FERC’s new rule on compensation for demand resources tips the market balance toward negawatts. Arguably the commission’s economic analysis is flawed, and the rule represents a covert policy...
2008 Regulators Forum: Putting Efficiency First
New rate structures prioritize conservation, but will customers buy it?
Morgan (D.C.): The danger [of ratepayer backlash] is also a great opportunity. Already we’ve seen in a number of jurisdictions—Maryland is one that comes to mind—where largely because of the price spikes they experienced a few years ago, policy makers have been looking for solutions and now are planning to invest aggressively in both energy efficiency and DR, and to take advantage of advanced metering as a way to forestall further price increases. So we’ve actually seen even greater interest in these technologies because of price increases that already happened.
Butler (N.J.): Given the discussion America is engaged in, we’ve got to start showing people simple ways they can conserve, and then point out that improvements in the grid are a tool that will help them find ways to be more efficient.
We have less leeway this time around for failure. This is not simply experimenting. We really have got to get it right and be careful as to how we go into this, because this is pretty central to a reliable, successful, reasonably priced system. This is central to the game.