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DRR Pilot Phase II

DRR Pilot Phase II. Robert B. Burke Presented To: NEPOOL Markets Committee - April 8-9, 2008. Outline of Presentation. Background of the Demand Response Reserves (DRR) Pilot Program Summarize DRR Pilot Phase I Results Summarize and Discuss Proposal for DRR Pilot Phase II Timeline.

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DRR Pilot Phase II

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  1. DRR Pilot Phase II Robert B. Burke Presented To: NEPOOL Markets Committee - April 8-9, 2008

  2. Outline of Presentation Background of the Demand Response Reserves (DRR) Pilot Program Summarize DRR Pilot Phase I Results Summarize and Discuss Proposal for DRR Pilot Phase II Timeline

  3. DRR pilot:background

  4. Background on the DRR Pilot Program • Objectives • Demonstrate whether customer loads can reliably provide 30-minute operating reserve and 10-minute non-synchronized reserve • Determine the requirements for communications, dispatch, metering, and telemetry sufficient for DR resources to provide reserve services • Identify and evaluate lower cost communications and telemetry solutions that meet the requirements and are more suitable for DR reserve resources

  5. DRR Pilot Details

  6. DRR Pilot Details(continued)

  7. DRR pilot:Phase I Results

  8. DRR Pilot – Phase I • Phase 1 began October 1, 2006 • Completed 1st full year • Resources dispatched by Operations based on random schedule • Approximately 18 times per season • Performance indicates 30 minute response is practical • Some resources may be 10 minute responsive • October 1, 2007 • Commenced 2nd full year of testing • Collect additional performance data • Investigate alternative dispatch methodologies • Concepts developed before February 12, 2008 announcement

  9. DRRP Event Statistical Significance 32 out of 37 events yielded significant load relief over the course of year one

  10. Statistical Significance of Observed Load Reductions indicates that demand reductions are outside of the natural variation of the load. Statistical Significance - Winter 2006/2007 Period Natural Variation of Load

  11. Statistical Significance of Observed Load Reductions indicates that demand reductions are outside of the natural variation of the load in all but 5 of 18 summer activations. Statistical Significance – Summer 2007 Period Natural Variation of Load

  12. Lessons Learned • ICAP value not a good measure of ability to provide reserve • DR needs a separate value to measure DRR Pilot response • In graphs that follow, performance measured against ICAP values • Need to learn more • Develop measurement of how much DR can provide daily • Not ready to fully integrate into Ancillary Service Market • Goal is to integrate into Forward Reserve Market • June 2010

  13. Winter 2006 – 2007 Performance

  14. Summer 2007 Performance

  15. Conclusion Program is worth continuing

  16. Proposal:DRR Pilot Phase II

  17. Purpose of DRR Pilot Phase II • Finalize requirements for: • Communication, dispatch, metering, and telemetry sufficient for DR resources to provide Ancillary Services • Implement identified lower-cost communications and telemetry solutions • Verify compliance with operational requirements • Integrate communications infrastructure with operations and market systems • Once the above objectives are accomplished, the ISO will be in a position to fully integrate demand response resources into Ancillary Service Market

  18. What Remains The Same • Program Size • Continue to limit to 50 MW • Availability Payment • FRM minus Transition ICAP • Based on actual performance during each event (prospective) • Performance Payment • Higher of Threshold Price or LMP • Communication • IBCS-OS • Possibly beta test RIG replacement

  19. What Remains the Same(continued) • Performance Penalty • Buy back portion not provided at RT LMP • Registration • Assets registered in 30-minute RT Demand Response Program Action 9 • Assets cannot participate in DALRP • Substitution • No substitution of assets allowed

  20. What Changes • Duration • October 2008 through May 2010 • Goal to integrate into FRM for June 2010 • Separate registration for each FRM period • Load Zone • Connecticut • Availability Requirement • 7 a.m. to 11 p.m. non-holiday weekdays • Baseline Calculation • Symmetric baseline adjustment

  21. What Changes(continued) • Dispatch • Dispatch after 1st contingency event in Connecticut only • Periodic random activations • Dispatch all resources at once • Include in Forecast • Operations will include as available for CT 1st contingency • 50% of average performance • Response Time • 20 minutes from start of event • On 1st contingency response Operations will take additional actions based on observed response

  22. Timeline • Initial Present to MC • Mid April • Market Rule to MC • Mid May • Vote Mid June • NPC Approval • June Summer meeting • FERC Filing • Early July

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