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Special Section On Metering: Needed in New England: Stronger Market Connections, Savvier Electricity Usage

The region’s retail and wholesale electricity markets should be linked via dynamic pricing.
Fortnightly Magazine - April 2006

retail policies and rate structures that would support the implementation of dynamic retail pricing. They have the instruments that can forge the links in the chain.

We highly recommend that the states should:

• Establish a region-wide process to coordinate the investigation of dynamic pricing and advanced metering;

• Develop policy objectives and determine the common policy questions and issues to be raised and resolved in individual state proceedings;

• Respond to issues raised by industry stakeholders, with the goal of maximizing benefits and standardizing approaches to improve economies of scale;

• Seek technical assistance from the U.S. Department of Energy through the NECPUC to support regional coordination efforts; and

• Report on the findings of the individual state proceedings.

Notwithstanding the benefits of current price-based demand-response programs being implemented by ISO New England, they were never intended to be a permanent part of the wholesale market. Rather, the programs were intended to be a catalyst to jumpstart the demand-response industry in New England and encourage the development of price-responsive demand. The time has come to start the transition from the current economic demand-response programs to demand response that arises naturally through market-based retail pricing.

Endnotes:

1. CRA International, “ Impact Evaluation of the California Statewide Pricing Pilot,” California, 2005.

2. Demand Response Research Center, “Real Time Pricing as a Default or Optional Service for the C&I Customers: A Comparative Analysis of Eight Case Studies,” Lawrence Berkeley National Laboratory, California, 2005.

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