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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

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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
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
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
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
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
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
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
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
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
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
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
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