Transcript Policy Overview - National Town Meeting on Demand Response

Policy Overview
Dan Delurey
National Town Meeting on Demand
Response and Smart Grid
Washington, DC
July 13-14, 2009
Policy Developments
2005 -2008
www.demandresponsecommittee.org
DR/SG Policy Report
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Prepared for National Council on Electricity
Policy, an umbrella group for:
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National
National
National
National
National
Assn. Reg. Utility Comm. (NARUC)
Governors Association (NGA)
Council of State Legislatures (NCSL)
Assn. of State Energy Officials (NASEO)
Assn. of Clean Air Agencies (NACAA)
Covers
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EPACT 2005
EISA 2007
FERC
DOE
State-by-State Action
DR/SG Policy Report
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Quick Synopsis
• EPACT 2005
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States took it seriously (if you look at the forest
and not the trees…..)
• EISA 2007
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Smart Grid language being used for
definitional
purposes elsewhere
Interoperability provision is being seriously
implemented
Smart Grid grants serving as the vehicle
necessary to use stimulus funds
DR Potential Assessment and Action Plan
State Activity 2005-2008
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35
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18
10
38
32
did regulatory policy on DR
did legislative policy on DR
did regulatory policy on SG/SM
did legislative policy on SG/SM
initiated action on EPACT 1252
completed action on EPACT 1252
TARP
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Accelerated Depreciation for Smart Meters
and some Smart Grid technologies
• But only moved down to 10 years – not
which was the target to make it like
other high tech items purposes
• Took five years from introduction to
passage
5,
ARRA
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EISA Smart Grid Grants provided the vehicle
Changes made to let them work for stimulus
purposes
Language from EISA Smart Grid Title used for
eligibility and screening purposes
$4.4 Billion for General Smart Grid
Investment Grants
$3+ Billion in money actually going out
the
door
Significant sums for “energy efficiency” to
states
HR 2454 – House Energy and Climate
Change Bill (a.k.a. the American Clean
Energy and Security Act – ACES)
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Energy and Climate in One Bill
• Passed House by Slim Margin
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Smart Grid Subtitle
• Smart Grid and Energy Star
• Smart Grid and Peak Reduction
• Smart Grid and Energy Efficiency Education
and Communications
HR 2454 - The Smart Grid Subtitle
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Sec 141: Definitions
Sec 142: Smart Grid in Energy Star
Sec 143: Smart Grid on Energy Guide
Labels
Sec 144: Peak Demand Reduction Goals
Sec 145: Energy Efficiency Public
Information Program to
include Smart Grid
Sec 146: Inclusion of Smart Grid in
Appliance Rebate Program
Mgr’s Amt.: Best in Class Appliance ranking
HR 2454 – Energy Star
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Section 142
• Assess Cost-effectiveness of integration of
smart grid into products (benefits vs cost of
smart grid increment)
• Scenario assessment of “what if” smart grid
technology were embedded and utilized
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Section 143
• FTC Rulemaking on smart grid info on
EnergyGuide label
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Section 145
• Smart Appliances qualify under efficiency rebate
programs
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Manager’s amendment
• Best of the best, graded A-F
HR 2454 – Sec. 144 Peak Reduction
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Establishes a process for load-serving
entities to establish “goals”
Two stages of goals, with specific
percentages and baselines to be
worked out
Use FERC DR Assessment as a resource
Compliance through empirical
measurement or demonstration of DR
capability and testing
Senate Energy Bill
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Reported out of Senate Energy
Committee
Energy-only
• Climate Bill is responsibility of
Environment Committee
• Bills expected to be merged on floor.
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Peak Reduction Goals
• Similar to House, but focus in Senate is
on improvement of system load factor
Senate - The American Clean Energy and
Leadership Act of 2009 (ACELA)
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Subtitle D—Electric Grid
• Sec. 295. National electric system
efficiency and peak demand reduction
goal. Similar to House only specific
focus on system load factor
• Sec. 296. Uniform national standards
for interconnection of certain small
power production facilities.
