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FERC reports demand response dropped by 10% in 2016

Participation in wholesale power market demand response programs slumped in 2016 from the prior year while customer enrollment in time-based rate programs and estimates of potential retail-level peak demand savings in 2015 saw an uptick from 2014, staff of the U.S. Federal Energy Regulatory Commission said in a Dec. 28 report.

Even as U.S. peak electricity demand grew by 3% in 2016, wholesale demand response participation fell 10% to 28,673 MW — dropping to levels roughly in line with the programs in 2013 and 2014, the report said. As a result, demand response contributed nearly a full percentage point less in meeting peak demand than in 2015, it furnished 5.7% in 2016 and 6.6% in 2015.

Slight gains in participation in Midcontinent ISO and Electric Reliability Council of Texas were not enough to offset the 24% dip in participation in the PJM Interconnection market, the 8% decline in the California ISO market and 4% decrease in the ISO New England and New York ISO markets. PJM has seen participation in its capacity market wane in recent years as it has phased out its more seasonal demand response programs to one that requires participants be able to offer services year-round.

The report notes that grid operators did not need to call on demand response during the Aug. 21 total solar eclipse in part because the loss of solar generation on the grid was not as extreme as forecast.

Nationwide enrollment in time-based rate programs increased by 10% in 2015 — the most recent year data is available — continuing the upward trajectory first seen in 2012. Much of the increase was in the ReliabilityFirst NERC reliability region, which includes the bulk power grid systems in the Great Lakes and mid-Atlantic areas of the U.S. Nearly 370,000 new customers signed up in 2015 for existing residential programs run by Delmarva Power & Light Co., Baltimore Gas and Electric Co., Commonwealth Edison Co. and PEPCO. FERC staff noted in the report the uptick in those time-based rate programs and a decrease in the incentive-based demand response programs offered by Delmarva Power and PEPCO, "may in part reflect a shift from one program type to the other."

In the Western Interconnection, about 266,000 customers in t he Western Electricity Coordinating Council signed up in 2015 for time-based rate programs including those of Pacific Gas and Electric Co., Salt River Project and San Diego Gas & Electric Co.

The report, which FERC issues annually under a directive in the Energy Policy Act of 2005, includes an estimate of the potential for retail-level demand response as a possible aid for regional system planning. Nationwide, the potential peak demand savings from retail programs in 2015, the most recent year for which data is available, increased by 5.4%, or about 1,684 MW, from 2014. Notably, the report increased its estimate of potential peak demand savings in the Southwest Power Pool region by nearly 600 MW, a 45.2% increase, and added about 900 MW to the estimated potential for the SERC Reliability Corporation region that occupies most of the Southeastern U.S.