Distribution Service Providers – an Update
15th April 2016 (slide pack updated May 2017)
In January we produced a blog introducing the idea of Distribution Services Providers. Since then we have been discussing and thinking about the idea in more detail and the slides below help explain what a DSP does. We also ran a DSP Roundtable event in May 2016.
The slides show:
- the NY Reforming the Energy Vision to explain that DSPs are a new value proposition and become the ‘heart’ of the electricity system .
- how a DSP is the opposite of a traditional network company in relation to system optimisation and energy services.
- what the role of a traditional network utility, and the key incentives of its rate of return or capital based regulation
- the role of a DSP, and how it is primarily regulated through performance based regulation, linked to desired outcomes.
- that as a market facilitator, DSPs can undertake coordinated management control to better increase system efficiency. The DSPs are the market facilitators or managers of platforms – they are not the do-ers. The DSPs are incentivised to increase 3rd party entrants.
- the fundamental pitch of the NY REV that utilities may make more on the PBR revenue but that this should lead to reduce system costs overall and bring down , or at least hold stead, customer bills.
- the challenges and opportunities faced by energy system stakeholders – whether it be Government, regulators, small or large companies and so on.
- to what extent current regulation in NY state meets those challenges or captures those opportunities.
- how the NY REV restructuring is meant to meet those challenges or captures those opportunities.
- where DSPs fit into the IGov framework
You can download the latest slide pack here (updated May 2017): Distribution Service Providers – Update May 2017