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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. 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?

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  1. Demand Response – Is There Anything More Important? Scott Miller New England Conference of Public Utilities Commissioners June 18, 2002

  2. 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

  3. 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

  4. 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?

  5. 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…

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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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