Meeting #36: Impact of Changing Regulations on Demand Response

Tuesday, December 9, 2014
10:00am – 3:15pm
Federal Energy Regulatory Commission (FERC)
888 First St., NE
Washington, DC
Room 3M-2A/2B


Demand response (DR) existed as a distributed resource long before it was the subject of federal regulatory proceedings. Nevertheless, tremendous growth in DR over the past decade, especially in the PJM footprint, has been facilitated by regulatory decisions. For this meeting, we looked at some recent and upcoming regulatory changes that may significantly affect the value proposition for DR in PJM and elsewhere.


9:30 – 10:00am
Networking with attendees

10:00 – 10:15am
The Honorable Lawrence Brenner, Maryland Public Service Commission
John Shenot, Regulatory Assistance Project

10:15 – 11:45am
Impact of PJM Capacity Performance Proposal on Demand Response 
Stu Bresler, VP, Market Operations, PJM: PJM’s Capacity Performance Proposal and Impacts on Demand Response
John Moore, Sustainable FERC Project/NRDC: Sustainable FERC Project Overview
Michael Hogan, Regulatory Assistance Project: PJM’s Capacity Market Reform: A Retreat from Evolution to Expediency
Jim Wilson, Wilson Energy Economics

PJM is initiating an accelerated stakeholder process focused on RPM reforms targeted at capacity resource performance assurance. The events this past winter, including the high levels of forced outages of 22% or 40,200 MWs of PJM capacity have resulted in significant reliability concerns especially as more power plants are retired. PJM’s proposal focuses on capacity performance and how that is defined in terms of expectations for availability. PJM is seeking reliably available capacity that is capable of responding when required. While the proposal appears focused on the poor performance of generators during the Polar Vortex, the impact of the proposal on Demand Response (DR) resources is also at issue. Our panelists discussed the PJM proposal, the performance of DR resources, and the possible impact of the PJM proposal on DR resources.

11:45am - 12:15pm
Wholesale Market DR Opportunities in the Wake of the EPSA Decision
Pete Langbein, PJM

PJM discussed potential options to implement the concepts provided in a paper posted on October 7, 2014, “The Evolution of Demand Response in the PJM Wholesale Market”, and highlighted areas where the retail regulatory authorities may consider actions to foster DR participation in the wholesale market. This discussion was not intended to address the merits and challenges of the legalities involved with the EPSA case challenging FERC Order 745, but focused on possible next steps for continued, long-term DR participation in PJM markets as a follow-up to the concepts previously outlined.

12:15 - 1:30pm

1:30 – 3:00pm
Demand Response and the Clean Power Plan 
The Honorable Kelly Speakes-Backman, Maryland Public Service Commission
Dan Delurey, Association for Demand Response & Smart Grid
Reid Harvey, U.S. Environmental Protection Agency
Ricky Gratz, Opower

US EPA proposed a first-of-its kind regulation of greenhouse gas emissions from existing power plants in June 2014 as part of its “Clean Power Plan.” Crafted under authority granted to EPA by section 111(d) of the Clean Air Act, this “111(d) rule” would establish emissions targets for each state, but would give states an unusual amount of flexibility in determining how to meet those targets. The panelists talked about how demand response might be used to help states reduce power sector emissions and comply with the 111(d) rule.

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