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...
DR design flaws create perverse incentives.
EL01-47-000, Mar. 14, 2001, at 11 (FERC).
5. NSTAR Services v. New England Power Pool , Docket No. EL00-83-005, ISO New England , Docket Nos. ER00-2811-005, ER00-2937-003, EL00-62-023, and ER00-2052-010, Order Accepting for Filing Proposed Market Rule Changes, May 18, 2001 (FERC); New York Independent System Operator, Order on Tariff Filing, Docket Nos. ER01-1740-00 and ER01-1740-001, May 16, 2001 (FERC); and PJM Interconnection, Order Accepting Tariff Sheets as Modified , Docket No. ER02-1326-000, May 31, 2002 (FERC).
6. Midwest Independent System Operator , Docket No. ER09-1049-002; Re Aggregators of Retail Customers, Oct. 2, 2009 (FERC); and California Independent System Operator , Docket Nos. RM07-19-000 and AD07-7-000, Compliance Report of the California Independent System Operator , Apr. 28, 2009 (FERC).
7. Gaming behavior has occurred in all of the Eastern ISOs’ economic demand response programs. See, Letter Order to New York Independent System Operator , Docket No. ER04-1188-000, Oct. 29, 2004 (FERC); ISO New England, Docket No. ER08-538-000, Filing of Changes to Day-Ahead Load Response Program, Expedited Comment Period and Consideration Requested , Feb. 5, 2008 (FERC); and PJM lnterconnection , Docket No. ER08-824-000, Revisions to the PJM Open Access Transmission Tariff and the PJM Operating Agreement , Apr. 14, 2008 (FERC).
8. Id., ISO New England.
9. PJM Interconnection, Statement of Terry Boston, president and CEO, on behalf of the PJM Board of Managers, Demand Response in the PJM Markets, June 26, 2009.
10. This definition is taken from the Midwest Independent System Operator’s proposal for implementing ARC participation in its energy markets. See, Midwest Independent System Operator, Id. , 6, at 13-16.
11. EnergyConnect Inc. Docket Nos. ER09-1307-000 & ER09-1307-001, Order Conditionally Granting Market-Based Rate Authorization and Providing Guidance, Jan. 19, 2010, (FERC).
12. An attorney representing a group of industrial customers advocates this scheme. See, Donald J. Sipe, “Defining the Product,” Attachment A to Comments of the Consumer Demand Response Initiative, Submitted in FERC Docket RM10-17-000, Demand Response Compensation in Organized Wholesale Energy Markets , May 13, 2010.
13. Comments submitted in FERC Docket RM10-17-000, Demand Response Compensation in Organized Wholesale Energy Markets , by ISO-New England, New York Independent System Operator, PJM Interconnection, Midwest Independent System Operator, and the California Independent System Operator.