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NARUC/FERC COLLABORATIVE: DEMAND RESPONSE

NARUC/FERC COLLABORATIVE: DEMAND RESPONSE. Paul Suskie, Chairman, Arkansas Public Service Commission July 15, 2007. Arkansas Experience. Legislative Action in Arkansas APSC Activities 1977 - Current Comparison of Demand Response by IOUs and Cooperatives Success of Some Current Activities

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NARUC/FERC COLLABORATIVE: DEMAND RESPONSE

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  1. NARUC/FERC COLLABORATIVE: DEMAND RESPONSE Paul Suskie, Chairman, Arkansas Public Service Commission July 15, 2007

  2. Arkansas Experience • Legislative Action in Arkansas • APSC Activities 1977 - Current • Comparison of Demand Response by IOUs and Cooperatives • Success of Some • Current Activities • Regional Activities

  3. Legislative Action In Arkansas • Energy Conservation Endorsement Act of 1977 • Adopted at a time of energy insecurity • Focus of the law was on three areas: • Insulation programs for all customer classes; • Renewable programs; and • “Programs which result in the improvement of load factors, contribute to reductions in peak power demands, and promote efficient load management, including the adoption of interruptible service equipment and alternative or additional metering equipment designed to implement new rate structures”

  4. Legislative Action (cont.) • Resurrection of a Dead Law Act 1939 of 2005 directed the Commission to report on its activities under the ECEA of 1977 to the General Assembly for the period of July 1, 1998, through June 30, 2006.”

  5. APSC ECEA Activities Since 1977 • While this law authorizing APSC action on conservation and EE has been on the books for three decades, until January 2006, it had been neither implemented nor invoked by the Commission in a rulemaking or other proceeding. • During the 90’s, pursuant to Federal law, demand side management and IRP were “considered” but not adopted.

  6. APSC ECEA Activities Beginning 2006 • January 2006 acted to begin implementing the ECEA to increase the level of energy conservation and energy efficiency activity in the state of Arkansas. • Order issued in January 2007 establishing a schedule for implementing quick start programs. • Programs that have been proposed include energy efficiency and demand response. • On May 24 -25, 2007 the Commission hosted a workshop on DR and AMI

  7. Demand Response Activities • IOU activities since 1977: • To the extent they have existed have been minimal; • Different theories for minimal attention for IOU DR activities include excess supply, historic low cost generation, sufficient transmission, the IOUs had little incentive to invest in DR and encourage conservation; • In a recent rate case, the Commission determined that an optional irrigation control program could be terminated but this was due to the utility’s failure to maintain the equipment. The Commission approved a BPL pilot and directed the company to investigate reinstating the program.

  8. Demand Response Activities • Electric cooperative activities: • Started in 1978 and have been significant • Coops have approximately 730 MWs of DR (out of total 2708 MW demand) achieved by: • Direct control by member coops • Voluntary control by customers • Direct control of industrial load by Arkansas Electric Cooperative Corporation (Generation & Transmission Cooperative)

  9. C&I VoluntaryControl 3% Load Controlled by Member Cooperatives 4% Load Controlled by AECC 20% Firm Load 73% Note: AECC’s 2006 firm load = 1,971 MW

  10. Reasons for Coops Success? • DR provides an opportunity to gain an economic advantage in the bills of customers and distribution coops • Use of DR avoids ST capacity shortages • Use of DR avoids LT capacity investment

  11. Current Activities • Electric utilities (IOUs) have begun filing plans for quick start programs to begin offering service October 1, 2007 • Demand response programs proposed include: • Emergency load management standard offer • Commercial and Industrial standard offer • Improving education and outreach about existing programs • After experience with quick start programs, longer term programs to be filed not later than April 1, 2009

  12. Regional Activities • Arkansas is split by a seam but AR is not a retail open access state • SPP RTO serves the western portion of the state (including high growth area in NW AR) • The SPP has begun to determine how to incorporate DR into the imbalance market • The SPP has formed a DR Task Force • Possible future market development could include DR • Entergy serves the remainder of the state • Not aware of any regional activity • APSC will continue to build from the experience of other states and experience of those within the state

  13. Arkansas – SPP - Entergy

  14. Observations • IOUs have work to do, in particular in high growth areas where it is difficult to place generation and transmission • Coops may have flattened their peak as much as possible • Regionally it is important for regulators to share information on DR programs that are working and those that haven’t

  15. QUESTIONS?

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