Non-wires Alternatives (NWA) Incentive

  • Id
    4
  • State
    NY
  • Utility
    New York State Electric & Gas (NYSEG)
  • Applicability
    Electric
  • Emergent Topic
    DER; CC
  • Description
    The NWA incentive mechanism would align the Companies’ economic objectives with public policy promoting the integration of Distributed Energy Resources and will allow ratepayers to benefit from the Companies’ efforts to seek cost-effective alternatives to traditional electric infrastructure investments.
  • Metric
    Net benefits ($), measured as the difference in the net present value ("NPV") of the net costs and benefits of a NWA project and the traditional infrastructure project it would defer.
  • Target
    N/A
  • Incentive Type
    Upside
  • Incentive Structure
    Shared net benefits/shared savings
  • Incentive Description
    The company will establish an “Initial Incentive” equal to 30% of the present value of net benefits, at a time when the Companies have either entered into contracts with distributed energy resource (“DER”) providers for the entire NWA project portfolio, or when there is reasonable certainty on the price of the NWA project portfolio. Once the NWA Project has been fully implemented, the company will calculate the difference in NWA Project Cost, which will be equal to the initially forecasted cost of the NWA Project, less the actual cost of the NWA Project. The “Final Incentive” will equal the sum of the Initial Incentive and 50% of the difference in the NWA Project Cost. The Final Incentive is subject to a floor of $0 and a cap of 50% of the Initial Net Benefits. In the event that fewer MWs are needed to achieve the intended deferral of traditional infrastructure, the Company will only reduce the number of MWs it plans to procure if both the need for reduced MWs is shown to be a sustained downward trend over a three-year period, and the Company needs only 70% or fewer of the initially-forecasted MWs to achieve the intended deferral. In that case, the company will use a different methodology to true up its incentive.
  • Start Date
    2020
  • End Date
    2023
  • Source: Original Docket
    19-E-0378
  • Source: PUC Order
    Order Approving Electric and Gas Rate Plans in Accord with Joint Proposal, with Modifications
  • Status
    Inactive (Performance Period Concluded)
  • Additional Notes
    This PIM applied for the duration of the rate plan, which was from April 27, 2020 to April 30, 2023. The Joint Proposal established identical incentive mechanisms for NWAs and NPAs.
  • Note on Verification
    The information in this entry represents RMI analysis. The details have not yet been verified by a local stakeholder.