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EPSA Pleased Diverse Parties Share Concerns Over Demand Response NOPR
WASHINGTON, D.C. - The Electric Power Supply Association (EPSA) today filed detailed reply comments with the Federal Energy Regulatory Commission (FERC) on demand response (DR) compensation highlighting the comments from an extensive array of stakeholders sharing EPSA's concerns. These other parties include policymakers, consumer interests and independent experts. EPSA stressed that the record established in response to the Commission's Notice of Proposed Rulemaking (NOPR) on how to compensate demand response in organized wholesale markets raises numerous serious concerns regarding subsidizing DR through payment of the full locational marginal price (LMP) in all hours.
EPSA and an impressive array from among nearly 130 commenting parties fully support participation by DR in the wholesale energy markets, but agree that the uneconomic subsidization for DR in FERC's proposal could lead to negative consequences for consumers and markets. Unfortunately, in some comments filed at FERC by those who would benefit from the subsidies under consideration in the NOPR, the discussion over compensation has been mischaracterized as "us versus them" - those who are "for" DR and those who are "against." This is not the case. EPSA noted in today's reply comments, "The record that has been established in response to the NOPR is helpful in achieving the laudable goal of DR's participation in the wholesale markets, and should be instructive for finding practical solutions that will not create negative unintended consequences."
EPSA President and CEO John E. Shelk said, "EPSA is heartened by the extensive response from a chorus of diverse stakeholders, many of whom share our fundamental concerns. Unfortunately, the brief NOPR and comments which support it do not offer any evidence that subsidized DR is needed to ensure the competitiveness of organized markets that independent market monitors have confirmed are already competitive."
Among the issues raised by an extensive array of commenters that EPSA stresses in its reply comments are:
(1) The DR compensation proposal is not necessary to ensure the competitiveness and efficiency of the ISO/RTO markets.
(2) While one megawatt of demand is not equal to one megawatt of supply, for purposes of allowing DR to bid in to energy markets as a resource, all market rules, mitigation, obligations and requirements must apply to DR as well as to supply.
(3) A rule establishing a standard compensation for DR must also address measurability and verification requirements, and should reflect suggested changes including an offset and thresholds for participation.
(4) The Commission lacks jurisdiction to set just and reasonable rates for DR.
CONTACT: JOHN SHELK
(202) 349-0154or 703-472-8660
EPSA is the national trade association representing competitive power suppliers, including generators and marketers. These suppliers, who account for nearly 40 percent of the installed generating capacity in the United States, provide reliable and competitively priced electricity from environmentally responsible facilities serving global power markets. EPSA seeks to bring the benefits of competition to all power customers.