State Peak Reduction Standards
Pennsylvania:
4.5% by 2013
Maine:
100MW of peak demand by 2020
Maryland
5% by 2011 - 10% by 2013 - 15% by 2015
Ohio
1% in 2009, plus 0.75% per year to 2018
Delaware, Virginia, California, Texas
Interoperability
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National Institute of Standards and Technology
(NIST) has the ball for now – then it goes to FERC
Framework and protocols
Data/Information interface vs devices
NIST effort
• Sees existing standards as low-hanging fruit to adopt
• Not your usual standard process in terms of time and
effort
 White House call to action
 Workshops pulling in 4-600 parties to roll up sleeves
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Smart Grid Grants proceeding ahead of NIST but
with a heavy nod to the NIST process and
interoperability in general
Smart Grid Grants
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Not $30+, Not $11B, it is $3B+ for
general smart grid investment grants
Heavy Reliance on EISA 07 language and
direction
Incorporation of interoperability and
cybersecurity
Diverse eligibility
• Applicants
• Kind of Projects
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Funding Opportunity Notice (FOA) issued
Notice of Intent Due
Grant Applications Due
Oversubscribed?
Cybersecurity
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Wolf Blitzer in the Situation Room?
NERC in May approves eight Revised
Cybersecurity Standards
• consisting of 40 “good housekeeping”
requirements
House and Senate Hearings and Bills
• Primarily dealing with jurisdiction
Agencies beef up
Smart Grid Grants incorporates
Federal Activity
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FERC Smart Grid Policy Statement
FERC DR Potential Assessment
DOE Advisory Council includes DR in
Resource Adequacy Report
DOE Smart Grid Grants
DOE funds to State Commissions
NIST
EPA EE Action Plan Vision Statement
included DR
State Activity
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CA DR Programs and Smart Grid OIR
MD DR Programs and RFP
Illinois Smart Grid Initiative
VA Peak Demand Reduction
ME Peak Demand Reduction
NM Smart Grid Statewide Plan
Action in multiple states to prepare
for federal Smart Grid Grants
Thank You
www.demandresponsecommittee.org
FERC Issues 2008 Assessment of Demand
Response and Advanced Metering
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FERC issued, on 12/29/08, its Staff’s third annual report
on demand response and smart metering in compliance
with EPACT 2005. The report, “2008 Assessment of
Demand Response and Advanced Metering,” was based on
a survey of utilities and demand response companies that
led to the following findings: • “Advanced metering
penetration (i.e., the ratio of advanced meters to all
installed meters) has reached about 4.7 percent for the
United States. This is a significant increase from 2006,
when advanced metering penetration was less than one
percent.” [Note: this and other numbers from the Report
are not directly comparable to the data from FERC’s 2006
Report, which was based on a prior survey. As FERC
explains in the Report, it adjusted its definition of
advanced metering to only include such metering that was
“in use”] • “Eight percent of customers in the United
States are in some kind of demand response program.” •
“There have also been large increases in customer
enrollment and the number of entities that offer demand
response programs; for example, the number of entities
offering real-time pricing increased significantly since
2006.”
Update 08.12.31
Congress Chamber of Commerce Issues
Energy-Policy Transition Plan for PresidentElect Obama and 111th
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On 11/17/08, the US Chamber of Commerce's
Institute for 21 Century Energy released its
“Transition Plan for Securing America’s Energy
Future,” an “energy policy roadmap” based on the
September 2008 blueprint that details 88 “concrete”
policy-action recommendations for President- elect
Barack Obama and the 111th Congress. In particular,
the “Transition Plan for Securing America’s Energy
Future” proposes a timeline for realizing each
proposed policy action and organizes the
recommendations around two criteria:
Including: “The Secretary of Energy should place high
priority on the implementation of the smart power
grid requirements of the Energy Independence and
Security Act of 2007. This may include specific
recommendations for state and federal policies and
other actions necessary to facilitate the transition to a
smart power grid.”
08.11.29 update
Connecticut Energy Advisory Board Issues
RFP for Demand Response to Offset Proposed
Transmission Projects
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On 11/4/08, the Connecticut Energy Advisory Board
(CEAB) issued an RFP for projects that could supplant the
two transmission projects proposed by Connecticut Light &
Power (CL&P). Both supply- and demand-side resources
may be proposed in response to the RFP, including: •
Grid-based Distributed Resources
Distributed generation
Load response resources
Emergency generators
New central station power plants
Customer-based Distributed Resources
Distributed generation
Combined heat & power/cogeneration
Load response resources
Emergency generators
Energy efficiency resources/conservation.
