NAESB Measurement and Verification Model Business Practice Retail Electric Demand Response

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NAESBMeasurement and Verification Model Business
PracticeRetail Electric Demand Response

• 5/29/09 update

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Activities

• 11 - Conference calls/WebEx
• One every other week
• Good participation form group members and
  industry experts
• Two day meeting in Baltimore
• Discuss approach and matrix
• 1 WEQ Leadership/NAESB Board meeting

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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

• Model Business Practices should cover
  Dispatchable and non-Dispatchable programs
• Dispatchable
• Capacity Programs
• Direct Load Control
• Firm Service Level
• Guaranteed Load Drop
• Critical Peak Pricing
• Ancillary Service Programs
• Spinning Reserve
• Non Spinning Reserve
• Regulation Services
• Energy Service Programs
• Dispatched for economic reasons
• Non Dispatchable need to define

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Coordination

• Working 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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NERC Diagram
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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
• Note Eliminated the distinction of Type I and
  Type II for Baseline

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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
• Currently working through the NAESB glossary
  committee to adopt definitions may take several
  more meetings to complete

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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 incentive
  payments designed to induce lower electricity use
  at times of high wholesale market prices or when
  system reliability is jeopardized.

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Key Definitions

• Program Administrator An investor owned
  utility, governmental or cooperative utility or
  independent aggregator of demand response
  programs who has responsibility for developing
  and operating demand response programs identified
  in this standard. The Program Administrator shall
  have regulatory reporting responsibility to the
  utility regulatory body in the jurisdiction of
  the retail load and reporting responsibility to
  NERC

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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 figure below illustrates the
  concept of Baseline relative to a Demand Response
  Event.

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Baseline Conceptualization
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General Characteristics

• Advance Notification (remote switch vs no switch)
• Deployment Time
• Reduction Deadline
• Ramp Period determined by Program Administrator
• Release/Recall
• Normal Operations
• Demand Resource Availability Measurement
• Aggregation
• Transparency of Requirements

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After-The-Fact Criteria

• After-the-Fact Metering Requirement
• Meter Accuracy
• Details of Meter/Equipment Standards
• Meter Data Reporting Deadline
• Meter Data Reporting Interval
• Clock / Time Accuracy
• Validating, Editing Estimating (VEE) Method
• On-Site Generation Meter Requirement

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Performance Evaluation Methodologies

• Maximum Base Load
• Meter Before / Meter After
• Baseline
• Metering Generator Output

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Maximum Base Load

• A performance evaluation methodology based
  solely on a Demand Resources ability to reduce
  to a specified level of electricity Demand,
  regardless of its electricity consumption or
  Demand at Deployment.

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Maximum Base Load
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Meter Before / Meter After

• A performance evaluation methodology where
  electricity Demand over a prescribed period of
  time prior to Deployment is compared to similar
  readings during the Sustained Response Period.

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Meter Before / Meter After
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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 figure below illustrates the concept of
  Baseline relative to a Demand Response Event.

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Baseline
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Metering Generator Output

• A performance evaluation methodology, used when a
  generation asset is located behind the Demand
  Resources revenue meter, in which the Demand
  Reduction Value is based on the output of the
  generation asset.

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Next Steps

• Complete the glossary committee definition review
  estimate 2 meetings
• Review document for consistency
• Move information and graphics in definition
  section to appropriate section in the document
• Remove any unused definitions
• Review document flow
• Plan is to present Model Business Practice at the
  next NAESB meeting in July