New Thinking: Distribution Service Providers

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on Apr 15, 16 • posted by

New Thinking: Distribution Service Providers

Distribution Service Providers – an Update

15th April 2016 (slide pack updated December 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 Dec 2017



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