08.11.29 Update
ISO New England and New England Power Pool
Petition FERC for Tariff Modifications Related
to Demand Resources
 In a 10/31/08 filing, ISO New England
and the New England Power Pool
(NEPOOL) petitioned FERC to accept
tariff revisions that would eliminate the
reserve margin gross-up used to
“determine the Capacity Value of
Demand Resources under the existing
rules of the Forward Capacity Market.”
ISO New England and NEPOOL would
like FERC to eliminate the reserve
margin gross-up by 12/31/08, in time
for the 2012/2013 Capacity
Commitment Period associated with
the upcoming third Forward Capacity
Auction.
Kansas Commission Establishes Efficiency
Guidelines, Opens Door for Demand Response
Programs
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On 11/14/08, the Kansas Corporation Commission
issued a Final Order that establishes a
“comprehensive energy efficiency framework”
(Docket 08-GIMX-441-GIV). Specifically, it sets the
following: • “The Commission's policy shall be to
consider proposals from utilities for riders to recover
costs for energy efficiency programs, as discussed
above.” • “The Commission's policy shall be to
consider proposals from utilities for the decoupling
method of addressing the throughput incentive issue,
made in connection with energy efficiency programs,
as discussed above.” • “The Commission's policy
shall be to consider proposals for shared savings
performance incentive plans where tied to specific
energy efficiency programs the Commission believes
most desirable, as discussed above.” Furthermore,
the Final Order contains language that implies that
the Commission would is including demand response
programs proposed by utilities as part of efficiency
efforts, while also recognizing a difference in such
programs.
Maryland Commission Orders IOUs to File
RFPs for DR to Meet Capacity Shortfall
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As previously reported, the Maryland Public
Service Commission commenced a proceeding in
August 2008 to “investigate the process and
criteria” for having IOUs issue “gap” RFPs to
secure additional resources in effort to “avoid
potential capacity shortfalls in Maryland if
certain transmission line projects are not
competed as currently contemplated by 2011
and 2012” (Case 9149). The Commission
received comments in September 2008 and held
legislative-style hearings in October 2008. On
11/6/08, the Commission issued an Order in
which it concluded that the Mid-Atlantic region
faces a reliability gap of about 2,600 – 3,000
MW for 2011 – 2012. (Of the total gap predicted,
600 – 690 MW is attributable to Maryland.)
Furthermore, the Commission not only
determined that demand response and
distributed generation should be the primary
National Action Plan for Energy Efficiency
“Vision Document” Includes Demand
Response and Smart Metering
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As previously reported, in November 2007 the
leadership group of the National Action Plan on
Energy Efficiency (NAPEE) released a “vision
document” for realizing the five policy
objectives of the plan. This vision identified
demand response and the smart grid as areas of
focus for the NAPEE. On 11/18/08, the NAPEE
leadership group released an updated vision
document—“National Action Plan for Energy
Efficiency Vision for 2025: A Framework for
Change”—in which demand response, smart
metering, and the smart grid remain prominent.
The revised vision document lists ten
implementation goals of the NAPEE as well
means for measuring progress in achieving
them. Three goals support, directly or indirectly,
demand response, smart metering, and the
smart grid:
Update 08.11.29
New Jersey Governor Signs Bill Outlining How
Schools May Contract for Demand Response
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Governor Corzine signed
legislation in September 2008
that outlines how the state’s
boards of education and county
colleges may contract for
demand response and other
services to conserve electricity.
Read the text of the legislation
(A844) on the New Jersey
Legislature’s website.
New Jersey Commission Approves Utility
Program that Includes Programmable
Thermostats and Automated Lighting Control
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On 11/21/08, Public Service Electric & Gas
Company (PSE&G) announced that the New
Jersey Board of Public Utilities had approved its
proposed $46 million, four-year project to
reduce energy consumption and CO2 emissions
(Docket EO08060426). The project has four
components that will focus, respectively, on
residential customers, small businesses, large
businesses, and hospitals. Two of the
components include measures conducive to
demand response. First, through the residential
component, PSE&G will provide customers with
programmable thermostats. Second, the utility
will provide large businesses with integrated
lighting systems that include light-fixture
monitoring and automated controls of lighting
equipment.
Update 08.11.29
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Virginia Special Commission Issues Draft
Recommendations, Including Demand Response
and Utility Investment Incentives In December
2007, Governor Kaine established the
Governor’s Commission on Climate Change. On
11/13/08, the Governor’s Commission on
Climate Change held its ninth meeting
anddiscussed its draft recommendations for Governor
Kaine. Among the roughly 100 draft recommendations
are two that address demand response: • “Electric
utilities should pilot voluntary real-time rates to
residential and commercial customers to understand
the effect such rates would have on their cost
structure and ensure costs are not shifted between
time-of-use and other customers. After testing in
pilots, these rates should be made available to all
residential and commercial customers.”
