Meeting #35: Demand Response Programs in a Changing Market Environment

Tuesday, September 9, 2014
10:00am – 3:15pm
Baltimore Gas and Electric Company (BGE)
110 W. Fayette Street
Baltimore, MD


Topic

Demand response (DR) programs play an important role in the operation of the PJM market, helping to ensure reliability and reasonable wholesale prices, and mitigating retail customers’ costs. In fact, PJM is said to be the largest market for DR in the world. However, the conditions that led to the growth of this DR market are not static. PJM market rules have evolved, and now a federal court decision is creating uncertainty about whether wholesale markets like PJM can compensate DR providers at all. This meeting of the MADRI working group focused on the status quo and future for DR programs in light of these market and regulatory changes.


Agenda

9:30 – 10:00am
Networking with attendees

10:00 – 10:15am
Introductions
The Honorable Lawrence Brenner, Maryland Public Service Commission
Janine Migden-Ostrander, Regulatory Assistance Project

10:15 – 11:15am
DC Circuit Court Decision on FERC Order 745 
Scott Hempling, Attorney at Law LLC

Mr. Hempling laid the groundwork for this discussion by reviewing the content of Order 745, the DC Circuit Court Decision vacating Order 745, and the status of any relevant appeals or relevant ongoing litigation. The purpose of this part of his presentation was to give all attendees a common understanding of the legal status quo for DR programs in competitive wholesale markets; the purpose was not to debate the merits or legality of Order 745 or the Circuit Court’s decision. Mr. Hempling then suggested some possible paths forward for state regulators. All attendees were encouraged to read Mr. Hempling’s four-page essay, D.C. Circuit Kills Demand Response Compensation: Now What?, in advance of the meeting.

11:15am - 12:30pm
What are the Ramifications of Life without Order 745? 
Denise Foster, PJM
Rick Counihan, EnerNoc
The Honorable Lawrence Brenner, Maryland Public Service Commission

Assuming the DC Circuit Court decision on Order 745 takes effect, what might the impacts be for DR programs in PJM? This panel offered different perspectives on that question from three different parties. The focus was on solutions and redefining how DR can play a role in the PJM market.

12:30 - 1:30pm
Lunch

1:30 – 3:00pm

Impacts of Changes to DR Product Categories in PJM Market
David Scarpignato, Direct Energy Services: Impacts of Changes to DR Product Categories
Bruce Campbell, Johnson Controls: PJM DR Operational Changes
Steve Sunderhauf, PHI

In 2013, PJM changed its market rules creating new categories of DR resources. This panel explored the impact that these rule changes are having on market participants. Some of these rule changes include: a requirement that DR entities with few exceptions respond within 30 minutes; a reduction in the minimum run time from two hours to one; and, a cap on the quantity of Limited and Extended Summer demand response that clears in the annual base capacity auction; among other measures.

3:00 – 3:15pm
Wrap-Up, Adjournment
The Honorable Lawrence Brenner, Maryland Public Service Commission
John Shenot, Regulatory Assistance Project


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