The Future is Now

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Demand Response as Capacity in New York
David J. Lawrence Manager, Auxiliary Market
Products New York Independent System Operator
National Association of Regulatory Utility
Commissioners Winter Committee
Meetings Washington, DC February 17, 2008
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Topics Covered

• How the NYISO Capacity Market recognizes demand
  response
• Historic demand response registration,
  performance
• Current issues impacting demand response in the
  NYISO Capacity Market

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Demand Response Program Overview

• The NYISO operates two reliability-directed
  demand response programs
• The Emergency Demand Response Program (EDRP)
• resources paid the greater of 500/MWh or the
  prevailing LBMP for curtailments
• no consequences for enrolled participants that
  fail to curtail
• minimum 100 kW requirement can aggregate
  resources
• The Installed Capacity Special Case Resources
  Program (SCR)
• certified resources can offer unforced capacity
  (UCAP) to Load Serving Entities (LSEs).
• resources are obligated to curtail when called
  upon to do so with two or more hours notice,
  provided that they were notified on the day prior
  
• resources are subject to testing to verify that
  they can fulfill their curtailment requirement.
• failure to curtail could result in penalties
  administered under the ICAP program.
• Participants register either for EDRP or ICAP/SCR
  but not both.

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TDRPThe Targeted Demand Response Program

• Effective July 1st, 2007
• Allows for activation of ICAP/SCR and EDRP
  resources in select locations within zone J (NYC)
• Voluntary Response No Penalties for
  Non-Performance
• Normal Payments for Reduction
• Cannot set real-time market price

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Registered MW by Program
In 2003, EDRP and SCR/ICAP registration became
mutually exclusive
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Demand Response Registration
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Actual Performance History
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Current Issues Impacting Demand Response

• Forward Capacity Market design effort
• Stakeholder process underway
• Need to factor in demand response as an element
  of the forward market supply, while recognizing
  that some forms of demand response are best
  acquired in spot market capacity auctions
• Potential NY environmental restrictions on
  behind-the-fence generation

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Standards Development

• Market designs may have evolved differently in
  the various regions of the country, but they all
  deal with similar concerns when looking to
  incorporate demand response.
• How is reliability maintained? How is the
  response measured? How do we communicate with
  demand response?
• Standards development will allow the markets to
  build upon the successes of each other.
  Standards development will allow service
  providers to more quickly and efficiently enter
  markets and grow participation.
• Standards creation efforts occurring at NAESB
  (North American Energy Standards Board) and at
  ISO/RTO Council (IRC)

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The New York Independent System Operator (NYISO)
is a not-for-profit corporation that began
operations in 1999. The NYISO operates New Yorks
bulk electricity grid, administers the states
wholesale electricity markets, and performs
comprehensive reliability planning for states
bulk electricity system. ________________________
__________________________________ www.nyiso.com