FERC actions with regard to individual ISOs and RTOs regarding Demand Response

From the 2008 FERC Demand Response and Advanced Metering Survey, here is what different ISOs are proposing to the FERC regarding their intentions for implementing demand response smart grid application technology:

Midwest ISO: FERC conditionally accepted the Midwest ISO’s proposal to implement a dayahead and real-time ancillary services market. The market design provides for the integration of demand response resources into reserves markets and includes scarcity-pricing provisions that should encourage demand response to participate. FERC also conditionally accepted the Midwest ISO’s resource adequacy program, which contains mandatory requirements for any market participant serving load in the Midwest ISO region to have and maintain access to sufficient planning resources. The program provides that the resource adequacy requirement can be met by any qualified planning resources, be they generation capacity or demand response.

NYISO: FERC conditionally accepted NYISO’s proposal to allow certain demand response resources to offer operating reserves and regulation service into the NYISO-administered markets, provided they install real-time metering and meet certain performance criteria and technical specifications comparable to those required of generation resources. FERC required NYISO to provide information on the progress of the ongoing process to accommodate batch loads and energy storage technologies in providing operating reserves and regulation service.

California ISO: FERC continues to monitor the California ISO’s efforts to integrate demand response resources into its markets. Demand response resources meeting certain requirements can currently participate in the California ISO’s energy and ancillary services markets as Participating Load. In compliance with a prior FERC order, the California ISO filed its first annual demand response report in January 2008.90 Additionally, the California ISO has engaged in a stakeholder process to enhance opportunities for demand response resources to participate in the California ISO’s markets after the initial release of its market redesign and technology update (MRTU) program. The California ISO intends to allow demand response resources to bid into the California ISO energy markets and provide certain ancillary services.

SPP: FERC continues to monitor SPP’s efforts to integrate demand response resources into its energy imbalance services market.92 SPP filed two status reports in 2007 regarding its progress in implementing demand response. In its August 1, 2007 filing, SPP discussed how its market design currently accommodates behind-the-meter wholesale generation. SPP also reported that it has a three-year commitment with the Electric Power Research Institute to explore best practices of demand response and energy efficiency. On February 4, 2008, SPP filed a follow-up report, stating that it was working on market design issues that needed to be resolved in order to enable demand response to participate directly in the energy imbalance services market. In order to discuss ways to break down implementation barriers, SPP hosted a Demand Response Educational Forum on July 27 and July 28, 2008.

PJM and ISO-NE: In PJM, FERC responded to a complaint challenging the sunset of an incentive program for demand response. FERC also acted to address concerns about potentialgaming in the demand response programs in PJM and ISO-NE.