Transcript Demand Response

National Town Meeting on
Demand Response
Demand Response
Policy Overview
Dan Delurey
Demand Response Coordinating Committee
June 2, 2008
Demand – An Evolutionary Perspective
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Conservation
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Load Management
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Utility-oriented; IRP
Efficiency – Phase 2
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Get the same benefit with less energy
Demand Side Management
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Curtailment and Control
Efficiency – Phase 1
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Running out of oil
Beyond the end use
Efficiency Phase 3
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The Smart Age based on Demand Response
Dynamic Efficiency
Based on communications, information and prices
Systems approach: Smart Grid, Smart Homes, Smart
Appliances
Demand Response Policy – A History
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PURPA 1978
Load Control
Restructuring
FERC directives to ISOs/RTOs
RTP for large customers
Competitive metering
Default service pricing
System benefit funding
Mega-mandates (CA, Ontario)
Portfolio standards
EPACT 2005
FERC/State Action
Energy Independence Act 2007
EPACT 2005 – Smart Metering
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More than the name implied
Four main provisions,
• It is the policy of the U.S……..
• DOE Report to Congress
• FERC Report to Congress
• New PURPA Requirement
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States and other jurisdictional bodies must
investigate whether or not to provide time-based
pricing and advanced metering
Flexible compliance
All Sectors covered
Decide by August 2007
EPACT 1252 Proceedings
Status Summary
States with Open EPACT 1252 Proceedings
27
States with Closed EPACT 1252 Proceedings
12
States Deciding to Adopt EPACT 1252
2
States Deciding Not to Adopt EPACT 1252
11
States Deferring Decision to Adopt EPACT 1252
State Decisions on EPACT 1252
States
Deciding to
Adopt
Ohio
New Hampshire
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States
Deciding Not
to Adopt
Delaware
Florida
Idaho
Iowa
Kentucky
New York
Tennessee
Utah
Vermont
Virginia
West Virginia
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States
Deferring
Decision
Colorado
Maryland
Montana
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States with Open
EPACT 1252 Proceedings
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Alabama
Alaska
Arizona
Arkansas
Colorado
Delaware
District of Columbia
Georgia
Illinois
Indiana
Kansas
Louisiana
Maryland
Michigan
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Minnesota
Missouri
North Carolina
North Dakota
New Hampshire
New Mexico
Ohio
Rhode Island
South Carolina
South Dakota
Texas
Washington
Wyoming
States with Closed
EPACT 1252 Proceedings
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Florida
Idaho
Iowa
Kentucky
Montana
Nevada
New York
Tennessee
Utah
Vermont
Virginia
West Virginia
EPACT – Seeing the Forest instead of
the Trees
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Everyone has been not only made aware but
educated
DR and AMI high on the NARUC agenda
States that have issued a “technical No” have
made other moves
Utilities have begun to view things more
opportunistically
Other policy moves have been made, including in
the legislatures
A critical foundation of understanding and
discussion has been established
Maryland
• The Commission has an AMI/DSM Collaborative, whose
work includes a July 2007 report on technical standards
for smart meters and on deployment of DSM
• The Commission responded by directing, via a
September 2007 Order, utilities to file “comprehensive
energy efficiency, conservation and demand reduction
plans” that include “aggressive” peak-demand reduction
proposals.
• In April 2007, the Commission approved the plans of
Pepco, DP&L, and SMECO
• In April 2007, The Commission approved BG&E’s AMI
pilot and two demand response pilots
• In April 2008, Governor O’Malley signed two bills:
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“EmPower MD Energy Efficiency Act”: Sets efficiency and
peak-demand reduction portfolio standards; mandates
utilities to file DR plans; and directs the Commission to
consider whether smart meters are “are cost–effective in
reducing consumption and peak demand of electricity.”
Michigan
• The Commission determined that all but two of the qualifying
utilities already offered time-based rates that satisfied EPACT
1252—it then opened proceedings specific to the utilities that
didn’t. In January 2007, the Commission presented to the
Governor its “21st Century Energy Plan,” which recommends
DR and AMI. The Commission then created four working
groups to support the plan—the groups will look at DR and the
smart grid
• In June 2007, the Commission opened a proceeding to
implement the DR portion of the plan—it also formed a related
working group called the Michigan Smart Grid Collaborative,
which later was tasked with considering PHEVs vis-à-vis the
smart grid
• The Michigan Legislature is considering three bills that would
foster the deployment of demand response and would reduce
peak demand.
• The Commission determined that all but two of the qualifying
utilities already offered time-based rates that satisfied EPACT
—then opened proceedings specific to the utilities that didn’t.
New Mexico
• EPACT 1252 Proceeding opened September 2006.
Commission has held several workshops and solicited
from utilities white papers on AMI and time-based rates.
