Berkeley/CERTS calls NYISO demand-reduction programs a success


Guilderland, N.Y., March 5, 2003 -- The New York Independent System Operator (NYISO) has received kudos for its demand-reduction programs, confirming that New York State's electricity market continues on a successful track.

Researchers from the Consortium for Electric Reliability Solutions (CERTS) in Berkeley, California, evaluated the NYISO's 2002 Price Responsive Load Program and concluded that the demand-reduction measures taken in the NYISO program have a significant impact on reducing energy use in peak situations.

In 2002, the NYISO saved 668 megawatts--the equivalent of 70 large shopping malls--during the two hot, summer days on which it asked customers to curtail their loads.

NYISO customers also received up to $16.9 million in benefits for participating in demand reduction. Details from the report are attached. The report also can be found at the NYISO's Web site, www.nyiso.com, and at CERTS' site, http://certs.lbl.gov.

The NYISO and New York State Energy Research and Development Authority (NYSERDA) commissioned CERTS, along with electric industry consultant Neenan Associates, to complete the study.

The New York Independent System Operator (NYISO)--www.nyiso.com-- is a not-for-profit corporation established in 1999 to facilitate the restructuring of New York State's electric industry. Based in New York's Capital Region, in addition to administering the State's wholesale energy markets, the NYISO operates the State's high voltage electric transmission system. Last year, the NYISO's market volume exceeded $5.2 billion.

How and why customers respond to electric price variability: A study of the NYISO and NYSERDA PRL program perfomance Berkeley, Calif.-- The New York Independent System Operator (NYISO) has released its 2002 Price Responsive Load Program (PRL) evaluation, "How and Why Customers Respond to Price Variability: A study of the NYISO and NYSERDA PRL Program Performance."

NYISO and New York State Energy Research and Development Authority (NYSERDA) commissioned the study, which was conducted by Neenan Associates and the Consortium for Electric Reliability Solutions (CERTS).

CERTS researchers from Lawrence Berkeley National Laboratory in Berkeley, California and Pacific Northwest National Laboratory in Richland, Washington were supported by funding provided by the U.S. Department of Energy.

The report provides a comprehensive assessment of the impact of PRL programs on maintaining reliability and dampening the volatility of electricity prices in New York State, and characterizes the factors contributing to customers' participation and performance in the programs.

The New York Independent System Operator (NYISO) administers three programs that provide payments to customers for reducing electricity consumption. The programs were developed in concert with the New York State Energy Research and Development Authority (NYSERDA), the New York State Public Service Commission, the state's electric utilities, and other market participants.

Through the Emergency Demand Response Program (EDRP), the NYISO solicits load curtailments to avoid the consequences of reserve shortfalls. Participants that curtail are paid the greater of the market price of electricity, or $500/MWH floor price.

In the Installed Capacity/Special Case Resources Program (ICAP/SCR), customers sell their curtailment capability in return for committing to reduce load when requested by NYISO.

The Day-Ahead Demand Response Program (DADRP) allows customers to submit load reduction bids into the NYISO's Day-Ahead Market and receive market-clearing prices for scheduled curtailments. All three programs are designed to provide retailers opportunities to take advantage of the load management capabilities of their customers.

"This is the second year of successful operation for the NYISO's EDRP and DADRP programs and the third of ICAP/SCR program," said David Lawrence, Manger of Product Development at NYISO. "The NYISO is committed to implementing a variety of PRL programs and to evaluating and refining them to ensure that they contribute to the overall performance of New York's electricity markets."

The report describes the extensive and diverse nature of program participation, including the following:

• Participation in EDRP increased substantially in 2002. More than 1,700 customers enrolled in the program in 2002, compared to just fewer than 300 customers in 2001. Furthermore, 2002 participants subscribed almost 1,500 MW of load reduction capability, a two-fold increase from 2001.

• EDRP Participants provided an average curtailment of 668 MW during the two load curtailment requests during summer 2002 reducing their hourly electricity usage on average by 34%, for which they were paid over $3.3 million.

• Customer enrollment in DADRP increased in 2002 (from 16 to 24 customers), although proposed and scheduled load reductions offered by customers decreased in 2002 compared to 2001.

The average load scheduled was about 14 MW.

The key findings described in the report include the following:

• The EDRP program was estimated to have provided reliability benefits valued at between $1.7 million and $16.9 million. Real-time market prices were also reduced during the curtailment events which produced estimated savings of $0.9 million for load serving entities (LSE) and consumers.

• Overall, customer curtailed on average about one-third of the usage during summer 2002 EDRP events.

• EDRP performance during curtailment events is influenced by several factors, including choice of reducing usage versus deploying on-site emergency generation, whether they participated in EDRP and also received ICAP/SCR payments and faced penalties for non-performance, their participation in a NYSERDA peak demand reduction program, and type of business and facility.

• Customers that received funding from NYSERDA and actively participated out-performed other EDRP participants, curtailing on average 64% of their subscribed load reduction compared to 46% for the non-NYSERDA participants.

• Awareness and education are key barriers to DADRP bidding:

• Only 45% of customers reported being aware of DADRP, even though many of these customers were also enrolled in other NYISO programs.