Update 08.11.29
California Commission Opens Proceeding to
Consider Smart Grid Standards Relative to
EISA 2007 and State Policy
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The California Public Utilities
Commission issued an Order Instituting
Rulemaking (OIR) on 12/22/08 in
which it initiated a proceeding to
consider the smart grid (Rulemaking
08-12-009). Specifically, the
Commission will consider the state’s
policies for the smart grid as well as
the question of whether to adopt the
two smart grid PURPA Standards
established by the Energy
Independence & Security Act of 2007.
According to the Commission’s
summary of its intent for the
Maryland Peak-Demand Reduction Law
Update: December 2008
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There has been some recent
activity in the Maryland Public
Service Commission’s five
proceedings to ensure utility
compliance with the 15%-by-2015
peak-demand reduction target set
by the EmPOWER Maryland Energy
Efficiency Act of 2008. (While there
is a separate proceeding for
Allegheny Power, BG&E, Pepco,
Delmarva Power & Light, and
Southern Maryland Electric
New Jersey Legislature
Considering AMI Standard
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The New Jersey State Assembly is
considering new legislation that
would establish AMI standards in
addition to standards for energy
efficiency, renewable energy, and
reducing GHG emissions. The bill,
“An Act Concerning Advanced
Metering Infrastructure Standards”
(A3333), was introduced on
10/23/08 and was passed by the
Telecommunications and Utilities
Committee on 12/8/08.
Update 08.12.31
Oklahoma Commission Adopts
Rules for Demand Programs
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As previously reported, in October 2007
the Oklahoma Corporation Commission
issued a Notice of Proposed Rulemaking to
amend the Oklahoma Administrative Code
by adding a subchapter, “Demand
Programs,” that would establish rules for
utilities deploying energy efficiency and
demand response programs (Case RM
200700007; ID: 4010862). As also
previously reported, in September 2008
the Commission issued a revised set of
proposed rules after receiving comments
about its initial set of proposed rules. On
11/24/08, the Commission adopted the
proposed rules before sending them, on
12/4/08, to Governor Henry and the state
legislature for final approval.
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Virginia Commission Initiates Proceeding to
Consider PURPA Standards in EISA 2007 The
Virginia Corporation Commission initiated a
proceeding on 12/11/08 to consider whether to
adopt the four PURPA Standards created by the
Energy Independence & Security Act of 2007
(Docket PUE-2008-00112). Two of the four
PURPA Standards under consideration address
the smart grid, while one of them is about
demand response: “Consideration of Smart Grid
Investments”
“Smart Grid Information”
“Integrated Resource Planning
“Rate Design Modifications to Promote Energy
Efficiency Investments”
Update 08.12.31
Connecticut DPUC Declines Demand Response
Resources in 2008 IRP
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In a 1/16/09 Draft Decision, the
Connecticut Department of Public Utility
Control (DPUC) approved the 2008
integrated resource plan (IRP) filed by the
state’s electric distribution companies
(EDCs) and the Connecticut Energy
Advisory Board (CEAB) (Docket 08-07-01).
In so doing, however, the DPUC declined
the EDCs’ and CEAB’s recommendation to
“procure hundreds of millions of dollars
worth of new conservation and demand
response resources over the next ten
years.” The Draft Decision, furthermore,
reports that the DPUC “finds a surplus of
resources and concludes that there is no
need for additional resources at this time
or during the relevant planning horizon.”
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DOE’s Electricity Advisory Council Issues
Resource Adequacy Report, Calls for More
Demand Response
On 1/15/09, the DOE’s Electricity
Advisory Committee (EAC) issued a
report on maintaining adequate
electricity supply. Through the report,
“Keeping the Lights On in aNew World,”
the EAC addresses the trends for, drivers of,
and barriers to building
generation/transmission capacity and
deploying DSM resources. It also discusses
the country’s future electricity needs.
Finally, it recommends policies for the DOE
to “ensure reliable supplies of electricity in
the future at a reasonable cost and with due
regard for the environment.” Regarding
demand response and energy efficiency, the
report suggests: