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Demand Reponse

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Russell Edwards

on 8 February 2014

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Transcript of Demand Reponse

Demand Response
What is
Demand Response (DR)?
The lowering or shifting of electric usage by end-use customers from their normal consumption patterns
The Biggest DR Challenges
DR Programs
R. 13-09-011
Purpose and Phases
Why Pursue DR?
DR is at the top of CA's 'loading order'
(along with EE)
Occurs in response to
High wholesale electricity prices
When system reliability is jeopardized
Incentive payments to lower electricity usage
Changes in the price of electricity over time
Benefits the environment
Emergency Resource/
Prevents Blackouts

Avoid high wholesale
energy prices

Could help integrate
intermittent renewable
resources into the grid

Price Responsive
Triggered to avoid high energy prices (day-of or day-ahead)
Participants receive an incentive (capacity payments, energy payments or both) for their load reduction
Dynamic Rates

Demand Bidding
Capacity Bidding
Peak Time Rebate
During an emergency situation (CAISO warning or local) participants reduce their load in exchange for an incentive payment
Base Interruptible Program (BIP)
AC Cycling
3rd Party entities aggregate end-use customer loads and provide DR capability to the IOU's via bilateral contracts.
Aggregated Managed Portfolio Contracts
Customers are charged higher rates at certain hours of the day.
Time of Use
Critical Peak Pricing
Phase 1: Transitional Years – 2015-16
1) Approved 1/16/14 – bridge funding for 2015 and 2016 programs.

2) Ruling requesting program improvements to ease transition issued on January 31st.
Phase 2: Foundational Issues
1) Bifurcation – purpose and definitions

2) Cost allocation

3) Use of diesel-fired back-up generation

4) Cost effectiveness
Phase 3: Competitive Procurement
1) Capacity payment mechanisms for DR

2) Possible other issues: DR as AS, adopt a MW or % target for supply-side DR
Competitive Procurement
Bifurcation of DR Programs
Lessons Learned During SONGS Contingency 2012
Misalignment Between RA & DR Requirements
From SCE's and SDG&E's Programs
1) Poor DR performance & free-ridership
2) Under-utilization of DR vs. frequent dispatch of peaker plants
3) Lack of transparency in utilities' dispatch of DR ("DR black box")
1) RA Requirements on CAISO Market Integration
Generation: must bid into the CAISO market & dispatched by the CAISO
a) Not bid into the market and has limited visibility to the CAISO
b) Dispatched by the utilities
2) Counting DR in Resource Planning
Generation: Pmax & Pmin based on testing and/or historical performance
DR: program maximum potential based on forecast
What is Direct Participation?
A retail customer, either on its own or enrolled in a DR Provider's (DRP's) program, bids its load into CAISO energy market and reduces load per the CAISO's dispatch order.
Integration with the CAISO Market
Direct Participation
(Rule 24)
Tariff rules that set the roles and responsibilities of different entities involved in facilitating direct participation, e.g. the utilities, DRPs
Enabler for the direct participation of utilities' bundled customers
Consumer protection: CPUC registration, customer notification letter, performance bond
What is Rule 24?



2013: $301M on DR Programs
1. Should DR resources be held to the same or comparable standards/rules as other generation resources when it is given an RA credit?

2. How should DR capacity that provides ancillary services to the CAISO markets be appropriately valued in order to incentivize the use of DR?

3. The Commission has stated in past decisions that it wants demand-side resources (EE, DR, DG) to be better integrated so that customers are better informed about their choices in managing their energy usage. Assuming the Commission bifurcates the DR portfolio into supply-side and demand side DR, what are the implications of demand side integration for these two types of DR?

4. DR capacity in the residential sector is largely untapped. What role, if any, should there be for third party aggregators or other market actors, and what is the best role for the IOUs in this sector?
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