*4.2.4. Core strategy: animating business-model innovation*

All the major distribution utilities in New York support the REV vision for long-term innovation in the industry and have submitted proposals for pilot projects. Additionally, a number of utilities have began implementing "flexibility products and services" such as distributed solar PV inverters, real-time transactions, demand response, and pricing of reserves that would enable them to obtain electricity from the most flexible resources. Response to these market changes, however, depends on adaptations in the utility regulatory landscape. Nevertheless, the dependence of the modern society on a stable and reliable electricity system require that these innovations should be ongoing throughout the lifetime of the electricity grid infrastructure.

The transition from centralized to decentralized renewable electricity governance animates business-model innovations to address "death spiral" concerns and inefficient resource allocation. REV's core strategy addresses market risks in New York by increasing DER deployment, increasing transparency in utility ownership, incentivizing low-carbon electricity generation, and aligning utility profits with DER deployment [45]. However, as [36, 62] caution, these innovations must not be construed as attempts at regime preservation rather than market adaptations for fostering 'polycentric' business-model innovation. In other words, the REV docket's core strategy positions political and economic innovations of the utility landscape to optimize customer-focused operations and return on environment. For instance, the role of the ESCOs which currently provide only commodity services (e.g., energy efficiency investments) are expanded to include more classes of electricity services including consulting and analytic services to help consumers dynamically manage their energy bills.
