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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

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
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 reliability eligibility
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
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
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
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
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
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