Demand Response Implementation

The Commission is explicitly tasked by 2016 PA 342 Sec. 95.(1)a to “promote load management in appropriate circumstances…” and “actively pursue increasing public awareness of load management” among other activities. Additionally, DR is included in integrated resource plans and energy waste reduction efforts. The DR implementation team will work to further evaluate and promote DR in cases before the Commission, MAE outreach activities, and regional load management efforts.

On September 15, 2017 in Case U-18369 the Commission issued an order adopting Staff’s DR framework proposal (see task reports below). The adopted framework consists of a multi-step process where DR proposals, including program costs and benefits, are evaluated alongside other supply and demand-side options in integrated resource plans. Once those integrated resource plans are approved by the Commission (phase 1), the costs associated with DR are considered approved, and will be included in the utility’s following general rate case, or phase 2 of 3. Because the DR plans and costs have already been approved in the IRP proceeding, they will not need further evaluation in the rate case. In the third phase a reconciliation case will be conducted to balance DR program costs, customer participation rates, and MW of load reduction with those measures as projected in the utility’s IRP.

The reconciliation process will ensure that DR program costs and benefits align with IRPs, protect the utility from variation in customer participation that may result in DR program investment, and ensure that DR as a resource continues to be cost effective for both the utility and customer.

The Order also confirms that alternative energy suppliers may provide demand response programs to their power supply customers, including the use of curtailment service providers on behalf of the alternative supplier.

Staff Leads

Dave Isakson

Accomplishments

Held four workgroup meetings in June and July to propose and discuss the future of demand response’s evaluation, cost recovery, and integration with established regulatory processes
Workgroup also evaluated demand response provisions contained in PA 341 and 342
Order on September 15th in case U-18369 established the framework for demand response based on Staff’s proposal

Additional Steps

Reviewing and proposing new tariffs for large industrial customers as a result of the DR Market Assessment and a review of current utility offerings
In an order dated November 12, 2018 in case U-20348, the Commission directed Commission Staff to work with interested stakeholders to discuss issues related to demand response aggregation