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FERCs Role in Demand Response David Kathan Office of Energy Policy and Innovation Federal Energy Regulatory Commission Peak Load Management Alliance Practical.

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Presentation on theme: "FERCs Role in Demand Response David Kathan Office of Energy Policy and Innovation Federal Energy Regulatory Commission Peak Load Management Alliance Practical."— Presentation transcript:

1 FERCs Role in Demand Response David Kathan Office of Energy Policy and Innovation Federal Energy Regulatory Commission Peak Load Management Alliance Practical Demand Response for a Complex Future October 20, 2009

2 2 Outline FERCs FY09-14 Strategic Plan FERCs FY09-14 Strategic Plan Past Commission Activity Past Commission Activity Recent Commission Activity Recent Commission Activity The authors views do not necessarily represent the views of the Federal Energy Regulatory Commission

3 3 Released October 2009 Reflects the direction of the Commission in supporting national goals Speaks to future energy policy FERC FY09-14 Strategic Plan

4 4 FERCs Mission RELIABLE, EFFICIENT AND SUSTAINABLE ENERGY FOR CONSUMERS 1. 1.Ensure that rates, terms and conditions are just, reasonable and not unduly discriminatory or preferential Promote the development of safe, reliable and efficient energy infrastructure that serves the public interest. Assist consumers in obtaining reliable, efficient and sustainable energy services at a reasonable cost through appropriate regulatory and market means. Fulfilling this mission involves pursuing two primary goals:

5 5 FERC FY09-14 Strategic Plan Strategic Goals and Objectives Goal 1: Just and Reasonable Rates, Terms and Conditions Ensure that Rates, Terms and Conditions are Just, Reasonable and not Unduly Discriminatory or Preferential 1. Regulatory and Market Means 2. Oversight and Enforcement Goal 2: Infrastructure Promote Development of Safe, Reliable, And Efficient Infrastructure that Serves the Public Interest. 1. Development and Siting 2. Safety 3. Reliability

6 6 FERC FY09-14 Strategic Plan Key Demand Response Strategies 1.1 Ensure implementation of appropriate regulatory and market means for establishing rates Strategy 1: Establish rules that enhance competition by allowing non-discriminatory market access to all supply- side and demand-side energy resourcesStrategy 1: Establish rules that enhance competition by allowing non-discriminatory market access to all supply- side and demand-side energy resources 2.1 Increase efficient infrastructure consistent with demand Strategy 1: Encourage new electric transmission consistent with demandStrategy 1: Encourage new electric transmission consistent with demand Strategy 2: Support electric transmission planning through the use of open and transparent processes that include analysis and consideration on a comparable basis of proposed solutions involving any of generation, transmission, and demand resourcesStrategy 2: Support electric transmission planning through the use of open and transparent processes that include analysis and consideration on a comparable basis of proposed solutions involving any of generation, transmission, and demand resources

7 7 Past FERC Activity Continued co-sponsorship of the ongoing NARUC-FERC Demand Response Collaborative Dialogue Continued co-sponsorship of the ongoing NARUC-FERC Demand Response Collaborative Dialogue Continued support for regional demand response efforts Continued support for regional demand response efforts Issued two rulemakings that directly address demand response Issued two rulemakings that directly address demand response

8 8 Open Access Transmission Tariff Reform (Order No. 890) In February 2007 the Commission amended its regulations and the pro forma open access transmission tariff to remedy opportunities for undue discrimination and address deficiencies in the pro forma OATT. In February 2007 the Commission amended its regulations and the pro forma open access transmission tariff to remedy opportunities for undue discrimination and address deficiencies in the pro forma OATT. Key reform related to demand response was the requirement for open, coordinated and transparent planning on both a local and regional level. Key reform related to demand response was the requirement for open, coordinated and transparent planning on both a local and regional level. Preventing Undue Discrimination and Preference in Transmission Service, Order No. 890, FERC Stats. & Regs. ¶ 31,241 at P

