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Measurement & Verification at the Wholesale Market Level

Measurement & Verification at the Wholesale Market Level. David Kathan FERC. NAESB DSM/EE Business Practices Washington, DC April 11, 2007 The author’s views do not necessarily represent the views of the Federal Energy Regulatory Commission. Demand Response in Wholesale Markets.

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Measurement & Verification at the Wholesale Market Level

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  1. Measurement & Verification at the Wholesale Market Level David Kathan FERC NAESB DSM/EE Business Practices Washington, DC April 11, 2007 The author’s views do not necessarily represent the views of the Federal Energy Regulatory Commission

  2. Demand Response in Wholesale Markets • Retail demand response key source of wholesale demand response • LSEs use demand response as a hedge and/or serve as aggregators for ISO/RTO programs • Grid operators operate demand response to support reliability • 37,500 MW of demand response potential in existing programs • About 25% of total are associated with ISO/RTO demand response • ISO/RTO demand response programs • Energy markets (CAISO, ISONE, MISO, NYISO, PJM) • Ancillary services (CAISO, ERCOT, ISONE, PJM) • Capacity markets (ISONE, NYISO, PJM)

  3. FERC’s Role in Demand Response • The Commission recognizes • Demand responsiveness is missing from wholesale markets • “One thing that is missing in wholesale markets is effective demand response.” Chairman Kelliher (Inside FERC, 1/15/07) • Need to coordinate with states on demand response • “Federal and state regulation has to work together and encourage greater demand response” Chairman Kelliher (1/25/06) • The Commission has • Approved demand response programs proposed by ISO/RTOs • Supported regional demand response initiatives (e.g., the Mid-Atlantic Distributed Resources Initiative) • Co-sponsored the NARUC-FERC Demand Response Collaborative Dialogue • Commissioner Jon Wellinghoff is a co-chair

  4. Need for M&V at the Wholesale Level • FERC Staff Demand Response Report identified the need for consistent and accurate measurement and verification (M&V) as key regulatory issue • M&V needed: • To support just and reasonable rates for the delivery of demand response in wholesale markets • To provide system operators with accurate forecasts and assessments of demand response • To accurately measure and verify demand resources that participate in capacity markets

  5. Wholesale Market M&VChallenges and Issues • Measurement of demand response impact is different than metering of generation output • M&V needed to support wholesale demand response • Likely different than needed for retail energy efficiency and load management • Differs by type of demand resource • Incentive-based programs requires estimate of customer baseline • Time-based rates require forecasts of response based on statistical or regression analysis • No standardization of M&V protocols • Customer baseline calculations vary across ISO/RTOs

  6. Commission M&V Activities • Joint NARUC-FERC DR Collaborative is examining the issue • Discussed at February 18 meeting • Subject of panel at upcoming April 23 Commission technical conference on demand response • Recently approved reliability standards (Order 693) emphasize need for measurement of demand response • Documentation of interruptible and controllable load • MOD-019, MOD-020, and MOD-021 • When providing contingency reserves • BAL-002, EOP-002

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