• Legislation: In February 2007, Governor Richardson
signed legislation that directs utilities to include load
management and energy efficiency programs in their
resource portfolio. It also sets a minimum threshold for
action:
 By 2014, save 5% of total 2005 retail kWh sales
 By 2020, save 10% of total 2005 retail kWh sales.
• In January 2008, the Commission opened a proceeding
to investigate what effect incentives will have to
motivate utilities to deploy energy efficiency and load
management.
New York
• Decision: Declined Adoption of EPACT 1252—
the Commission determined that it already
provides a “time-based metering and
communications standard comparable to
PURPA.”
• In August 2006, the Commission directed
utilities, in response to EPACT 1252, to file AMI
plans.
• In October 2007, the Commission solicited
comments about the plans.
• In April 2008, the Commission’s Staff held a
technical conference.
Ohio
• Decision: Adopted EPACT 1252 in March 2007 and series
of workshops held subsequently
• In May 2008, Governor Strickland signed Senate Bill
221, mandating a peak-load reduction standard:
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“Beginning in 2009, an electric distribution utility
shall implement peak demand reduction programs
designed to achieve a one per cent reduction in peak
demand in 2009 and an additional seventy-five
hundredths of one per cent reduction each year
through 2018.”
It requires the Commission to report annually
verification of peak-demand reduction
It sets state policy to “encourage innovation and
market access for…demand-side management, timedifferentiated pricing, and implementation of
advanced metering infrastructure.”
Pennsylvania
• In February 2008, the House passed a bill that
would mandate deployment of smart meters
and demand response, set peak-demand
reduction goals, and establish M&V standards.
The bill is now in the Senate.
• In March 2008, House of Representatives
passed legislation that would allocate $850
million to Governor Rendell’s Energy
Independence Fund—$270 million of it is to
provide grants and loans for DSM projects. The
bill is now in the Senate.
Virginia
• In September 2007, Governor Kaine released his “Virginia
Energy Plan,” which is to reduce the growth rate of
consumption by 40% by 2017 and to reduce GHG emission by
30% by 2025. It considers DR to be a strategy for efficiency
and conservation.
• In December 2007, the Commission reported to the Governor
& General Assembly how to reduce consumption by 10% (of
2006 levels) by 2022 via load management, DSM,
conservation, and efficiency. This report was in response to
legislation enacted in April 2007.
• In May 2008, Governor Kaine signed legislation that renews
the state’s Commission on Electric Utility Restructuring while
renaming it the “Commission on Electric Utility Regulation.” It
also tasks this Commission with educating retail electricity
consumers about demand response. The new law requires the
State Corporation Commission to convene a working group to
identify “consumer education needs” pertaining to DR, DSM,
efficiency, and conservation.
Elsewhere in Washington
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DOE
• New Advisory Committee at DOE
• Continued support to MADRI, MWDRI and NWDRI
• Other technical support
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FERC
• Individual Decisions on ISO/RTO DR
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Ancillary Services and other markets
Inclusion of Traditional Efficiency as well as DR
• Rulemaking on DR in Competitive Markets (AD07-07000)
• Technical Conferences on DR
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EPA
• Energy Star
• National Action Plan on Energy Efficiency
Energy Independence Act
Title XIII – Smart Grid
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Section 1301 – Statement of Policy
Section 1302 – System Report
Section 1303 – Advisory Committee and Task
Force
Section 1304 – Technology RD&D
Section 1305 – Interoperability Framework
Section 1306 – Federal Matching Fund
Section 1307 – State Consideration
Section 1308 – Study of Effect of Private Wires
Laws on CHP
Section 1309 – Study of Security Attributes
Section 1301 – Statement of Policy
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It is the policy….to support….which together
characterize a smart grid:
• Digital information and controls
• Dynamic optimization with cyber-security
• Distributed Resources and DG, including renwewable
energy
• Demand Response and Energy Efficiency
• Smart technologies for metering, grid communications
and distribution automation
• Smart appliances and consumer devices
• Advanced storage and peak-shaving technologies,
including PHEVs and thermal-storage A/C
• Information and control options to consumers
• Standards for communication and interoperability
• Identification and lowering of barriers
Section 1304 – Technology RD&D
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Power Grid Digital Information Technologies
• Advanced techniques for measuring peak
reductions and efficiency savings
• Investigate means for DR, DG and storage to
provide ancillary services
• WAN measurement and control including
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Data mining
Visualization
Advanced computing
Communications in a highly distributed environment
• New reliability techniques, including
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Communications network capabilities in a grid control
room environment
Section 1304 – Technology RD&D
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Power Grid Digital Information Technologies
• Identify communications networks capabilities
needed to implement advanced technologies
• Investigate feasibility of a transition to timebased and real-time pricing
• Develop algorithms for use in transmission
software applications
• Promote use of underutilized electric generation
capacity in replacement of liquid fuels in
transportation
• Interconnection protocols to enable electric
vehicles to help meet peak demand
Section 1304 – Technology RD&D
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Regional Demonstration Initiative
specifically focused on advanced
technology for power grid sensing,
communications and power flow control,
including:
