Demand Response Compensation, Net Benefits and Cost Allocation: Comments

FERC's Supplemental Notice of Public Rulemaking addresses the question of proper compensation for demand response in organized wholesale electricity markets. Assuming that the Commission would proceed with the proposal “to require tariff provisions allowing demand response resources to particip...

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Bibliographic Details
Published in:The Electricity journal 2010-11, Vol.23 (9), p.19-24
Main Author: Hogan, William W.
Format: Article
Language:English
Subjects:
ALLOCATIONS
Compensation
COST
Cost engineering
Demand
ELECTRIC POWER
Electricity
Energy consumption
ENERGY PLANNING, POLICY AND ECONOMY
ENERGY POLICY
Marketing
Markets
REGULATIONS
TIME-OF-USE PRICING
US FERC
WHOLESALE PRICES
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Description
Summary:FERC's Supplemental Notice of Public Rulemaking addresses the question of proper compensation for demand response in organized wholesale electricity markets. Assuming that the Commission would proceed with the proposal “to require tariff provisions allowing demand response resources to participate in wholesale energy markets by reducing consumption of electricity from expected levels in response to price signals, to pay those demand response resources, in all hours, the market price of energy for such reductions,” the Commission posed questions about applying a net benefits test and rules for cost allocation. This article summarizes critical points and poses implications for the issues of net benefit tests and cost allocation.
ISSN:1040-6190
1873-6874
DOI:10.1016/j.tej.2010.10.002