DRWG AUGUST 27, 2014  |  Holyoke MA
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DRWG AUGUST 27, 2014 | Holyoke MA. Doug Smith. DEMAND RESOURCE ADMINISTRATION. Demand Response Component Overview. Winter Reliability Solutions 2014-2015. Overview. Modification to the 2013/14 Winter Program Filed in July 2014, FERC decision expected in September

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DRWG AUGUST 27, 2014 | Holyoke MA

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DRWG AUGUST 27, 2014 | Holyoke MA

Doug Smith


Demand Response Component Overview

Winter Reliability Solutions



  • Modification to the 2013/14 Winter Program

    • Filed in July 2014, FERC decision expected in September

  • Same goal: maintain reliability by

    • Creating incentives for dual fuel resource capability and participation,

    • Offsetting the carrying costs of unused firm fuel purchased by generators, and

    • Providing compensation for incremental demand response services to maintain Thirty-Minute Operating Reserves

  • Proposed changes are in response to:

    • Generator difficulty in replenishing oil mid-winter

    • More severe gas constraints than anticipated

    • Retirements of non-gas generators

Overview (continued)

  • Generation Component

    • Compensation for unused oil inventory and unused LNG contract volume

    • Limits ISO discretion in selecting offers and pays participants an administratively set rate

    • Account for newly-implemented market changes

      • Commissioning dual-fuel resources

      • Offer flexibility

    • Enhanced clarity for generator obligations

  • Demand Response Component

    • No changes to eligibility

    • Increased operational flexibility

    • Eliminated energy penalty

    • Compensation administratively set based on oil rate

Demand Response Winter ReliabilityEligibility

  • Open to end-use facilities

    • That normally consume energy and can reduce demand in response to dispatch instructions

    • With behind-the-meter generation, including facilities that can produce net supply

  • Assets may or may not be associated with FCM resources

    • If associated with an FCM resource, must have capacity in excess of that needed to meet CSO

  • Individual end-use facilities may be aggregated into one asset

    • Must be located in the same dispatch zone

    • Cannot result in total demand reduction and net supply at a single node of 5 MW or greater

Demand Response Winter Reliability Offers

  • Limited to 100 assets

  • Total cannot exceed 100 MW

  • Offers must be submitted by October 1, 2014

  • ISO will select assets based on

    • Capacity

    • Location

    • Historic performance (where available)

Demand Response Winter Reliability Dispatch

  • Assets must be available for dispatch between 0500 and 2300, all days of the week

  • Dispatches:

    • Will not exceed six hours

    • Will be for the total committed MW quantity

    • Will exclude assets or zones if there are local reliability issues

    • No more than two dispatches each day

    • A minimum of four hours between dispatches

    • No more than 30 dispatches during the program

  • Dispatch will occur prior to or concurrent with an OP-4 Action 2 dispatch

Demand Response Winter Reliability Monthly Payment

  • Assets not mapped to an FCM Resource

    • $1,800 multiplied by the average MW performance in the month

    • Capped at 150% of committed quantity

  • Assets mapped to an FCM Resource

    • $1,800 multiplied by the average MW performance in the month and the Performance Factor

    • Capped at 100% of committed quantity

    • Performance Factor less than or equal to 1 ensures performance is incremental to the CSO of the resource the asset is mapped to

  • Payment rate is equivalent to the rate for unused oil inventory on an MMBTU basis assuming all hours are called

Demand Response Winter Reliability Energy Payment

  • Energy Payment

    • Maximum of $250 or the Zonal Locational Marginal Price, multiplied by the MWh delivered

    • Demand reductions will be multiplied by an avoided energy loss factor of 1.065

    • Energy payments made for net supply to a generation asset at the same retail delivery point coincident with a winter dispatch will be subtracted

    • Transitional Demand Response energy payments for hours coincident with a winter dispatch will also be subtracted

Demand Response Program Penalties

  • No energy charges for underperformance for 2014/2015

  • Assets failing to meet 75% of committed MW forfeits the capacity payment for the month

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