EnergyConnect’s 2010 Focus
There are some exciting changes coming in Demand Response markets across the country. Hear about EnergyConnect’s proactive efforts to increase benefits for Demand Response from CEO, Kevin R. Evans.
Q: In the mid-Atlantic PJM region, what difference will the incentive proposal make in the Economic Load Relief program?
A: In the PJM market, there is a proposal before FERC that will re-institute full incentives for the Economic Load Relief program (ELR) to revitalize participation levels in the program. This means the incentives paid to our FlexConnect customers for voluntarily reducing or shifting load will be at much higher levels than in 2009. Participation will grow again to the historically higher levels we were seeing back in 2008. FlexConnect provides PJM-based customers with the market’s only technology platform to participate in the Economic Load Relief (ELR) program and reduce their energy bill by up to 30%.
Q: How are EnergyConnect customers impacted now that EnergyConnect is the nation’s first demand response provider to receive Market Based Rate Authorization?
A: EnergyConnect has been granted Market Based Rate Authorization (MBRA) by the Federal Energy Regulatory Commission (FERC) effective August 17, 2009. MBRA allows EnergyConnect to engage in a variety of wholesale market transactions that complement our demand response offerings and expand the range of services we can provide to grid operators, utilities, and commercial, industrial and institutional customers.
Our objectives in seeking MBRA were to obtain clarity regarding the obligations of demand response providers and ensure that we can provide an expanded range of energy services for the benefit of our customers, including the purchase and sale of ancillary services, energy and capacity. We see demand response as more than just load drop; our goal is to provide energy consumers with innovative Smart Grid technologies which enable them to benefit from access to wholesale electricity markets.
Q: What is the EnergyConnect Customer Advisory Council?
A: Our community of customers is of all sizes, representing diverse segments in the commercial and industrial industries. We believe there is great benefit in the sharing of ideas across the community as it relates to demand response. To that end, we have created an EnergyConnect Customer Advisory Council (CAC). The CAC is open to all of our customers and will provide the forum to receive updates on the latest industry trends, share best practices, and provide a collective voice to help shape our offerings, technology, and regulatory priorities.
Our ultimate goal is to deliver technologies and service that enable our customers to benefit from access to wholesale electricity markets in a way that is simple, intuitive, and economically compelling for their business.
Q: What is the latest on Pennsylvania’s Act 129 and its impact on demand response?
A: Beginning this year, millions of Pennsylvanians confront the effects of expiring electric rate caps. In 2008, the statewide energy legislation, Act 129, was enacted to help electric consumers mitigate the initial financial effects of this rate deregulation. According to the plan, all Electric Distribution Companies (EDC) in Pennsylvania with 100,000 or more customers must reduce peak demand during the highest 100 hours of use by 4.5% by May 31, 2013. The State Commission may set additional reductions targets after 2013, if the programs have proven to be cost effective. In addition, Pennsylvania’s consumers will be given incentives to employ conservation techniques to reduce electric consumption 1% by 2011 and 3% by 2013.
Act 129 creates the exciting prospect of additional financial incentives for reducing consumption when electricity demand is at its highest. At EnergyConnect, we are partnering in the effort to meet EDC commitments, and delivering to our Pennsylvania customers the additional value in utilizing demand response.
Q: Will you be offering demand response programs directly through the California ISO?
A: In California thus far, all 3rd party demand response programs have been through bi-lateral contracts with the Investor Owned Utilities (IOU’s). In this regard, EnergyConnect has been offering programs directly with Pacific Gas and Electric and Southern California Edison for the last few years. In an effort to meet the guidance set forth by FERC Order 719, the independent system operator in California (CAISO) is putting software and systems in place to enable demand response providers to bid directly into the energy and ancillary services markets starting this year. While there are still participation details to be worked out between the CAISO, CPUC and other California stakeholders, we are excited about bringing new products to our California customers in the near future.