On September 17th, the D.C. Circuit Court of Appeals declined en banc review of Federal Energy Regulatory Commission (FERC) Order 745, dealing a blow to FERC’s regulation on demand response. This sounds complex, but behind these technical terms, hidden in plain sight, is a monumentally important and unfortunate legal outcome: we’re likely about to see an unnecessary rise in electricity prices and increase in new polluting power plants. This is bad news for the consumer, bad news for efficiency, and bad news for the environment.
First, a bit of background…
FERC Order 745, issued in 2011 by the federal agency that regulates electricity throughout the United States, has successfully allowed demand response to fairly compete in the electricity marketplace with more traditional energy resources like coal and natural gas.
Demand response is an important clean energy resource used by utilities and electric grid operators to balance stress on the electric grid by reducing demand for electricity, rather than relying on dirty “peaker” power plants or new infrastructure. It pays people to conserve energy during periods of peak or high demand in exchange for their offset energy use. This makes our grid more efficient, reduces harmful air emissions from fossil fuel plants, and keeps electricity prices lower. Read More
It’s September, fall is around the corner, and with it, the second anniversary of devastating Hurricane Sandy. A smarter, more efficient electric grid should be on the minds of all New Jerseyans. Unfortunately, it’s not.
Wired magazine calls America’s power grid the largest machine ever built. Over the past few decades, this grid has been expanded throughout the country to ensure that even remote areas have electricity. Although this is an incredible accomplishment, the grid should also strive to keep pace with the latest technological advances, becoming not just the largest machine ever built, but also a more efficient and resilient one.
Source: BranderGuard Flickr
Late last week, the D.C. Circuit Court of Appeals affirmed an important Federal Energy Regulatory Commission (FERC) Order, giving the agency a big win and aiding in the promise of a cleaner, smarter, and more efficient power grid.
By upholding FERC’s Order 1000, the court confirmed what many think is common sense: Because the power grid crosses state and utility boundaries, a coordinated planning approach to electricity transmission (that is, moving electricity from one place to another) is more efficient and cost effective than multiple entities planning in isolation.
Order 1000 opens the door for two big electrical grid improvements. First, the order helps spur a more efficient planning process, meaning less waste and better coordination in our energy system. Second, the order allows greater opportunity for clean energy resources like demand response, energy efficiency, and renewables. It does this, in large part, by ensuring that state policies like renewable portfolio standards are taken into account. Relying on more clean energy resources will improve air quality and the health of millions of Americans now harmed by dangerous air pollution while advancing our country’s energy independence and economic growth. Read More
By: Michael Panfil, attorney for EDF’s US Climate and Energy Program, and Jamie Fine, senior economist for EDF’s Clean Energy Program
Demand response encourages customers to shift their energy use to times of day when there is less demand on the power grid or when more renewable energy is abundant. It is an invaluable component of the smart grid that improves air quality, enhances electric grid reliability, and helps utilities, homes, and businesses financially benefit from conserving electricity.
Yesterday, a diverse group of organizations submitted an important and far-reaching settlement agreement on the future of demand response in California to the California Public Utilities Commission (Commission) for its approval. The settling parties – including EDF, California investor-owned utilities, California Independent System Operator (CAISO), consumer groups, and others – recommend, for the first time, a path to properly value, realize, and account for demand response. If approved, these changes have the potential to increase the role of demand response in meeting California’s energy demands, reducing hazardous air pollution, and more efficiently operating the state’s electrical grid. Read More
Source: CEB Blogs, executiveboard.com
Last month, the Federal Energy Regulatory Commission (“FERC”) announced it would seek rehearing of a recent US Court of Appeals decision, which changes how demand response providers are compensated in wholesale energy markets. The court’s decision was a setback for demand response, a clean energy resource used by utilities and electric grid operators that pays people to conserve energy during periods of peak or high demand.
Demand response balances stress on the electric grid by reducing demand for electricity, rather than increasing supply. This makes our grid more efficient, reduces harmful air emissions from fossil fuel plants, and keeps electricity prices lower. The court decision is significant because it invalidates FERC Order 745. This Order required that demand response be fairly valued in the wholesale energy market, allowing it to compete on a level playing field with more traditional electricity resources, like coal and natural gas. Read More
Resiliency+ is a new blog series, which highlights the ways in which different clean energy resources and technologies can play an important part in increasing energy resiliency in New Jersey and around the country. Check back every two weeks, or sign up to receive Energy Exchange blog posts via email.
The Federal Energy Regulatory Commission (FERC) describes demand response as “changes in electric usage by end-use customers from their normal consumption patterns in response to changes in the price of electricity over time, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.”
There is quite a bit to unpack in that definition, but put simply, demand response is little more than a way of financially motivating customers to reduce their energy use when electricity is particularly scarce and expensive or when the wires are overburdened (check out EDF’s other blog posts and resources that go into more detail). The end result is a more efficient electric grid which is less overbuilt and less dependent on inefficient fossil-fuel plants that are often uneconomic to operate and highly polluting, but may be called upon when all else fails. Read More