1. LICAP Settlement: Demand Resources
Opportunities and Challenges
Presented by:
Stephen Cowell, CEO
Conservation Services Group
April 26, 2006

2. CSG Founded in 1984 Nonprofit corporation More than 250 staff
12 offices nationwide
Over 1 million homes and facilities served
Design, develop, and deliver energy efficiency and renewable energy programs and projects

3. Alternative Resource Sector of NEPOOL
Demand Response
Energy Efficiency
Renewable Energy
Distributed Generation

4. CSG Participation NEPOOL member since 1999
Owns Solar Generation power plants
Delivers Energy Efficiency for program sponsors and merchant services
Sells efficiency resources to ISO under the SW Connecticut GAP RFP
Member of AR sector
Synapse Energy Economics provides representation and consulting services

5. Alternative Resources in NE
EE MW per year, currently 1,000 MW in place: 25%+ of annual load growth
Real Time Demand Response MW
DG MW (?)
5%+ of total ISO peak needs, and growing

6. Advantages of Alternative Resources
Avoid Reserve Requirements - 15%
Avoid T and D losses 6-12%
Clean (efficiency, renewables, DR) or cleaner (CHP) than traditional fossil fuel generation
Reduce market clearing prices for energy
Local resource - higher employment and economic multiplier benefits
Quicker deployment as a rule
Less price volatility of fuel source

7. Settlement: Agreement to incorporate Demand Resources into market
Committees charged with writing the rules to:
-Qualify Demand Resources for transitional payments
-Qualify and incorporate Demand Resources into FCM auctions

8. Challenges Short window to agree on and write rules
First time regional electricity markets have been truly open to all resources
Changing the regional mix may require looking at rate structures to insure equity among all players and encourage involvement of all parties

9. Opportunities
Region will have tools available to meet regional power needs using a common market platform
Northeast Energy Efficiency Partnerships (NEEP) has estimated that it is possible to meet all annual capacity growth through Energy Efficiency
Economic Development and environmental value of Demand Resources is greater than any other alternative