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Enabling Customer Demand Management Kevin Evans President & CEO June 24, 2010.

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Presentation on theme: "Enabling Customer Demand Management Kevin Evans President & CEO June 24, 2010."— Presentation transcript:

1 Enabling Customer Demand Management Kevin Evans President & CEO June 24, 2010

2 Proprietary Company Information 2 Legacy market: Grid Operator/Utility Centric Command and Control driven environment Emerging market: Hybrid market with traditional Command and Control augmented by more customer centric Inform and Motivate Situational awareness is better than command and control Command and control may remain appropriate for ancillary services or emergency peak reduction until telemetry provides real-time situational awareness Factors limiting customer participation Complex rules differentiated across all jurisdictions Pricing implications not put in easy to understand context for customers Enabling technology not available, too costly or too complicated to use Evolution of Demand Response

3 Proprietary Company Information 3 DR Forces – RTO vs. Energy User RTO / ISO Energy User RTO needs and energy user desires often at odds with each other Needs Reliability Predictability High Capacity Factor Efficient Markets Desires Min. Operational Impact On Demand Flexibility Lowest Cost Electricity

4 Proprietary Company Information 4 Demand Resource Enabling technology that inform and motivate energy users and meet Grids needs Demand Resource Enabling technology that inform and motivate energy users and meet Grids needs Bringing Forces Together Needs Reliability Predictability High Capacity Factor Efficient Markets Desires Min. Operational Impact On Demand Flexibility Lowest Cost Electricity Energy User RTO / ISO Win/Win Curtailment Planning Adequate Compensation Situational Awareness Price Discovery

5 Proprietary Company Information – 2008: Program Design & Testing Baselines, price signals Rebate or incentives 2009 – 2010: Getting the Rules Right Standardized baseline usage calculation Curtailment plans and telemetry FERC NOPR Compensation Market education & adoption 2011 and Beyond Wider adoption in other RTOs $48M $27M $1M PJM moves from full LMP to LMP - G History of Price Response in PJM

6 Proprietary Company Information 6 Assess Curtailment Capability Install Telemetry Set Notification Criteria Notify Customer of Opportunities Settlement and Payment Accept, Modify, or Ignore Test & Certify Value Proposition Putting Price Signals in Context Market opportunities automatically monitored for customers and put in their perspective

7 Proprietary Company Information 7 More than just a price signal, full value proposition quantified for customer Makes it easy for customers understand value from THEIR perspective Easy what if analysis of running modified scenarios Enables direct scheduling of load shift via BAS or other control tech Value Proposition Easily Evaluate and Modify Schedules

8 Proprietary Company Information 8 Real-time Price Discovery

9 Proprietary Company Information 9 Real-time Performance Monitoring

10 Proprietary Company Information 10 Utility Based Dynamic Capacity Pricing Average Historical Peak Loads and Act 129 Mandated Peak Demand Reductions as Measured in Megawatts EDCLoad4.5% Reduction Duquesne2, Met-Ed2, Penelec2, Penn Power98044 PPL6, PECO7, West Penn3, Total26,5241, Top 200 Hours 100 hours of $100/MWh = $10,000 Low Incentive Assume the capacity payment is $50,000/MWyr., the economic offer could be: Medium Incentive 50 hours of $300/MWh = $15,000 High Incentive 50 hours of $500/MWh = $25,000 Reconstituting capacity payments to a Pay for Performance incentive 26,500 26,250 26,000 25,750 25,500 25,250 25,000

11 Proprietary Company Information 11 Full Integration with Grid Operations Automatically processes notification from utility or grid operator Customer notification options via , voice message to phone, pager, etc. Processes 10,000s of messages per minute Communicates directly with customer control systems Remotely starts processes or back-up generation

12 Proprietary Company Information 12 Automated Load Management DR Interface

13 Proprietary Company Information 13 Command & Control Shaping the Smart Grid Communication & Control Network Resource Energy Controller (REC) Thermal Network Electric Network Virtual End Node (VEN) E-Connect Energy Resource Interface (ERI) Communication & Control Network Resource Energy Controller (REC) Thermal Network Electric Network Virtual End Node (VEN) Inform & Motivate

14 Proprietary Company Information 14 Needs Reliability Predictability High Capacity Factor Efficient Markets Desires Min. Operational Impact On Demand Flexibility Lowest Cost Electricity Energy User RTO / ISO Technology Enabled Demand Response Demand Resource Enabling technology that inform and motivate energy users and meet Grids needs Demand Resource Enabling technology that inform and motivate energy users and meet Grids needs Win/Win Curtailment Planning Adequate Compensation Situational Awareness Price Discovery


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