Figure 1. PX Prices and Total ISO Load (May 15 - August 31, 2000) MW $/MWh

Figure 2. The Market Connected Demand Response in Steep Portion of Supply Curve Yields Lower Wholesale Prices $/MWh GWh Q normal Q hot D hot D normal P hot Retail Price P normal > > > >> > > Q spike B C L normal D A E > > > E´ P spike L hot

Figure 3. RTP Load Response -- Moderate and High Prices (30% to 60% load reductions for most flexible customers)

Figure 4. Characterizing Hourly Price Responsiveness -- Flexibility Parameters Ability to shift load within and between days E.g., % shift in load within a day in response to given % change in relative price Source of information--EPRI StatsBank kWh Effect of Within-Day Flexibility Parameter -- One High-Price Hour Hour $/ kWh Reference load FP =.10 FP =.25 RTP Price

Table 1. Effect of Demand Response O ne hour at $750/MWh LowMediumHigh Demand response (MW)4841,0651,935 (Percent of total ISO load)1.2%2.5%4.6% Price reduction ($/MWh)80$ 160$ 256$ (Percent)11%24%42% Cost reduction ($million)3.3$ 6.7$ 10.8$ Market share and demand responsiveness scenarios

Table 2. Total Effect of Demand Response May - August 2000 (Alternative Scenarios) LowMediumHigh Average price reduction, summer peak ($/MWh) 12.1$ 24.5$ 40.2$ (Percent)5.7%11.6%19.1% Total cost reduction, high- price days ($million) 344$ 701$ 1,158$ (Percent)4.7%9.5%15.7%

Figure 4. Sensitivity Analysis Tradeoff between Market Share and Price Responsiveness to achieve given price reduction (from $750/MWh) 0% 5% 10% 15% 20% 25% 30% 35% Average price elasticity Market share of hourly pricing 24% price drop42% price drop