price responsive load next steps – data collection

Price Responsive Load

Next Steps – Data Collection

Paul Wattles

Karen Farley

DSWG and RMS sub team

October 16, 2012

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Why it’s important to understand retail DR & price response

• Resource adequacy concerns – Brattle report underscores the important role of DR in the

ERCOT markets• Advanced metering

– Enablement of DR is an important element in the return on the AMI investment

• There are limits on the amount of DR that the ISO can contract for (e.g., Ancillary Services and ERS)

• The bulk of new DR will likely need to be enabled by LSEs:– Price and 4CP-responsive Load– Other retail DR incentives and technologies

• Ability to track growth of these products is a key metric in measuring the success of the ERCOT retail market

October 16, 2012 DR/Price Response

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June-July 2012 LSE Survey

• Survey sought counts of customers on various DR/price response products

• 86 REPs and 40 NOIEs responded (representing 96% of total ERCOT Load)

• Total of 9.46 million meters reported• Total of 79,069 premises on some type of dynamic pricing

contract• Total of 0.83% of total premises on dynamic pricing/DR

products

• Just as important: numerous LSEs are considering adding new DR/price response products in the future

Presentation of survey results can be found here – http://www.ercot.com/content/meetings/dswg/keydocs/2012/0822/RMS-DSWG_DR-SurveyDraftResults_final.pdf


http://www.ercot.com/content/meetings/dswg/keydocs/2012/0822/RMS-DSWG_DR-SurveyDraftResults_final.pdf

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Reminder of the bigger picture

26.3%

73.7%

NOIE Retail Choice

Competitive Choice vs. Muni/Co-op Load

Some existing and developing smart grid initiatives:-- AMI-- Smart thermostats-- Other DLC

NOIE boundary meter Load subject to 4CP tariffs

AMI deployment nearly complete

ESI IDs settled on their 15-minute interval data

Premises >700kW have IDR meters and are subject to 4CP transmission tariffs

MWh 12/1/10 thru 8/11/11

Retail Competitive Choice Non-Opt In EntitiesCompetitive Choice NOIE


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Dynamic pricing under consideration

Real-Time PricingYES NO

REPs NOIEs REPs NOIEs

Large C&I 34 4

37 36Small Commercial 24 1

Residential 25 1

• LSEs were asked if they have plans to initiate products in the future:

Critical Peak ProductsYES NO


Large C&I 23 6


Residential 14 3

Time of UseYES NO


Large C&I 17 14


Residential 28 11


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The need to dig deeper

• Phase 1 – Survey – Results shared at Aug RMS and DSWG

• Phase 2 – Data collection – Transition into this phase today– Begin discussion with market on what and why

• Phase 3 – Analysis – After data collection, evaluation of price elasticity and how it

affects:• Load forecasting• Wholesale market price formation• Resource adequacy

– Analysis will be at the aggregate, no specific market participant information will be shared


We are here!

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Phase 2 – Data collection

• Thanks to the survey, now we know:– About how many premises are on retail contracts for dynamic

pricing and/or demand response

• What we don’t know:– Locations and characteristics of the price-responsive Loads– Whether and how Loads on dynamic pricing products respond– What the DR impacts are


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What details do we need and why?

• ERCOT would like to correlate premises to the types* of products they are on – RTP – Real Time Pricing– B&I – Block & Index– CPP – Critical Peak Pricing– CPR – Critical Peak Rebates– 4CP – Four Coincident Peak– TOU – Time of Use– OLC – Other Load Control– OTH – Other Voluntary Demand Response Product

• Do we have the right categories to start?– Ideally, the process can remain flexible to accommodate new

product types as they may be added* See appendix for definitions


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Data Collection – next steps

• Now that we know what ERCOT will need– How often?– What method of communication?– When is the right time to start receiving?– Once we’ve agreed upon what to collect and how often, we will

need to discuss where to document it (market guide, other binding document, etc).

DR/Price ResponseOctober 16, 2012

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Options for the REP vehicle – AM session (starting at 9:30a)

• What ERCOT needs for analysis:– ESIID– A code for product type/category– Periodic updates (frequency to be discussed)– Potentially: strike prices (if applicable to product)

• What ERCOT doesn’t need:– Customer-specific information


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Options for the NOIE vehicle – PM session (starting at 1:30p)

• ERCOT is open to suggestions on how to quantify price response and retail DR in the NOIE areas– No ESI IDs– No premise-level data submitted to ERCOT today– No 15-minute metering requirements (although many NOIE

premises are equipped with advanced metering)• One option: mimic data submission process used in ERS

– Premise-level data directly from NOIE TDSP, or– Premise-level data attested by a PE

Additional considerations– Periodic updates (frequency to be discussed)– Potentially: strike prices (if applicable to product)


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Future ERCOT analysis

• Collecting premise-level data on these retail products would allow ERCOT to quantify retail DR and track trends:– Chart market growth in participation for each product type– Develop models (baselines) for the premise load based on

historical usage – Compare the baselines to usage on days with likely DR events,

depending on identified triggers:• High LMPs (for Real-Time or Critical Peak products)• Probable 4CP signals (for 4CP products)• Energy Emergency Alerts

– Evaluate TOU premise peak usage vs. baselines and/or control groups

– Provide periodic progress reports to the market on an aggregated basis


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Questions?

ON

OFF


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Appendix - Definitions

• RTP – Real Time Pricing - retail prices based on ERCOT Real-Time Settlement Point Prices for the premise Load Zone, calculated every 15 minutes, or other real-time wholesale price indicator(s).

• B&I – Block & Index – fixed pricing for a defined volume of usage, coupled with pricing indexed to the wholesale market for usage exceeding the block. Block prices and volumes may vary by time of day/week.

• CPP – Critical Peak Pricing – contracts that call for prices to rise dramatically during critical peaks: limited duration, dynamically set periods of time that usually correlate to high prices in the real-time wholesale market. Critical peak events typically occur a limited number of times per year and typically are communicated in advance to participants.

• CPR – Critical Peak Rebates - contracts that pay rebates to customers for load reductions taken during defined during critical peaks (see above).


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Appendix - Definitions

• 4CP – Four Coincident Peak – predictor signals or direct load control provided to customers in advance of potential Four Coincident Peak (4CP) intervals during summer months (June through September). Reducing load during such intervals lowers transmission charges.

– 4CP charges apply to large customers (peak demand ≥700 kW) in competitive choice areas, and also to NOIEs at the boundary meter level.

• TOU – Time of Use - charges based on usage across defined blocks of hours, with prices and schedules known in advance. (As used here, does not apply to seasonal fuel factor-related rate adjustments).

• OLC – Other Direct Load Control – contracts that allow the LSE or a third party to control the customer’s load remotely for economic or grid reliability purposes. This category applies to Direct Load Control (DLC) with different deployment criteria than described elsewhere. (Avoid double counting if DLC data was reported in other categories.)

• OTH – Other Voluntary Demand Response Product – any retail product that includes a demand response incentive or signal not covered in the other categories.


price responsive load next steps – data collection

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