Dive Brief:
- The California Public Utilities Commission last week approved rules for a two-year demand response auction pilot slated for later in the year.
- While the U.S. Supreme Court begins to consider federal regulators' role in developing and overseeing demand response in wholesale markets, regional grid operators and states are moving to cement the resource's place in their portfolios.
- Platts reported the new California rules call for utilities to set aside 20% of demand response capacity for residential aggregations mixed with commercial customers.
Dive Insight:
Seeking to grow demand response as a resource in the state, the California Public Utilities Commission has finalized new rules for a resource auction slated for later this year. While regulators are encouraging utilities to procure as much as is feasible, Platts reports that the commission said utilities will need to acquire at least 22 MW.
Utilities in the state use demand response to meet almost 4% of their peak load, but are supposed to reach 5% in the next five years. In the upcoming auction, residential aggregation will make up at least 20% of the capacity, CPUC determined.
While federal regulators authority over demand response remains tied up in the courts, smaller markets are moving ahead. PJM Inteconnection has integrated new rules into its auctions; the largest grid operator in the United States
The grid operator told the Supreme Court in its initial brief regarding FERC Order 745 that last summer it had registered over 8,000 MW of demand response. “This is roughly comparable to the entire peak consumption of Washington, D.C. and its Maryland suburbs,” PJM said in its support of FERC's authoirty.
FERC's ability to regulate demand response in wholesale markets has been in the courts for a year now, after the D.C. Circuit Court vacated 745 in Electric Power Supply Ass’n v. FERC.
