New York regulators approve demand reduction programs

By the OGJ Online Staff

HOUSTON, Mar. 30, 2001—The New York State Public Service Commission approved programs to limit electricity demand at peak use time and ordered the state's electric utilities to file revised plans to pay customers who bid to curtail load.

The regulators expect the "demand response" programs to be in place for the summer.

Specifically the commission approved certain voluntary curtailment programs by Consolidated Edison Co. of New York Inc. which serves transmission constrained New York City.

With increased demand and few locations suitable to build new power plants, New York City is particularly vulnerable to possible shortages this summer should the weather turn hotter than normal. Even though the commission and the New York Independent System Operator (ISO) are trying to get new small peaking plants on line in the city by summer, the plants have not received legislative approval.

Legislators are debating the need and the cost of the new peaking units. Even if the plants are built, regulators see demand reduction as key to improving reliability this summer, the commission said in a statement.

The load curtailment program approved includes:

• Voluntary "real time pricing" rates for large customers that voluntarily shift their electricity usage to off peak time.

• Emergency demand response incentives for large customers to quickly and voluntarily reduce electricity usage during emergency situations.

• Discounts for customers that install "interval meters" needed to participate in the real-time and emergency-demand response programs.

• Special rates for large multiunit buildings that use "steam air conditioning" in place of electric air conditioning.

• A public awareness campaign to inform customers about the electricity supply and demand situation in New York City and how to save electricity through efficiency and less usage.

The commission also ordered other utilities to revise incentive plans encouraging customers to participate in an ISO load curtailment program in the wholesale market. The program would permit customers to bid to curtail a portion of their load when wholesale prices exceed a certain level. The ISO will administer the program which will available through the utilities and energy service companies.

Under the New York ISO program, customers will bid for curtailment in the day ahead market. Customers with accepted bids must curtail and will be compensated for that curtailment. The New York State Research and Development Authority, a state agency, will provide funding for the equipment for the load curtailment program and the real time "interval metering" program.

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