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The New York Public Service Commission (PSC) issues a Notice Soliciting Comments on staff’s proposal on the value of Demand Reduction Value (DRV) and Locational System Relief Value or LSRV.

As previously reported, Staff Proposal on DRV and LSRV was filed on December 11, 2025.  

Specifically, staff filed a proposal recommending that Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York, Inc., New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation d/b/a National Grid, Orange and Rockland Utilities, Inc., and Rochester Gas and Electric Corporation (the Joint Utilities) make various revisions to the calculation of the Demand Reduction Value (DRV) and Locational System Relief Value (LSRV).

Excerpt from Staff Proposal:

“Staff proposes the following procedures for the calculation of DRV and LSRV on a biennial cadence contemporaneously with the filing of MCOS studies to be included with the utilities’ DSIPs. As indicated in the August 2024 MCOS Order, VDER compensation should be based on long run avoided costs. Basing LSRV and DRV on short-run costs would not be consistent with a VDER goal of substituting avoidable utility investment with DER investment and would not provide a market signal for the most cost-efficient solutions. Long-run marginal cost-based pricing is grounded in two varied but accepted objectives of regulatory economics. First, the long-run equilibrium price for a competitive industry reflects prices set at long run marginal cost. Thus, compensation based on long run marginal cost provides a price signal for the efficient entry of DER providers. Second, economically efficient rate designs produce a level of demand that would come about if prices were set equal to long-run marginal costs.10 In a natural monopoly setting, prices must not be set at the profit maximizing level where demand intersects with marginal revenue. Nor should such prices be set at the level of short run marginal costs which will not be fully compensatory. Rather, efficient rate design practices should be used to set prices which result in quantities consistent with the level of demand at which demand intersects long-run marginal costs.”

Components of the Value of Distributed Energy Resources Value Stack – The revised DRV and LSRV components would be calculated based on the Marginal Cost of Service studies that the Joint Utilities included in the Distribution System Implementation Plans that they filed on June 30, 2025.  DPS staff also proposed that the Joint Utilities file draft LSRV tariffs containing non-price terms and conditions, including dispatchability and reliability, for comment by interested entities.”

To obtain access to the Pilot Integrated Energy Data Resource, a DER supplier must be registered with the NYDPS.

Registered DER suppliers can create a user account on the Pilot Integrated Energy Data Resource.

15-E-0751
(In the Matter of the Value of Distributed Energy Resources)

See also 19-E-0283