Grid of the Future: Integrating Load Response into the Markets

1. Grid of the Future:Integrating Load Response into the Markets Joe Polidoro, Sr. EngineerPJM Interconnection, LLC610-666-4693

2. PJM Mission • Maintain the safety, adequacy, reliability and security of the power system • Create and operate a robust, competitive, and non-discriminatory wholesale electric power market

3. Keep the Focus • Ensure that customers receive the value of competitively priced generation • Utilize Advanced Information Technologies to: • Simplify the life of the customer • Solve the problems • Integrate Load Response into the Markets

4. Future Footprint • PJM • PJM Western Region • Duquesne - Jan ‘05 • AEP – Oct ’04 • Dayton Power & Light - Oct ‘04 • ComEd – May ‘04 • Dominion Power – Spring 2005

5. Why Is Load Response Important? “Load response is a highly useful and beneficial tool to reduce costs and maintain reliability during peak periods when generation supplies may be scarce.” According to the April 30,2002 FERC Order

6. Participation in the Energy Markets

7. Industrial and Commercial End User Registrations (June 2002 thru December 2004) in the PJM Load Response Programs

8. Removing Barriers to the Ancillary Markets • Previous rules developed when large generators were the only resource • With the right tools, load can be as reliable and robust as generation • New rules explicitly allows for load to provide contingency reserve • New technology allows load to be responsive in real-time

9. Timeline • Introduction of Implementation Approach • Nov 2004 • Whitepaper Revisions / Business Rule Development • Dec 2004 • Reliability Council Changes • March 2005 • Committee votes • June 2005 • Implementation • September 2005

10. Telemetry Requirements • Spinning Reserve: • No less than one minute scan rate surrounding spin event • Can be sent to PJM at end of day in one upload • Regulation • 6 second scan rate minimum • Transmission to PJM in real time

11. Turn Data into Information with free web based tools (eData)

12. Turn Data into Information with free web based tools (eData)

13. Turn Data into Information with free web based tools (eData)

14. Why Is Your Participation Important? • Register with a Curtailment Service Provider • Working group participation in 2005 will likely fix your options for the next few years • There are many protocols issues that will be addressed by the working group this year that will affect whether your load is suitable for other opportunities and assist efforts to remove barriers for participation • You can participate in person, via phone or via web (free)

15. Summary of PJM • PJM is responsible for: • the reliability of the electric system, • the operation of competitive wholesale electric markets, and • ensuring that no member has undue influence. • An Independent Board governs PJM’s business. The Members Committee advises the Board on changes to meet members’ needs. • A series of Internet Tools are available at www.pjm.com to assist customers with business functions.

16. For any additional information, please do not hesitate to contact PJM or a PJM Curtailment Service Provider at PJM’s Web site: www.pjm.com > Services > Demand Response Program Joe Polidoro PJM Phone: 610-666-4693 LoadResponse@PJM.COM www.PJM.com Contact the organizers