• Of those that were aware of the program but chose not to participate, about 36% indicated that they were unable to shift or curtail load (36%). Another 35% indicated that inadequate compensation or the perceived risks (e.g., penalties for non-performance) was the primary reason for not participating in DADRP.

• While most survey respondents reported being capable of preparing and carrying out curtailment plans, a majority indicated a significant level of discomfort with developing a bidding strategy.

The study is available from the NYISO at www.nyiso.com, CERTS at http://certs.lbl.gov/ and from Neenan Associates at www.bneenan.com. Neenan Associates (www.bneenan.com) is an electricity industry consultancy specializing in wholesale and retail electricity pricing.

The Consortium for Electric Reliability Technology Solutions (http://certs.lbl.gov) was formed in 1999 to research, develop, and disseminate new methods, tools, and technologies to protect and enhance the reliability of the U.S. electric power system in the transition to a competitive electricity market structure.

The New York Independent System Operator (NYISO)--www.nyiso.com-- is a not-for-profit corporation established in 1999 to facilitate the restructuring of New York State's electric industry. Based in New York's Capital Region, in addition to administering the State's wholesale energy markets, the NYISO operates the State's high voltage electric transmission system. Last year, the NYISO's market volume exceeded $5.2 billion.

Sponsored by FLSmidth
Recommend this article Recommend this article () You recommended this article You recommended this article ()
Follow Power Engineering on Twitter

Products Showcase

Dynamic Fluoride Ion cleaning DFIC of industrial natural gas turbines Hi-Tech Furnace Systems

Dynamic Fluoride Ion Cleaning of IGT Parts

The Dynamic Fluoride Ion Cleaning (DFIC) Process from Hi-Tech Furnace Systems is able to clean deep, narrow cracks of oxides by cycling between negative, atmospheric, and positive pressure.

Latest News

Shutterstock coal production trucks

Weekly Coal Production

The Weekly Coal Production shows how much coal is being produced across the U.S.

Federal Reserve Bank of Dallas Weekly Economic Indicators financial business

The Federal Reserve Bank of Dallas' Economic Indicators

The Federal Reserve Bank of Dallas offers a glimpse into how the markets are doing domestical...

Kvaerner awarded contract for gas-fired power plant in Delaware

Kvaerner North American Construction Inc. and its joint venture partner, Parsons Brinckerhoff...

Canadian Solar purchases two solar projects

Canadian Solar Inc. has acquired a majority interest in two utility-scale solar power project...

Operators Restart Unit 2 at PPL Susquehanna

Unit 2 at the PPL Susquehanna nuclear power plant near Berwick, Pa. resumed generating electr...

Settlement agreement limits cost recovery at Edwardsport

The Indiana Utility Regulatory Commission (IURC) on Dec. 27 modified and approved a settlemen...

Toshiba in talks to sell portion of Westinghouse nuclear unit

Toshiba Corp is in talks  to sell up to 16% of its stake in the Westinghouse Electric Co...

Utah nixes nuclear waste storage facility

Plans to park radioactive waste at a storage facility in Utah have been officially called off.

Archived Articles

2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013

Buyers Guide Categories

Current Magazine Issue

08/01/2013
Volume 117, Issue 8
1308PE_C1_digital

Buyers Guide Product Listings

Transmission Services

Blattner Energy is a diversified electrical gen...

Sargent & Lundy Engineering & Design Services

Our experience and capabilities for power deliv...

Buyers Guide Company Listings

SuperPower Inc

Develops high temperature, superconducting wire and devices for electric power generation, transmission, distribution and strorage, including power cables, transformers, fault current limiters, SMES and more.

Tech Products Inc

A global source for quality identification products including pole tags, transmission tower (aerial) markers and substation signs. Our focus is on making the best product.

Realtime Utility Engineers

Leading consulting engineering firm providing substation and transmission line engineering services to electric utilities, generation and wind developers nationwide. Complete project delivery of any scope and size.

Baldwin Filters

Manufacturer of air, oil, hydraulic, fuel, transmission, and coolant filters.

Power Industry Wire News

Algae Biomass Organization Recognizes Six Students With Young Algae Researcher Awards at Algae Biomass Summit

Algae Biomass Organization Recognizes Six Students With Young Algae Researcher Awards a...

Perma-Fix Environmental Services Announces $4.5 Million Service Contract

Perma-Fix Environmental Services Announces $4.5 Million Service Contract

MISO Confirms Benefits of MVP Projects

MISO Confirms Benefits of MVP Projects

Magnum Hunter Resources Declares Monthly Cash Dividend on Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock

Magnum Hunter Resources Declares Monthly Cash Dividend on Series C Preferred Stock, Ser...

Pledge to Rise Above Plastics With Surfrider This October

Pledge to Rise Above Plastics With Surfrider This October

Power Engineering

Article Archives for Power Engineering Magazine

Continuing Education

Professional Development Hours

To access a course listing associated to a specific topic listed below, click on the topic of choice from the list below.

Latest Energy Jobs

View more Job Listings >>