Demand response efforts grow in U.S.


Jon Wellinghoff,
Washington, DC, U.S.A. — (METERING.COM) — September 10, 2007 – Demand response and advanced metering programs have grown significantly in the U.S. over the past year, according to a new Federal Energy Regulatory Commission (FERC) report.
Several states and individual utilities took actions to introduce more opportunities for demand response and price responsiveness, including the adoption of time-based rates and the adoption of demand response policies – and in the last year utilities announced new deployments of more than 40 million advanced meters between 2007 and 2010.

The report, “Assessment of Demand Response and Advanced Metering 2007,” updates a report of the same name published in August 2006, which contained a comprehensive nationwide survey of these activities, and has been prepared as a requirement of the Energy Policy Act of 2005 (EPAct 2005).

The report notes that demand reduction activities occur principally during the summer when electricity demand is highest in most regions, and that demand reductions from the demand response activities during the record-setting peaks that occurred in July and August of 2006 proved crucial to the reliable operation of electric markets, lowering system peaks between an estimated 1.4 and 4.1 percent on these peak days.

The report says that two important new developments over the past year at the wholesale level were the inclusion of demand resources in forward capacity markets and ancillary services markets at Regional Transmission Organizations (RTO) and Independent System Operators (ISO) and the development of new reliability-based demand response programs. The Commission actively encouraged organized wholesale power markets to use demand response as they would use generation where it is technically capable. It also addressed demand response in a number of orders addressing wholesale market design proposals filed by the various RTOs and ISOs.

Another trend highlighted in the report is that there was more attention to the development of a smart grid that can facilitate demand response. Moreover there was increased activity by third parties to aggregate retail demand response.

On advanced metering, the report notes the rise in the number of large utilities that are planning to install advanced metering in the next several years, and that several states have taken actions ranging from the approval of smart meter projects or advanced meter deployment and re-establishing collaborative efforts and workshops to issuing rulemakings.

AMI market activity, as measured by the number of meters planned or installed, increased nearly threefold from 2005 to 2006, and is projected to double again by 2008.

However, a number of issues and challenges remain, including technological obsolescence concerns, deployment decisions and interoperability and open standards.

Commenting on the report, Commissioner Jon Wellinghoff, who is leading the Commission’s efforts in the Collaborative Dialogue on Demand Response with the National Association of Regulatory Utility Commissioners, said: “The findings signal that there has been a change in the national demand response dialogue from should we do it, to how we do it.”