Significant progress in demand response, advanced metering in U.S.

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Joseph T. Kelliher,
Chairman, FERC
 
Washington, DC, U.S.A. — (METERING.COM) — December 30, 2008 – Both advanced metering penetration and potential peak load reduction from demand response have increased significantly in the United States since 2006, according to the Federal Energy Regulatory Commission’s (FERC) latest review charting the expansion of these energy saving programs.

In addition there has been significant activity to promote and to remove the barriers to demand response.

The report, 2008 Assessment of Demand Response and Advanced Metering, indicates that advanced metering penetration has reached about 4.7 percent in the U.S. – up from less than one percent in 2006 – with more than 6.7 million AMI meters in use.

Increases have occurred in nearly all the regions, with the largest penetration of 10.4 percent recorded in peninsular Florida, followed by the ERCOT region with 9 percent. In the Florida region adoption of advanced metering by municipal utilities accounts for the largest increase, and three utilities account for the majority of use – JEA (the large municipal utility serving Jacksonville), Lee County Electric Cooperative (a large cooperative), and Florida Power and Light (a large investor-owned utility). The increase in ERCOT is primarily due to activity by investor-owned utilities and cooperatives, and advanced metering deployment by Oncor (a large investor-owned utility in Texas) accounts for 77 percent of the increase.

At the state level the states with highest penetration of advanced metering are Pennsylvania on 23.9 percent, Idaho on 13.8 percent and Arkansas on 11.3 percent. Pennsylvania also had the largest increase, up from 0.3 percent in 2006, due to the installation of a full AMI system at PPL since the 2006 survey. The high penetration in Idaho is due primarily to investor-owned utility activity, while in Arkansas it is due to cooperatives.

The survey indicates that about eight percent of customers in the U.S. are now in some kind of demand response program. The potential demand response resource contribution from all U.S. demand response programs is estimated to be close to 41,000 MW, or about 5.8 percent of U.S. peak demand. The regions of the country with the largest demand response contributions are the Mid-Atlantic, Midwestern, and Southeastern United States.

In the past year, several states such as Colorado, Maryland, and Ohio have promoted demand response through legislation and utility regulation. Other states, such as Alabama and California, approved time-based rates for customers under their jurisdiction. In addition, multi-state groups spanning the country from the Mid-Atlantic to the Midwest and Pacific Northwest continue to coordinate across jurisdictions to enhance demand response through research, education, and planning.

States and the federal government have also acted to remove regulatory barriers limiting customer participation in demand response, peak reduction, and critical period pricing programs. Ten states have adopted policies that decouple changes in utility revenue with changes in sales volume.

Nevertheless, many obstacles remain. One is the limited number of retail customers on time-based rates. Another is restrictions on customer access to meter data, making information retrieval for customers and independent aggregators time consuming and expensive. There is also an increased need to accurately measure load reductions so as to ensure confidence in the ability of demand response providers to actually provide demand response service when needed. Government and industry have begun programs to address most of these barriers, but significant work remains to be done.

“It is good to see the numbers behind the progress we know is being made on these demand response and advanced metering fronts,” said FERC chairman Joseph T. Kelliher commenting on the report.