Meeting #42: Demand Response and Price Responsive Demand in the Wake of the Supreme Court Decision Upholding FERC Order 745

Tuesday, May 24, 2016
10:00am – 3:15pm ET
Baltimore Gas and Electric Company (BGE)
110 W. Fayette Street
Baltimore, MD


Topic

In 2012, the Federal Energy Regulatory Commission (FERC) issued Order Number 745, which calls for grid operators like PJM to pay the full wholesale market price to cost-effective economic demand-response (DR) resources in real-time and day-ahead markets. The Electric Power Supply Association (EPSA) sued FERC, asserting that compensation for DR is a matter of retail rate regulation falling under the jurisdiction of state rather than federal regulators. The US Court of Appeals for the DC Circuit sided with EPSA and overturned the order. FERC appealed to the US Supreme who reversed the Appeals Court’s decision earlier this year. Order 745 is back in play.

With the challenge to Order 745 resolved, an era of legal uncertainty for all of the market players in the PJM footprint has ended. However, the roles that DR can play in wholesale and retail markets, and the details of market rules in PJM and other organized markets, are continually evolving. During this meeting, we explored the current state of play and future of DR products in the PJM footprint in the wake of the Supreme Court’s decision on FERC Order 745. This discussion included coverage of PJM’s Price Responsive Demand (PRD) program, which is similar to wholesale market DR products in some respects, but different in other respects.


Agenda

9:30 – 10:00am
Networking with attendees

10:00 – 10:15am
Introductions
The Honorable Betty Ann Kane, Chairman, DC Public Service Commission
John Shenot, Regulatory Assistance Project

10:00 – 11:30am
The State of Play of Demand Response and Price Responsive Demand in PJM

Pete Langbein, PJM: Current State of DR and Overview of PRD at PJM
Seth Frader-Thompson, EnergyHub: BYOT Demand Response
Kenneth Schisler, Enernoc
Dan Cleverdon, DC Public Service Commission Staff

We started the day with four presentations offering different perspectives on the state of play and current issues for DR products and the PRD program in PJM wholesale markets. This included among other topics a discussion of PJM's current policy of DR as a summer product only and the parameters of PJM's supervisory power. We received up-to-date information and heard varying perspectives on this topic from PJM, DR aggregators, and a state regulatory commission staff person.

11:30am – 12:30pm
Response Panel 
Marji Phillips, Direct Energy
Anne Hoskins, Maryland Public Service Commission
Bill Fields, Maryland Office of People's Counsel
Robert Borlick, Borlick Associates

The invited respondents offered their own reflections on the informational presentations. The goal was to present additional perspectives on the issues and ideas raised.

12:30 – 1:30 pm
Lunch

1:00 – 2:15pm
Exploring the Options for DR Products and PRD Programs in PJM
Open group discussion led by John Shenot, RAP

Everyone in attendance had an opportunity to ask questions of the presenters and responders and share their thoughts and ideas about DR and PRD in the PJM wholesale markets. This included exploring options, debating the pros and cons of various products and programs, or identifying principles that should guide future decisions regarding the integration of DR into the market.

3:00 – 3:15pm
Wrap-Up, Adjournment
The Honorable Betty Ann Kane, Chairman, DC Public Service Commission
John Shenot, Regulatory Assistance Project


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