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Demand Response & Reliability: Follow the Fed Model

Regional demand resource banks, based on the Federal Reserve Bank system, would make for greater use of customer demand response mechanisms while ensuring long-term resource adequacy.
Fortnightly Magazine - May 1 2003

this resource. They would have to consider only how the resource best interacts with their responsibilities. Energy companies could contract with the bank to cover any resource requirements, and even regional generating companies might purchase seasonal call agreements with the bank as an alternative to agreements with other generating companies.

In the hopes of expediting the transition to functional competitive electricity markets, we encourage FERC to incorporate whatever facilitating mechanisms it feels comfortable with into the SMD to enable market-driven solutions to moderate the electricity supply/demand balance. Such mechanisms would certainly provide opportunities for concepts like regional demand response resource banks to play a valuable role in these markets, by helping ensure long-term resource adequacy. These banks would do so by providing financial storage by way of appropriate demand response investments for an electricity system that has no good physical storage capability.

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