Perspectives on Demand Perspectives on Demand ResponseResponse

Rick SergelPresident & CEO, NERC

Demand Response Town MeetingJune 2, 2008

About NERC

The electric industry’s “self-regulatory organization” for reliability

• Balances the interests of all stakeholders

• Represents industry consensus

• Independently acts in the best interest of reliability

• International “charter” lending government support and oversight to SRO activities, ensuring that the best interests of society-at-large are represented Federally recognized “Electric Reliability Organization” in the

U.S.

Agreements in place with several Canadian provinces and developing these agreements in others

About NERC: MissionAbout NERC: Mission

Develop & enforce reliability standards

Assess current and future reliability

Analyze system events & recommend improved practices

Encourage active participation by all stakeholders

Pursue mandatory standards in all areas of the interconnection

To ensure the reliability of the North American bulk power system

Demand Response & Reliability

Demand Response & Interruptible Load play a role in recovering from many system disturbances

• Aids in restoration

• Allows time to bring additional resources online

• Relieves local congestion

Demand Response Contributes

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

ERCOT FRCC MRO NPCC RFC SERC SPP WECC

% o

f To

tal I

nte

rnal

Dem

and

Total Capacity Demand Response Direct Control Load ManagementContractually Interruptible (Curtailable) Critical Peak-Pricing with ControlLoad as a Capacity Resource

Peak Demand Rising

North American Supply & Demand

800000

850000

900000

950000

1000000

1050000

1100000

1150000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

MW

Commited Supply Projected Total Internal Demand

10% Rise

20% Rise

20% More Resources Needed

Generation

Transmission

Distribution

Demand Response

Efficiency

Resource Management

Thank you