NAESB Measurement and Verification Model Business Practice Retail Electric Demand Response

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NAESBMeasurement and Verification Model Business
PracticeRetail Electric Demand Response

• NARUC update 9/14/09

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Approach for Retail Standard

• Determine that the RTO draft recommendation could
  apply to the retail draft recommendation with
  proper wording changes
• Determine that the RTO draft recommendation
  provides a framework for the retail draft
  recommendation but more detail is necessary
• Determine that the retail draft recommendation
  needs to be more prescriptive than the wholesale
  draft recommendation.

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Model Business Practice

• Measurement and Verification (MV) standards are
  intended to facilitate Demand Response in retail
  electricity markets by providing a common
  framework for the following
• Transparency accessible and understandable MV
  requirements for Demand Response products
• Accountability criteria that will enable the
  Program Administrator to accurately measure
  performance of Demand Response resources
• Consistency standards applicable across retail
  electricity markets
• Comprehensive strives to cover all forms of
  Demand Response

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APPLICABILITY
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Coordination

• Worked closely with
• Wholesale standards group to maintain
  consistency with current approved standard
• NERC to insure consistency with reliability
  standards
• AEIC as they develop load research standards with
  regards to MV
• Industry groups and Market Participants involved
  in providing or evaluating demand response
  programs such as EPRI EnerNoc Comverge
  GoodCents

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Scope

• Limited to Demand Response programs only
• Does not include Measurement and Verification of
  energy efficiency programs or for permanent load
  reductions.
• Confined to the retail markets. If a utility has
  programs that are bid into and operate in the
  wholesale markets then the wholesale standard
  will take precedence.
• Standards are voluntary across state
  jurisdictions. They can be adopted by individual
  state regulators
• Program Administrator has significant flexibility
  to adopt more stringent requirements in most
  areas to meet regional needs.

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Product Categories

• Wholesale group developed model business practice
  for each of 4 Product types
• Energy Services
• Capacity Services
• Reserve Services
• Regulation Services
• Retail group is developing one model business
  practice to cover all Demand Resource products in
  the retail space

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Performance Evaluation

• A performance evaluation methodology is used to
  determine the Demand Reduction Value provided by
  a Demand Resource. The standards include
  descriptions of acceptable Baselines and
  alternative performance measurements.
• Maximum Base Load
• Meter Before / Meter After
• Baseline
• Metering Generator Output

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Definition of Terms

• Definition of Terms was developed to clarify
  specific meanings of terms while providing
  consistency and conformance where possible to
• Wholesale Standard
• FERC
• NERC
• AEIC
• Worked through the NAESB glossary committee to
  adopt definitions

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Demand Response Event Timing
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Key Definitions

• Demand Resource A Load or aggregation of Loads
  capable of measurably and verifiably providing
  Demand Response.
• Demand Response Changes in electric use by
  demand-side resources from their normal
  consumption patterns in response to changes in
  the price of electricity or to incentives
  designed to induce lower electricity use at times
  of high cost periods or when system reliability
  is jeopardized.
• Program Administrator An investor-owned
  governmental or cooperative utility with the
  responsibility for developing and operating
  Demand Response programs

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Key Definitions

• Baseline A method of estimating the electricity
  that would have been consumed by a Customer or
  Demand Resource in the absence of a Demand
  Response Event. It may be calculated using
  interval metering and/or statistical sampling
  techniques.
• The following figure illustrates the concept of
  Baseline relative to a Demand Response Event.

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Baseline Conceptualization
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Next Steps

• Completed formal comment period August 28th
• Single topic review session planned for
  September 25th.
• Allows Executive Committee members and interested
  industry participants to discuss recommendation.
• Allows EC members to review and resolve issues
  from formal comment period members and to prepare
  to vote on recommendation
• Executive Committee will vote on proposed
  standard on October 2nd
• Work Group 3 Tasked to look at more technical
  standards for both wholesale and retail going
  foreward