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Regulating Demand Response

This overview by Sharon Jacobs from Harvard Law School explores the regulatory framework governing demand response (DR) programs, specifically focusing on FERC Orders 719, 745, and 755. It discusses the key provisions affecting DR, including the role of aggregators and market clearing prices during emergencies. The paper highlights the challenges and legal bases for regulation, examining federal authority and the interactions with other agencies like the Department of Energy and the EPA. It emphasizes the need for more research on barriers to DR and the balance between energy reliability and environmental concerns.

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Regulating Demand Response

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  1. Regulating Demand Response Sharon Jacobs Harvard Law School

  2. Overview • Order 719 • RICE Rules • Bigger-picture regulatory questions

  3. FERC and Demand Response • Order 719 (2008) • Order 745 (2011) • Order 755 (2011) • Order 676G (2013)

  4. Order 719

  5. Order 719 • Five provisions affecting DR • Ancillary services • Accepting bids from aggregators of retail customer loads • Eliminate deviation charges during system emergencies • Market clearing price should reflect true value of energy during operating reserve shortages • More research on barriers to demand response

  6. Order 719 • Legal bases for regulation • Ensuring that rates are just and reasonable • Remedying undue discrimination and preference in organized markets • Challenges/pushback • Source of authority • Limits of authority

  7. Other Federal Agencies and DR • Department of Energy • Federal Trade Commission • Environmental Protection Agency

  8. RICE Rules

  9. RICE Rules NSPS NESHAPs

  10. RICE Rules • Can operate up to 100 hours per year to participate in demand response emergencies • Can operate up to 50 of those 100 hours to help maintain voltage stability and prevent power supply interruption • Switch to ULSD as of 2015 • Reporting requirements beginning in 2015 for larger engines

  11. The View From 30,000 Feet • Jurisdictional questions • Coordination • Energy vs. environment (?)

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