Demand Response for Reduced Electric Consumption: A Plan for the Nation

166 Pages·2013·2.014 MB·English

by  Adam R. Peterson

ENERGY POLICIES, POLITICS AND PRICES

D R
EMAND ESPONSE FOR
R E
EDUCED LECTRICITY
C
ONSUMPTION

A P N
LAN FOR THE ATION

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E P , P
NERGY OLICIES OLITICS
P
AND RICES

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ENERGY POLICIES, POLITICS AND PRICES

D R
EMAND ESPONSE FOR
R E
EDUCED LECTRICITY
C
ONSUMPTION

A P N
LAN FOR THE ATION

ADAM R. PETERSON
EDITOR

New York
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CONTENTS

Preface vii
Chapter 1 National Action Plan on Demand Response 1
Federal Energy Regulatory Commission Staff
Chapter 2 Implementation Proposal for the National Action
Plan on Demand Response 117
U.S. Department of Energy,
Federal Energy Regulatory Commission
Index 149

PREFACE

Demand response is a valuable resource for meeting the nation‘s energy
needs. By lowering the peak demand for energy, demand response programs
reduce the need to construct new, expensive generation units. However,
according to a Federal Energy Regulatory Commission (FERC or
Commission) staff report — A National Assessment of Demand Response
Potential (National Assessment), submitted to Congress in June 2009 —
current demand response programs tap less than a quarter of the total market
potential for demand response. The FERC staff has worked with stakeholders
to develop a National Action Plan on Demand Response (National Action
Plan), which sets out actions to achieve the demand response potential in the
United States. Congress required the FERC to develop such a plan in the
Energy Independence and Security Act (EISA) of 2007. Because current
efforts have missed a significant portion of the cost-effective demand response
potential, it is evident that action needs to be taken to either create new
programs or expand existing ones where cost-effective. This book provides an
overview of the National Action Plan, the process behind its development, and
context for understanding it.
Chapter 1 – The Federal Energy Regulatory Commission (FERC or
Commission) is required to develop the National Action Plan on Demand
Response (National Action Plan) as outlined in section 529 of the Energy
Independence and Security Act of 2007 (EISA), entitled ―Electricity Sector
Demand Response.‖ This [National Action Plan is designed to meet three
objectives:
viii Adam R. Peterson
1. Identify ―requirements for technical assistance to States to allow them
to maximize the amount of demand response resources that can be
developed and deployed.‖
2. Design and identify ―requirements for implementation of a national
communications program that includes broad-based customer
education and support.‖
3. Develop or identify ―analytical tools, information, model regulatory
provisions, model contracts, and other support materials for use by
customers, states, utilities, and demand response providers.‖

The National Action Plan is intended to be an action plan for the nation
for implementation by states, localities, and regions. Although its actions
apply to the entire country, the National Action Plan recognizes, as Congress
intended, the important role that state and local governments play in
developing demand response. The coordinated efforts of federal, state, and
local lawmakers and regulators are needed to enable achievement of the
nation‘s demand response potential.
To develop an action plan for the nation, FERC staff solicited and
accepted input and participation from a broad range of industry stakeholders;
local, state, and federal governing officials including state regulatory utility
commissioners; and nongovernmental groups including trade associations.
FERC staff conducted extensive outreach to a broad range of entities and used
the input to develop A Discussion Draft on Possible Elements for the National
Action Plan for public comment. A nationally webcast technical conference
was held to encourage further input and participation from all interested
entities. After the conference, written comments were accepted by the
Commission. A draft of the National Action Plan was prepared after reviewing
the many ideas that reflect the diverse views of a broad range of entities. This
National Action Plan reflects comments received on the Draft for Comment of
the National Action Plan.
Chapter 2 – The staff of the Federal Energy Regulatory Commission
(FERC) and the U.S. Department of Energy (DOE) developed this
implementation proposal as required by section 529 of the Energy
Independence and Security Act of 2007 (EISA). In particular, this proposal
complies with EISA‘s mandate ―to submit to Congress a proposal to
implement the [National] Action Plan [on Demand Response], including
specific proposed assignments of responsibility, proposed budget amounts, and
any agreements secured for participation from State and other participants.‖
Preface ix
The objective of the proposal is to implement the National Action Plan
to achieve the nation‘s demand response potential. FERC staff and DOE
believe that every element of the National Action Plan serves an important
part in achieving this potential. This proposal recognizes, however, that it
will take public and private actors to effectuate the Plan and, as a result, not
every element of that plan may be implemented. As such, this
implementation proposal identifies areas where FERC staff and DOE can
leverage existing initiatives related to demand response to implement the
National Action Plan. At the same time, it recognizes and encourages non-
federal government entities to become involved in implementing the
National Action Plan through participation in a coalition, or any private or
non-federal governmental organizations. FERC staff‘s primary role with a

coalition, or any private or non-federal governmental organizations, will be
to monitor, consult with, and provide recommendations regarding the
implementation of the National Action Plan. A coalition, or any private or
non-federal governmental organizations, should consider the viewpoints of a
broad range of demand response stakeholders and private sector
organizations. Action under this proposal will not require any new federal
appropriations.