9 9 Transmission Planning Processes Under Order No. 890 Comments are due by November 9, 2009 in AD09-8 on: Comments are due by November 9, 2009 in AD09-8 on: Should there be consistency in the way transmission providers treat demand resources, such as demand response, energy efficiency and distributed storage, in the transmission planning process?Should there be consistency in the way transmission providers treat demand resources, such as demand response, energy efficiency and distributed storage, in the transmission planning process? Are there preferred methods of modeling or otherwise accounting for demand resources in the planning process?Are there preferred methods of modeling or otherwise accounting for demand resources in the planning process? Does the planning process investigate transmission needs at fine enough granularity to identify beneficial demand resource projects?Does the planning process investigate transmission needs at fine enough granularity to identify beneficial demand resource projects?

10 10 Wholesale Competition Final Rule (Order No. 719) Wholesale competition NOPR contains four demand response proposals: Wholesale competition NOPR contains four demand response proposals: At All TimesAt All Times Aggregated retail demand responses may bid into RTO and ISO markets Aggregated retail demand responses may bid into RTO and ISO markets Unless the laws or regulations of the relevant electric retail regulatory authority do not permit a retail customer to participateUnless the laws or regulations of the relevant electric retail regulatory authority do not permit a retail customer to participate Demand response may bid into ancillary services markets Demand response may bid into ancillary services markets During a Power ShortageDuring a Power Shortage Reducing load is not penalized Reducing load is not penalized Price may help reduce demand Price may help reduce demand Wholesale Competition in Regions with Organized Electric Markets Docket RM07-19, 122 FERC ¶ 61,167, issued February 22, 2008

11 11 Recent FERC Activity National Demand Response Assessment National Demand Response Assessment Annual demand response and advanced metering reports Annual demand response and advanced metering reports NOPR on measurement and verification of demand response products and services in wholesale electric energy markets NOPR on measurement and verification of demand response products and services in wholesale electric energy markets National Action Plan on Demand Response National Action Plan on Demand Response

12 12 EISA 2007 Statutory Requirements Section 529 of Energy Independence & Security Act of 2007 creates a new Section 571 of the National Energy Conservation Policy Act that requires FERC to: Conduct a National Assessment of Demand Response Conduct a National Assessment of Demand Response Due by June 19, 2009Due by June 19, 2009 Develop a National Action Plan on Demand Response Develop a National Action Plan on Demand Response Due by June 17, 2010Due by June 17, 2010 With DOE, submit National Action Plan Implementation Proposal to Congress With DOE, submit National Action Plan Implementation Proposal to Congress Due by December 17, 2010Due by December 17, 2010

13 13 National Assessment of Demand Response Bottom-up, state-by- state analysis Bottom-up, state-by- state analysis 15 pilot programs synthesized 15 pilot programs synthesized User-friendly spreadsheet model User-friendly spreadsheet model Review of barriers Review of barriers Recommendations to achieve potential Recommendations to achieve potential

14 14 Approach: Scenarios Business-as-Usual (baseline) Business-as-Usual (baseline) Expanded Business-as-Usual Expanded Business-as-Usual Achievable Participation Achievable Participation Full Participation Full Participation

15 15 U.S. Peak Demand & NADRP

16 16 DR Potential by Program Type (2019)

17 17 DR Potential by Customer Class (2019)

18 18 Range of State Results (Achievable Participation Scenario) Gigawatt Basis Texas (13.2 GW) Texas (13.2 GW) Florida (11 GW) Florida (11 GW) California (8.8 GW) California (8.8 GW) Hawaii (0.2 GW) Hawaii (0.2 GW) Vermont (0.01 GW) Vermont (0.01 GW) Alaska (0.01 GW) Alaska (0.01 GW) Peak Load Fraction Conn. (26%) Conn. (26%) Maryland (24%) Maryland (24%) Maine (22%) Maine (22%) Wisconsin (8.5%) Wisconsin (8.5%) Hawaii (8.5%) Hawaii (8.5%) Alaska (4.6%) Alaska (4.6%)

