Measurement

1
Measurement Verification at the Wholesale
Market Level

• David Kathan
• FERC

NAESB DSM/EE Business Practices Washington,
DC April 11, 2007 The authors views do not
necessarily represent the views of the Federal
Energy Regulatory Commission
2
Demand Response in Wholesale Markets

• Retail demand response key source of wholesale
  demand response
• LSEs use demand response as a hedge and/or serve
  as aggregators for ISO/RTO programs
• Grid operators operate demand response to support
  reliability
• 37,500 MW of demand response potential in
  existing programs
• About 25 of total are associated with ISO/RTO
  demand response
• ISO/RTO demand response programs
• Energy markets (CAISO, ISONE, MISO, NYISO, PJM)
• Ancillary services (CAISO, ERCOT, ISONE, PJM)
• Capacity markets (ISONE, NYISO, PJM)

3
FERCs Role in Demand Response

• The Commission recognizes
• Demand responsiveness is missing from wholesale
  markets
• One thing that is missing in wholesale markets
  is effective demand response. Chairman Kelliher
  (Inside FERC, 1/15/07)
• Need to coordinate with states on demand response
• Federal and state regulation has to work
  together and encourage greater demand response
  Chairman Kelliher (1/25/06)
• The Commission has
• Approved demand response programs proposed by
  ISO/RTOs
• Supported regional demand response initiatives
  (e.g., the Mid-Atlantic Distributed Resources
  Initiative)
• Co-sponsored the NARUC-FERC Demand Response
  Collaborative Dialogue
• Commissioner Jon Wellinghoff is a co-chair

4
Need for MV at the Wholesale Level

• FERC Staff Demand Response Report identified the
  need for consistent and accurate measurement and
  verification (MV) as key regulatory issue
• MV needed
• To support just and reasonable rates for the
  delivery of demand response in wholesale markets
• To provide system operators with accurate
  forecasts and assessments of demand response
• To accurately measure and verify demand resources
  that participate in capacity markets

5
Wholesale Market MVChallenges and Issues

• Measurement of demand response impact is
  different than metering of generation output
• MV needed to support wholesale demand response
• Likely different than needed for retail energy
  efficiency and load management
• Differs by type of demand resource
• Incentive-based programs requires estimate of
  customer baseline
• Time-based rates require forecasts of response
  based on statistical or regression analysis
• No standardization of MV protocols
• Customer baseline calculations vary across
  ISO/RTOs

6
Commission MV Activities

• Joint NARUC-FERC DR Collaborative is examining
  the issue
• Discussed at February 18 meeting
• Subject of panel at upcoming April 23 Commission
  technical conference on demand response
• Recently approved reliability standards (Order
  693) emphasize need for measurement of demand
  response
• Documentation of interruptible and controllable
  load
• MOD-019, MOD-020, and MOD-021
• When providing contingency reserves
• BAL-002, EOP-002