It's as significant for what it does not do as for what it does.
Order 888 marks a significant, yet limited, step in deregulating the U.S. electricity supply industry. Most...
- are truly technology neutral. In addition, the councils should publish the results of the engineering and economic analyses used to justify these standards and rules.
- Make Rules Technology-Neutral. The NPCC requirements (see Table 2) were designed to accommodate typical generating units and are likely unsuitable for demand resources that might fully satisfy appropriate reliability requirements. For example, NPCC offers no justification for the 60-minute minimum duration of reserves. Longer duration may improve reliability, but it also raises costs and limits the number and type of resources that can provide reserves.
Where, one might ask, are the data and analysis showing the economic costs and benefits of different duration times? (Or, for that matter, the other parameters shown in Table 2?)
The rules should recognize the technical differences between reserves provided by large resources (whose expected performance is generally deterministic) and small resources (whose expected performance is generally statistical). The rules also should accommodate resources whose availability and size varies, especially for those resources where the variability is positively correlated with system load (in particular, weather-sensitive loads). These rules should address the reliability requirements associated with speed of response, duration of response, and speed of restoration.
- Examine Metering Rules. The ISOs should review the requirements they impose on resources that provide contingency reserves with respect to the frequency of metering output (or consumption) and the frequency with which these megawatt values are communicated to the ISO's control center.
- Lengthen Intervals for Reporting. The four-second recording and reporting requirement imposed on generators is probably not needed for retail loads that provide contingency reserves, primarily because of the much smaller size of these demand resources. It may be sufficient for large loads to record load data at the one- or five-minute level for 10-minute reserves and the five- or 10-minute level for 30-minute reserves and then report results to the ISO at the end of each month for verification and billing purposes.
For small load resources, such as residential water heaters, it should be sufficient to carefully meter only a small fraction of the loads and then scale up to the population of participating loads. In both cases, there may be no reliability reason to report performance results to the ISO in near real time; it may be sufficient to provide such data at the end of each month for billing and settlement purposes.
- Assess Load Characteristics. ISOs, distribution utilities, and state energy offices and regulatory commissions should work together to characterize the potential demand resource for reserves in each region. This assessment would examine opportunities in the residential, commercial, and industrial sectors to see which customers and which end uses are suitable for the provision of contingency reserves. This characterization also would examine the seasonal characteristics of different loads, their storage capabilities, the speed with which the load can be interrupted and rearmed (restored), and the costs of the necessary metering and communications equipment. The resulting estimates of resource potential will be a function of reliability and market rules as well as the payments to retail loads for provision of reserve services.
- Encourage Demand