A national perspective on demand response
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A National Perspective On Demand Response. Ahmad Faruqui, Ph.D. March 3, 2008 California Energy Commission Sacramento, California. DR is widely deployed across the country but it is mostly triggered during emergencies. According to a FERC survey, 234 US electric utilities offer DR programs

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A National Perspective On Demand Response

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A national perspective on demand response

A National Perspective On Demand Response

Ahmad Faruqui, Ph.D.

March 3, 2008

California Energy Commission

Sacramento, California


Dr is widely deployed across the country but it is mostly triggered during emergencies

DR is widely deployed across the country but it is mostly triggered during emergencies

  • According to a FERC survey, 234 US electric utilities offer DR programs

  • A DOE study suggests that some type of DR program exists in 42 of 50 states:

EE and DR Programs

EE Programs Only

DR Programs Only

No Energy Management Programs

Source: DOE Federal Energy Management Program Website. http://www1.eere.energy.gov/femp/program/utility/utilityman_energymanage.html


Nerc has quantified the impact of emergency triggered dr by region

NERC has quantified the impact of emergency-triggered DR by region


Nerc acknowledges that these self reported dr estimates may overstate actual capability

NERC acknowledges that these self-reported DR estimates may overstate actual capability

Demand Response by NERC Region

Source: 2007 NERC Summer Assessment, 2007 FERC Assessment of DR & Advanced Metering


Ferc data shows that the dr mix is heavily tilted toward emergency triggered programs

FERC data shows that the DR mix is heavily tilted toward emergency-triggered programs

Percentage of DR by Type


California dispatched the most dr during the heat storm of 2006

California dispatched the most DR during the heat storm of 2006

Peak Reduction from DR in 2006


Additional dr comes from dynamic pricing programs aimed at customers 500 kw

Additional DR comes from dynamic pricing programs aimed at customers > 500 kW

  • This amounts to approximately 1 percent of US peak demand which

    • When added to DR coming from reliability-triggered programs, this amounts to some 3.5% of US peak demand

  • Much of the price-responsive DR originates in the regions east of the Mississippi River

    • Duke Energy

    • Georgia Power Company

    • Tennessee Valley Authority

  • There is additional DR in restructured power markets in Texas, New York, New England and PJM that feature hourly pricing as the default service

    • Customers can opt to energy service providers for hedged pricing products


A forthcoming epri eei study suggests that dr can lower peak demands by 10

A forthcoming EPRI-EEI study suggests that DR can lower peak demands by 10%

Source: EPRI/EEI National EE and DR Potentials Study: Preliminary Results


Dynamic pricing will soon be offered in mass market as ami spreads nationwide

Dynamic pricing will soon be offered in mass market, as AMI spreads nationwide

Number of Utilities Announcing AMI Deployments

Source: UtiliPoint International, 2007 FERC Assessment of DR & Advanced Metering


To assess ami economics several dynamic pricing pilots are being carried out

To assess AMI economics, several dynamic pricing pilots are being carried out


A national perspective on demand response

Across these pilots, there is compelling evidence of strong demand response potential


Higher impacts are observed for dynamic pricing rates than for tou rates

Higher impacts are observed for dynamic pricing rates than for TOU rates


Multiple barriers are impeding the wider deployment of price responsive dr

Multiple barriers are impeding the wider deployment of price-responsive DR

  • Lack of state-federal regulatory coordination

  • Disconnect between retail and wholesale power markets

  • Retail rate freezes and wholesale price caps

  • Lack of AMI and enabling technology

  • Customer fear of price volatility

  • Unimaginative program designs

  • Aggregators not allowed into the market


How does california compare with the rest of the country

How does California compare with the rest of the country?

  • ISO/RTO based reliability-triggered programs

    • California is on par with the rest of the US

  • Price responsive retail and wholesale DR

    • California lags the country

  • Dynamic pricing for large power customers

    • California lags the country

  • Dynamic pricing for the mass market

    • California has conducted the most comprehensive pricing pilot in the country

    • It is moving faster than the nation with AMI deployment


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