19 19 State Details in Appendix D

20 20 FERC Assessments of Demand Response and Advanced Metering Required by EPAct 2005 Section 1252(e)(3) Required by EPAct 2005 Section 1252(e)(3) FERC staff issued reports in 2006, 2007 and 2008 FERC staff issued reports in 2006, 2007 and FERC staff report issued September FERC staff report issued September 2009 Future staff reports: Future staff reports: Comprehensive reports every even year reports (e.g. 2008) that will include survey resultsComprehensive reports every even year reports (e.g. 2008) that will include survey results Informational reports every odd year based largely on publicly available informationInformational reports every odd year based largely on publicly available information

21 FERC Demand Response Report Fourth annual report issued in September 2009 Fourth annual report issued in September 2009 Report includes Report includes Results from Assessment Summary of recent Commission actions Summary of noteworthy retail demand response activities

22 Survey 2010 Demand Response and Advanced Metering survey under development 2010 Demand Response and Advanced Metering survey under development Draft survey released for comment in Docket IC Draft survey released for comment in Docket IC Small number of comments were received Small number of comments were received Survey will be fielded in March/April 2010 Survey will be fielded in March/April 2010

23 23 Wholesale Demand Response Measurement and Verification Issued NOPR on proposed business practices on wholesale M&V developed by NAESB in RM Issued NOPR on proposed business practices on wholesale M&V developed by NAESB in RM Proposed standards categorize various demand response products and services and support M&V in wholesale electric energy markets Proposed standards categorize various demand response products and services and support M&V in wholesale electric energy markets Finds that more work is needed to develop substantive standards Finds that more work is needed to develop substantive standards Comments due October 22, 2009 Comments due October 22, 2009

24 24 Subsection 571(b) of the National Energy Conservation Policy Act require FERC to: Develop a National Action Plan on Demand Response Develop a National Action Plan on Demand Response Solicit input and participation from broad range of stakeholdersSolicit input and participation from broad range of stakeholders Including industry, state utility commissioners, and non- governmental groups Including industry, state utility commissioners, and non- governmental groups Identify requirements for technical assistance to statesIdentify requirements for technical assistance to states Identify requirements for a national communications programIdentify requirements for a national communications program Identify analytical tools and other support materialIdentify analytical tools and other support material Demand Response National Action Plan

25 25 Demand Response National Action Plan Status Developed a FERC Staff Discussion Draft of Possible Elements of a Demand Response National Action Plan Developed a FERC Staff Discussion Draft of Possible Elements of a Demand Response National Action Plan Conducted initial and broad outreach on Discussion Draft with stakeholders Conducted initial and broad outreach on Discussion Draft with stakeholders

26 26 Demand Response National Action Plan Next Steps Release Revised Discussion Draft Release Revised Discussion Draft Conduct National Action Plan Technical Conferences Conduct National Action Plan Technical Conferences Publish for Comment Draft National Action Plan Publish for Comment Draft National Action Plan Publish Final National Action Plan by June 2010 Publish Final National Action Plan by June 2010

27 27 Demand Response National Action Plan Implementation Proposal Post-June 2010 FERC will work with the Secretary of Energy to develop a proposal to implement the National Action Plan Post-June 2010 FERC will work with the Secretary of Energy to develop a proposal to implement the National Action Plan Contents of implementation proposal could include: Contents of implementation proposal could include: Specific proposed assignments of responsibilitySpecific proposed assignments of responsibility Proposed budget amountsProposed budget amounts Agreements secured for participation from State and other participantsAgreements secured for participation from State and other participants Implementation proposal due to Congress by December 2010 Implementation proposal due to Congress by December 2010

28 Questions? David Kathan


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