Demand Response Policy Roundup

An “Assessment of Demand Response and Advanced Metering” prepared by the Federal Energy Regulatory Commission (FERC) highlights developments in retail demand response and time-based pricing activities since the agency’s 2013 report.

• California. In a September 2013 Order Instituting Rulemaking, the California Public Utilities Commission launched a proceeding to consider several changes to demand response programs in the state, including dividing current utility demand response programs into demand-side and supply-side resources, creating a competitive procurement mechanism for supply-side demand response resources, and determining funding and procurement processes for programs.

• Hawaii. In April 2014, the Hawaii Public Utilities Commission released four orders that “provide major policy, resource planning, and operational directives to the Hawaiian Electric Company (HECO)” and strategic guidance for modernizing the electric system in the state.

• Maryland. In the summer of 2013, Baltimore Gas and Electric delivered its new Smart Energy Rewards program to 315,000 customers with advanced meters. The program provides a rebate for reducing energy use during times of highest demand along with personalized energy savings tips, communication through multiple channels, immediate feedback on individual results, and comparisons with similar households.

• Massachusetts. In June 2014, the Massachusetts Department of Public Utilities (MA DPU) issued an order proposing a framework for time-varying rates, concluding that such rates are essential to meeting the state’s grid modernization goals and supporting state energy and environmental policies. Under the proposed framework, electric distribution companies in the state would be required to offer two time varying rates as their basic service products to all rate classes: (1) default time of use pricing with a critical peak pricing component, and (2) an option for a flat rate with a peak time rebate.

• New York. In April 2014, the New York Public Service Commission opened the Reforming the Energy Vision (REV) proceeding to consider how to align electric utility practices and the state’s regulatory framework with technological advances in information management and power generation and distribution.

• Pennsylvania. In a February 20, 2014 order, the Pennsylvania Public Utilities Commission proposed a new methodology for setting peak reduction targets under Act 129, based on the Statewide Evaluator’s conclusion that programs under the current method are not cost-effective, even when including benefits from price suppression in the wholesale markets.

• Rhode Island. The Rhode Island Public Utilities Commission approved National Grid’s proposal to continue its Load Curtailment Pilot in the Tiverton/Compton Area, which tests whether demand response can manage local distribution capacity requirements during peak periods.

• Texas. Development of retail demand response continues in Texas. CPS Energy in San Antonio, in partnership with Honeywell, will offer a new automated demand response (ADR) program to its commercial and industrial customers. Based on pilot program achievements, the full-fledged program is expected to be the largest ADR program offered by a municipal utility, if the target of 6 MW of potential reduction is realized.

• Virginia. Dominion Virginia Power is conducting an ongoing dynamic pricing pilot, approved by the State Corporation Commission in 2011 and expanded and modified in 2013. The pilot allows a limited number of residential and small and medium commercial customers to voluntarily enroll in dynamic rate plans that divide the year into high-, medium-, and low-priced days, and have a different number of pricing periods (i.e., on-peak/off-peak or on-peak/shoulder/off-peak) each day, depending on the time of year.