On September 17, 2009, FERC issued a Notice of Proposed Rulemaking (“NOPR”) on standards for measuring and verifying the performance of demand response services.  The proposed rule would lay the groundwork for expanding the use of demand response in organized wholesale markets.

On March 16, 2009, the North American Energy Standards Board (“NAESB”) adopted its initial set of business practice standards for the measurement and verification of demand response products and services (NAESB Phase I M&V Standards) in organized wholesale markets administered by regional transmission organizations (“RTOs”) and independent system operators (“ISOs”).  At a later date, NAESB will release Phase II detailing more technical and ISO/RTO specific standards. 

The NOPR seeks to incorporate, by reference, the initial set of business practice standards.  The proposed rule includes standards for energy services, capacity services, regulation services and reserve services.  The rule also categorizes these services, and requires system operators to publish details of how they will measure and verify their performance. 

The NOPR follows the September 10, 2009 release of the Commission’s fourth annual Demand Response and Advanced Metering Report.  The report estimates the potential for demand response, both nationally and for each state, through 2019 under four scenarios. The report projects that the potential for peak electricity demand reductions across the country in 2019 is between 38 GW and 188 GW, depending on how extensively demand response is applied under various assumptions. 

The report also summarizes demand response programs in the various RTOs/ISOs and individual states.  It concluded with a list of recommendations for addressing regulatory barriers to improve customer participation in demand response.  The recommendations made to address these barriers include:

  • sharing of information on effective program designs;
  • increasing customer awareness of and education about demand response programs;
  • coordinating wholesale and retail demand response strategies;
  • improving and expanding interoperability and open standards;
  • coordinating demand response and energy efficiency policies; and
  • articulating clearly the role of demand response in operational and long-term planning, and the recovery of associated costs.

The NOPR is available at: http://www.ferc.gov/whats-new/comm-meet/2009/091709/E-1.pdf

 The Demand Response and Advanced Metering report is available at: http://www.ferc.gov/legal/staff-reports/sep-09-demand-response.pdf.