse incentives—encouraging maximum discharge in that hour rather than broad operational behaviors that benefit the distribution system—and noted that RNS is an allocation methodology, not a direct measurement of transmission build costs. Eversource recommended careful program design to avoid shifting costs or creating gaming opportunities and suggested flexible interconnection, non‑wire alternatives, and performance‑based programs as complementary tools.
- New Leaf and several stakeholders responded that combining a daily TOU retail signal with shared‑savings payments for monthly/annual peaks can produce frequent beneficial dispatch while still compensating for the larger avoided transmission and capacity value streams.
State experience and next steps
Robertson described municipal utility projects in Massachusetts and pending proposals in Rhode Island and Massachusetts that are exploring similar retail rate plus shared‑savings approaches. She recommended PURA consider starting with a bidirectional retail TOU rate for distribution storage and designing a transparent measurement framework for avoided transmission and capacity payments.
No policy decision was adopted at the meeting. PURA staff and parties flagged the proposal for further technical review; EDCs and New Leaf agreed that working groups (interconnection, metering, and program design) would be appropriate next steps to refine design details and identify potential legislative or regulatory authority requirements.