• Demonstrate benefits of concentrated
investments
• Facilitate transition to advanced technologies
• Facilitate integration of advanced technologies
into existing networks
• Demonstrate protocols and standards for
measurement verification of energy and
emissions savings from DR and EE
• Investigate differences in regulation and best
practices
Section 1305 – Interoperability
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Primary responsibility given to National Institute
of Standards and Technology (NIST) of
Department of Commerce
Authorization of $5M per year from 2008 to 2012
Purposes:
• Develop framework that includes protocols and model
standards for information management to achieve
interoperability of devices and systems
• Alignment of policy, business and technology approaches
to enable all electric resources, including demand
resources to contribute to an efficient reliable electricity
network
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Input must be solicited from:
• DOE
• Smart Grid Task Force and Advisory Committee
• Stakeholders such as GWAC, IEEE and NERO
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Framework Developed shall be technologyneutral, flexible, uniform and voluntary
Section 1305 - Interoperability
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Framework shall be designed
• To incorporate all resources, both generation
and demand response and energy efficiency
• To be flexible to accommodate regional
differences and technology innovations
• To consider voluntary standards that
accommodate appliances and equipment that
are manufactured to respond to grid
emergencies and price signals via curtailment
or load shedding
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Framework shall accommodate
appropriate manufacturer lead time
Section 1305 - Interoperability
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Timetable
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NIST to begin work 60 days post enactment
Publish report on progress within 1 year
Further reports as warranted
Final report when work is judged to have been
completed or that a federal role is no longer
necessary
FERC
• If sufficient consensus reached, FERC shall
proceed to rulemaking to apply standards to
interstate transmission and regional and
wholesale markets
Section 1307 – State Considerations
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Two new “Standards” created under the
Public Utilities Regulatory Policy Act
(PURPA)
New (17) Smart Grid Investments
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Utilities must consider smart grid investments before
proceeding with “traditional” investments
Utilities are authorized to recover costs of smart grid
investments
Utilities are authorized to recover remaining book
value of infrastructure made obsolete
Section 1307 – State Considerations
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New (18) Smart Grid Information
• Purchasers shall be provided direct
access, in writing or electronically, to
information including:
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Prices
Usage
Intervals and Projections
Sources and emissions
Section 1307 – State Considerations
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The PURPA Construct
• No direct mandate to do
• Requirement is to consider
• Not just State Commissions
• Commence a proceeding or set a
hearing date within 1 year
• Complete consideration and make
determination within 2 years
Energy Independence Act
Title V – Efficiency and Demand Response
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Two additional PURPA Standards
• Integrated Resource Planning (IRP)
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Integrate Efficiency into IRP
Adopt policy establishing efficiency as a priority
resource
• Rate Design to Promote Efficiency Investments
(Decoupling)
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Align utility incentives with energy efficiency (rate
design)
Promote energy efficiency investment
Removing throughput incentive
Adopt rate designs to encourage efficiency
Offer customers info and services in energy efficiency
and demand response
Energy Independence Act
Title V – Efficiency and Demand Response
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Section 529
Demand Response Assessment and
National Action Plan
• FERC has lead
• Assessment of national potential in 5 and 10
year increments
• Assessment completed within 18 months
• $10M per year authorized in 2008 through
2010
• Action Plan submitted to Congress within one
year of completion of Assessment
Energy Independence Act
Title V – Efficiency and Demand Response
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Section 529
Demand Response Assessment and
National Action Plan
Action Plan Components
• Technical Assistance needed by States
• National Communications Program
• Development of analytical tools, model
contracts and other support materials
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Action Plan Implementation
• FERC, together with DOE, to seek state
agreements and submit implementation plan
to Congress
Elsewhere in the bill (almost) – Taxes
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Accelerated Depreciation for Advanced Metering
(aka Qualified Energy Management Devices)
• Permanent Change from 20 years to 5-7 years
• $1.2 Billion tax benefit
• Utility is taxpayer
• Installations after January 1, 2008
• Device Eligibility
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Capable of hourly interval measurement and
recording
Capability to exchange information with customer
devices in support of time-based rates and demand
response
Capability to allow providers to provide usage
information to customers electronically
Utility must offer net metering
New Federal Law to Come
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Tax
• Accelerated Depreciation
• Investment Tax Credit?
• Reduction Tax Credit?
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Climate Change
• Role of Efficiency/DR
• M&V
Thank You
Dan Delurey
Wedgemere Group
Demand Response & Advanced Metering Coalition
www.dramcoaltiion.org
Demand Response Coordinating Committee
www.demandresponsecommittee.org
1615 M Street NW
Suite 900
Washington, DC 20036
202.296.1686