Transcript Demand Response – Is There Anything More Important?

Demand Response – Is There
Anything More Important?
Scott Miller
New England Conference of
Public Utilities Commissioners
June 18, 2002
DR – The Long Wait
 Much has been said about demand
response but not much has been done
 Demand Response has become a
motherhood and apple pie issue
 Discussion seems to stop with “yes, we
must do that”
 Feds and states have a role that needs to
compliment each other
DR – The Promise
 Demand Response benefits
– Mitigation of Market Power
– Mitigation of Load Pocket Issues (Boston, etc)
– Environmental Benefits
– DR should lead to innovative Distributed
Generation (DG) such as fuel cells
– Enhance Reliability
– Reduce Retail costs relating to ICAP, gen
adequacy standards
Supply/Demand
 Whether states have retail access or not, a
market needs an elastic demand curve
– This is critical
 ISOs, States have tried some demand
programs but mostly “placeholders”
 FERC has told ISOs to accommodate
demand bidding but little else
 Standard Market Design and state programs
must mesh… but how?
What SMD Will Do
 Requirement that load (demand) has to be
treated the same as supply for bidding
 Day ahead market requirement should
facilitate some demand bidding
 What else do we need on the wholesale
side to make to meet state requirements?
 We could use some help here…
Proposal for New England
 Need to get real demand response going
real soon
 New England region has a generally
homogeneous interest in DR
 Need a regional approach, not a single state
 Unique position to work as a group to advise
FERC on SMD helping to make make
demand responsive
Proposal (2)
 Goal: Get 5-10% of NE load into a stable DR
program that has longer than a summer peak
lifespan
– for 3-4 year period
 FERC would provide $50,000 for consultant work
(collaborate on selection) to help
– DoE will provide $40,000 and national lab experts
 Timeline: Results needed by mid-November to be
included in SMD final rule
 FERC personnel work with NE effort after NOPR
Proposal (3)
 Need NE group to come up with a “business
plan” that details what states are going to do
and what they need SMD to do
 DoE will look to provide funding in FY 2003
($200K) to support program implementation
for states
 EPA looking to fund complimentary
programs & possible help on SIP offset
Caveat
 DR in the past has suffered from stop-gap,
one year pilot programs
 Nothing done on a regional basis that really
gets demand response other than during
“emergencies”
 Effort needs to get to real tariff results, not
more consultant platitudes
 Plan needs implementation follow through,
stability, and occasional tweaks
Benefits for New England
 You get to tell Feds what to do… who
wouldn’t love that?
 NE could become the experts on DR and
the national lab on the subject
 Get the promise of DR earlier than everyone
– Environmental
– Real market driven mitigation
– Congestion relief
– Others
Benefits for FERC
 Help from a region with a corresponding
interest
 If successful, will help market oversight as
markets become more competitive
 Help connecting SMD to the missing
element… responsive demand
 Markets will not work as hoped without real
demand response