Current ISO-NE demand response (DR) programs are set to expire in one year (June 1, 2010) and ISO-NE has initiated a stakeholder process (pdf) to decide what comes next. Key features of two of the DR programs currently offered by ISO-NE include:
- Real-Time Price Response Program, under which participants may interrupt their power use when the forecast price of power reaches $100/MWh or more and the ISO lets participants know the eligibility period is open. Participants are paid $100/MWh or the LMP at the time of their interruption, whichever is higher.
- Day-Ahead Load Response Program, which allows participants to submit offers to interrupt power use along with submissions of supply offers in the day-ahead energy market. Participants are paid the Day-Ahead LMP for the cleared interruptions, and real-time deviations are charged or credited at the Real-Time LMP.
In a recent FERC filing (pdf), ISO-NE noted that this stakeholder process touches on a variety of policy issues. Many of these policy issues reflect the need to encourage demand response (making it economically advantageous to reduce power use at times of peak load and providing DR opportunities to all customer classes, for example) without distorting the market (by offering DR subsidies disproportionate to their actual benefits to transmission system reliability).
Market-based capacity programs like those currently available at ISO-NE can inspire huge growth in DR, particularly in the wholesale and industrial customer classes. According to ISO-NE, DR resources (mostly wholesale and industrial) in the region have gone from 100 MW to 2,500 MW since the inception of these programs. Still, the FERC estimates (pdf at 33) there could be 41 GW of demand response available in the United States; if that estimate’s right, there should be a lot more to be found in New England, especially among customers who lack direct access to capacity programs, like residential customers. The rapidly emerging SmartGrid standards will have a large impact on how DR programs are designed – and how much access various customer classes have to them. Makes sense, then, that the most recent meeting of the ISO-NE Demand Resources Working Group was held jointly with the Demand Resources IT Infrastructure Working Group.
ISO-NE intends (pdf) to file an updated report on this stakeholder process with the FERC by the end of July, 2009, detailing areas of consensus. Any rule changes resulting from this discussion will be presented to stakeholders and filed with the FERC by the end of 2009.
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