ISO-NE seeks delay of demand response integration over FERC Order 745 legal worries
- ISO-New England has petitioned FERC to delay full implementation of demand response into wholesale markets, citing the U.S. Supreme Court's ongoing review of Order 745 and the resource's ability to compete in energy markets under the operator's current tariff.
- In addition to delaying implementation, the grid operator also proposed revising the methodology used to determine demand response baselines and modifying the simultaneous auditing requirements of demand response resources.
- The Supreme Court heard arguments last month centered on FERC's jurisdiction over demand response in wholesale markets. A decision, expected to be rendered next year, will have major implications for large markets looking to implement demand management.
A decision by the Supreme Court is not expected until next year and so the grid operator in New England, along with the New England Power Pool Participants Committee, have asked to delay "full implementation" of demand response into the region's wholesale markets.
By "full implementation," the grid operator said it means that demand response could fully participate in the day-ahead and real-time energy markets and would provide operating reserve and participate in the forward reserve market.
In addition to shoring up concerns about the timing of demand response in energy markets, the organizations responsible for ensuring reliability in the Northeast U.S. proposed another pair of changes
Changes to demand response baseline – the expected energy consumption of a demand response
asset – would be used to estimate the demand reduction achieved by the asset when it is dispatched to reduce consumption. And the groups want to modify auditing rules for real-time emergency generation resources and demand response, which assess the resource's capability to meet obligations.
The grid operator suggested modifying simultaneous auditing rules for Real-Time Demand Response and Real-Time Emergency Generation Resources. Under their plan, market participants with both these demand response and emergency generation resources would be able to audit their emergency assets by only disptaching the DR resources co-located with the emergency generation. If not, they would still be able to audit their emergency generation resources by simultaneously dispatching their entire fleet of real time demand response assets, along with the co-located ones, according to the Washington Energy Report from Troutman Sanders.
ISO New England proposed the delay and baseline be effective as of the end of 2015, with auditing changes set to take effect in June. The grid operator requested that FERC issue an order by Dec. 31.
- Troutman Sanders LLP ISO-NE and NEPOOL Seek to Delay Full Integration of Demand Response by One Year
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