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EPSA Calls On FERC To Address Demand Response Compensation Concerns
The Commission should heed the interpretation of the independent operators of wholesale energy markets over the interpretation put forward by many DR providers, who stand to receive substantial, windfall profits in the form of subsidized over-payments under an expansive reading of Order No. 745's scheme.
WASHINGTON, D.C. - The Electric Power Supply Association (EPSA) has filed comments with the Federal Energy Regulatory Commission (FERC) on all six Independent System Operator/Regional Transmission Operator (ISO/RTO) compliance filings submitted to implement the flawed Demand Response (DR) compensation rule. EPSA's comments address general concerns that should be addressed in all of the ISO/RTO markets, and stem from insufficiencies present in FERC's Order No. 745 on DR compensation. Based on these concerns, EPSA asks FERC to first address the issues raised in numerous rehearing motions on the Order and to suspend ISO/RTO compliance before more resources are spent on compliance with a rule that may change substantially upon reconsideration.
EPSA's filing states, "Clearly there are disagreements on the impacts of Order No. 745 and the implementation thereof in the instant ISO/RTO compliance filings on markets, consumers, the economy and even the environment. This is one of the many reasons why EPSA urged the Commission not to issue any final rule or regulation before it had addressed the many concerns and open questions that were raised by EPSA and others in their comments on the NOPR. These questions and concerns were either not addressed at all, or not addressed adequately, in the Final Rule."
In particular, numerous protests to ISO/RTO provisions regarding changes to DR self-scheduling options, enhancements to measurement and verification (M&V) tools and baseline calculations, and reliance on Behind the Meter Generation (BTM Generation) as a DR product all raise serious concerns about the willingness of some who would provide DR to the market to be held accountable to comparable requirements and obligations.
"[P]rotests in these compliance proceedings underscore the fact that [certain DR providers]...are seeking preferential treatment by arguing that DR must receive higher compensation for providing a product that is ostensibly comparable to that provided by generation, without being willing to make any concomitant changes to ensure that DR is actually comparable.... The Commission should heed the interpretation of the independent operators of wholesale energy markets over the interpretation put forward by many DR providers, who stand to receive substantial, windfall profits in the form of subsidized over-payments under an expansive reading of Order No. 745's scheme."
While supporting economically efficient DR, EPSA's comments highlight the inadequacies of the ISO/RTO compliance filings and the serious questions posed by them. EPSA's comments note, "[Several] stakeholder comments pose critical questions for the implementation of Order No. 745, and argue for the Commission to hold all of the ISO/RTO compliance proceedings in abeyance in order to first fully address the insufficiencies and issues raised on rehearing of the Final Rule before implementation is required by the ISOs/RTOs. Both the details and the very foundation of the Final Rule remain in question, as highlighted by the compliance proceedings and the numerous implementation issues raised therein."
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.