Order 719 and demand response
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Order 719 and Demand Response. Steve Isser, JD, PhD Vice President and General Counsel Good Company Associates. Order 719 Genesis. Advanced Notice of Proposed Rulemaking - June 22, 2007 February 27, 2007, May 18, 2007, FERC Conferences on market power

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Order 719 and Demand Response

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Order 719 and demand response

Order 719 and Demand Response

Steve Isser, JD, PhD

Vice President and General Counsel

Good Company Associates


Order 719 genesis

Order 719 Genesis

  • Advanced Notice of Proposed Rulemaking - June 22, 2007

    • February 27, 2007, May 18, 2007, FERC Conferences on market power

    • Commission identified four specific issues

      • role of DR in organized markets, including price responsive load;

      • increasing opportunities for long-term power contracting;

      • strengthening market monitoring; and

      • responsiveness of ISOs to customers.


Order 719 genesis1

Order 719 Genesis

  • Demand response can help reduce wholesale prices and wholesale price volatility.

    • DR can bid directly into the wholesale market and put downward pressure

    • DR at retail reduces demand for power by LSE/REP

  • DR tends to flatten a market’s load profile, shifting generation toward lower-cost base load generation

  • DR can reduce market manipulation by reducing generator market power.


Key elements of order 719

Key Elements of Order 719

  • DR as a source of energy and AS, including retail demand response;

  • Scarcity pricing during reserve shortages;

  • Support for long-term power contracting;

  • Enhanced market-monitoring policies; and

  • Increased responsiveness of ISOs to their customers.


Demand response provisions

Demand Response Provisions

  • Accept bids from DR for ASA on a basis comparable to other resources;

  • Eliminate, during a system emergency, a charge to a buyer that takes less electric energy in the real-time market than it purchased in the day-ahead market;

  • Permit an aggregator of retail customers (ARC) to bid DR into the energy market;

  • Study whether further reforms are necessary to eliminate barriers to DR.


Process continuing

Process Continuing

  • ISOs have made initial filings

  • General theme

    • We’re already doing it

    • We don’t need to do it

    • What, Me Worry?

  • PJM is most advanced in integrating DR

  • Others may be ordered to do more

  • Additional filings coming, updates will be provided


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