New York latest example of shift to dynamic energy pricing

New York’s SHR effort “is part of a larger push nationwide” to increase the efficiency of the electric grid by assigning appropriate value to the contributions by DERs, including the ability of retail customers to generate power and to reduce their energy demand in response to price signals, said Brian Buckley, senior policy associate at Northeast Energy Efficiency Partnerships (NEEP), a regional non-profit group that promotes expanded energy efficiency and “market transformation” in the Mid-Atlantic states and New England.


Buckley said that for the past several years many of the nation’s power markets have been using locational marginal pricing (LMP) to give proper value to power fed into the grid by utility-scale generators. Under LMP, the price of energy is location-sensitive, and is equivalent to the cost of supplying incremental load to a particular location on the grid.

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