The future is now: Energy efficiency, demand response and advanced metering

Mark Lynch

The New York Independent System Operator (NYISO) sponsored a symposium entitled “The Future is Now: Energy Efficiency, Demand Response and Advanced Metering” on June 27, 2007 in Albany, the capital of New York State.
More than 200 participants attended the event, which featured remarks from government and private sector leaders. Following are excerpts from the opening remarks of Mark S. Lynch, President and CEO of the NYISO

The NYISO has responsibility for the safe and reliable operation of state’s bulk electricity grid and the fair and open administration of New York’s wholesale electricity markets. We play an integral role in assisting New York State to achieve its energy policy goals and we are pleased to host this event as part of that effort.

Governor Eliot Spitzer has heightened attention to the importance of energy efficiency in New York State with his “15×15” Clean Energy Strategy. It includes a 15 percent reduction from forecasted levels of electricity use by the year 2015.

Consistent with the Governor’s strategy, the New York State Public Service Commission (PSC) has initiated a proceeding to establish an Energy Efficiency Portfolio Standard that will “establish targets for energy efficiency, similar to the existing Renewable Portfolio Standard, and other programs, intended to reverse the pattern of increasing energy use in New York.”

As New York State strives to make more efficient use of electricity, it is important to understand that the system of supplying electricity is based on the need to be ready and able to meet peak demand. Last year, New York State’s average hourly demand for electricity was 18,523 MW. On August 2, 2006, New York State reached a new record peak demand of 33,939 MW – 80% higher than the state’s average.

The costs of being prepared to serve the peak – in terms of both economic and environmental impacts – are immense. To address these costs, more and more attention is being paid to energy efficiency, demand response and advanced metering.

There are very real synergies among these topics. Demand response programs can help to identify non-essential or inefficient energy use that may be alleviated by energy efficiency measures. Technologies used to enable demand response can likewise serve energy efficiency. Experience gained by participation in demand response can result in better overall awareness of consumption patterns and lead to adoption of energy efficiency measures.

Since the NYISO began operating in 1999, we have recognized the value of integrating demand response into our markets. We have worked with Market Participants, state and federal governments, and others to develop what many regard as the most advanced markets for demand resources in the U.S.

During peak demand periods, the NYISO’s Demand Response Programs have proven to be a major contributor to maintaining grid reliability and to the stability of our markets.

Last summer’s heat waves tested New York’s bulk electric system and we met the challenge. Demand response provided voluntary load reductions on six occasions, five of them to address concerns in the New York City area. On August 2, 2006, when New York achieved a new record peak of 33,939 MW, the NYISO’s Demand Response Programs supplied almost 1,000 MW of load reduction. Over the course of last summer, demand-side management efforts provided nearly 16,500 MW hours of load reduction – more than in any previous summer.

The NYISO’s experience is a good illustration of the way demand response has grown in the electricity markets operated by ISOs and RTOs across North America. Demand response programs totaling more than 24,900 MW have been established by the 10 ISO/RTO markets in the U.S. and Canada. At the federal level, the Energy Policy Act of 2005 made demand response part of U.S. energy policy, which is being actively addressed by the Federal Energy Regulatory Commission (FERC). Many organizations that support energy efficiency and renewable power have recognized the value of open markets in fostering innovation.

Energy efficiency is environmentally prudent, economically sensible, and increasingly vital to the Empire State’s energy future.

Mr. Lynch’s complete remarks and other speeches and presentations provided to the NYISO for the symposium are available in the document "NYISO Symposium – The Future is Now" at the link below.