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Demand Response Potential Maryland Public Service Commission Planning Conference Andy Ott Vice President Markets www.pjm.com 1 PJM ©2007 2006 Integration of Demand Response in PJM Markets • Demand Response integration into PJM markets completed in 2006 – Energy Market • Economic Load Response • Emergency Load Response (Energy Only Option or Full Emergency) – RPM Forward Capacity Market • Demand Resource (DR) • Interruptible Load for Reliability (ILR) – Synchronized Reserve Market – Regulation Market www.pjm.com 2 PJM ©2007 Growth in Economic Load Response Volume (MWh) of Demand Response Participation in the Market 300,000 250,000 200,000 150,000 100,000 50,000 0 2002 2003 2004 2005 Year www.pjm.com 3 PJM ©2007 2006 as of 6/30/2007 2007 Demand Side Response Synchronized Reserved Participation Total Payments Cleared MWh $500,000 40,000 $450,000 35,000 $400,000 30,000 $350,000 Dollars $250,000 20,000 $200,000 15,000 $150,000 10,000 $100,000 5,000 $50,000 $- 0 Jan-07 Cleared MWh Total Payments www.pjm.com Feb-07 Jan-07 35209.6 438926.64 4 Mar-07 Feb-07 5104 97891.99 Mar-07 8675.3 181814.73 PJM ©2007 Apr-07 Apr-07 17275.2 234376.25 May-07 17896.8 219276.12 May-07 Jun-07 8859.1 124575.87 Jun-07 Total 93,020 1,296,862 MWh 25,000 $300,000 Incremental Generation and Demand Resources in RPM Auctions RTO** Capacity Changes (in ICAP) EMAAC SWMAAC 2007/2008 2008/2009 2007/2008 2008/2009 2007/2008 2008/2009 Increase in Generation Capacity 602.0 724.2 134.7 293.4 0.0 52.0 Decrease in Generation Capacity -674.6 -375.4 -257.7 -51.6 -112.0 -14.0 Increase in Demand Resource Capacity* 555.0 574.7 43.3 288.7 19.0 284.5 Net Increase in Installed Capacity 482.4 923.5 -79.7 530.5 -93.0 322.5 ** RTO numbers include EMAAC and SWMAAC www.pjm.com 5 PJM ©2007 Changes to Generation Retirement Decisions Since RPM Approval RTO** EMAA C SWMA AC 2019.3 1857.2 0.0 Postponed Retirement 160.7 58.6 102.1 Reactivation 133.6 133.6 0.0 2313.6 2049.4 102.1 Withdrawn Deactivation Requests Total Values Represent Cleared UCAP in the 2008/2009 BRA ** RTO values include EMAAC and SWMAAC www.pjm.com 6 PJM ©2007 Key Recommendations from Recent PJM Symposium on DSR • • • • • • • • • A regional approach to the development of standardized platforms, communications protocols, investments in enabling technologies, and wholesale-retail DR integration issues New retail rate structures that better reflect wholesale market pricing strategies Pricing that captures the full value of DR and mechanisms for customers and service providers to get access to all relevant revenue streams Direct load control for all residences, perhaps through state legislation, and modification of building codes for new residences so that they include specifications for technologies that accept/address dynamic pricing signals Advanced metering infrastructure (AMI) available to all customers who want it and price responsiveness with little or no manual intervention Exposure for all customers to hourly wholesale prices Establishment of quantitative (MW) regional goals for DR Adjustment of the 25% cap that currently exists in PJM’s synchronous reserves DR program Full responsibility taken by PJM for metered data and calculations used in determining customer baseline loads (CBL) www.pjm.com 7 PJM ©2007 Impediments Identified by the PJM DSR Working Group • Current focus of Demand Side Response Working Group – PJM implementation of proposed environment for meter data and customer baseline calculation – Availability and timeliness of required infrastructure at the retail level – Distributor verification/provision of end-use customer’s usage, retail rate, and location – Integration of Energy Efficiency (FERC Order on RPM) www.pjm.com 8 PJM ©2007