Highlights on Demand Responses

PUCT Workshop on Demand Response, 3/14/13

By Margarita Fournier and Denise Stokes

POINTS OF INTEREST

  • On 3/14/13, the PUCT held a workshop on increasing Demand Response (DR) in the ERCOT market.  A number of parties presented their comments, with Commissioners asking questions and offering their views on the subject.
  • An Oncor representative stated that one obstacle to more load management programs are the cost caps (as recently instituted in the energy efficiency rule).  He said that the role of a TDU in this area is as a facilitator, and that it is important to focus on educating customers because they are not always aware of DR and its benefits.
  • Commissioner Anderson commented that the TDU role should be limited, and the main interaction ought to be between the customer and Retail Electric Provider (REP).
  • A representative of a Texas steel company said that DR programs are very difficult to develop, and need consistent message and conditions to grow.  The loss of a forward-price visibility, in the transition from the zonal market, has made DR participation more difficult.  To get more DR participation, it is important “to keep things simple.”
  • The PUCT Chairman observed that it is actually the low energy price that limits customers’ interest in DR.
  • Several industrial customers expressed a view that “loads in SCED” (Security Constrained Economic Dispatch) are not the best way to go (even though this is a project currently under development at ERCOT).  They opined that it will take a long time for it to take off.
  • Commissioner Anderson focused on the question of whether it is possible to move ERS (Emergency Response Service) into the DAM (Day-Ahead Market).  He believes that if ERS were a “true” Ancillary Service (AS), it would solve many problems.
  • ERCOT staff said that they could support the daily aggregation of loads for ERS, but that it would change the nature of this program.
  • Chairman Nelson commented that, in her view, ERS is too much of a “capacity payment to load” program, and she noted that comments were filed, proposing programs with capacity payments for up to 10 years.  She stated that she would not approve such programs, and added that, once started, they are very difficult to stop.
  • A Comverge representative stated that there is a difference between DR for reliability purposes (as operated by ERCOT) and DR for economic reasons (between a REP and customer).
  • In the discussion about how to count DR in the CDR (Capacity, Demand, and Reserves), ERCOT staff clarified that they will be conducting a survey of all Load Serving Entities’ (LSEs) DR programs by the end of this summer.    
  • A Frontier Associates representative discussed possible reasons for why there is not much participation by the price-responsive load (e.g., a lack of interest, difficulties in monitoring prices).  He also said that ex-post research is best for trying to understand consumer behaviour. 
  • A Luminant representative noted that DR efforts ought to be supported, but should not detract from other resource adequacy solutions.  The company believes that “loads in SCED” is one DR program that will help with price formation, and ought to be pursued (although the look-ahead part is not needed). 
  • The Texas Industrial Energy Consumers (TIEC) noted that loads want an ability to compete with generation, and would support cost-effective and technology-neutral efforts to achieve this goal.  (He also stated that TIEC supports Prof. Hogan’s proposal for the operating reserves demand curve.) 
  • Commissioner Anderson stated that he would like to see more DR, but Chairman Nelson clarified that she is interested in whatever is more economically efficient, including generation.  She indicated that “Texans like their AC” and would not want to give it up (earlier, a couple of commenters stressed the need to “attack” residential AC use).
  • At the end, Commissioner Anderson repeated his request for more information on how to move ERS into the DAM; Chairman Nelson asked for replies on DR proposals filed in Project No. 41061.

 

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