Source- FERC: National Assessment of Demand Response Potential
If Texas Legislators want to make sure the lights stay on this summer, they have a great opportunity to do so tomorrow, April 9, 2013, while saving electric customers money. There are two critical bills being considered at the legislature in Texas that would expand the use of demand response, a tool that allows customers to voluntarily reduce peak, or high, electricity use and receive a payment for doing so in response to a signal from their energy provider. We need to take advantage of tools like demand response to alleviate the pressures facing the Texas electric grid, what EDF refers to as the ‘Texas Energy Crunch,’ which include a shrinking water supply, growing population and rising summer temperatures.
Demand response has been identified by numerous experts as a key component to a reliable electric grid in Texas, and Tuesday’s Senate Business & Commerce Committee hearing at 8 am represents a great opportunity for the legislature to help meet future energy needs while providing direct benefits to customers and reducing water usage.
Demand response is critical to keeping the Texas electric grid humming. According to a comprehensive report on the Electric Reliability Council of Texas (ERCOT) reliability from the Brattle Group, “the energy-only market will not dependably support ERCOT’s current reliability target until sufficient demand response penetration is achieved.” Demand response can be deployed in a matter of months, while it usually takes two to five years to build a natural gas power plant, even after all the permitting and financing is completed. At the same time, demand response provides financial incentives; in the mid-Atlantic region, where demand response plays a critical role in the electric market, customers were paid a total of $330 million last year. At the same time, according to the grid operator for the region, PJM, demand response actually lowers overall energy system costs by bringing more competitive resources into the market. During the summer of 2012, PJM estimates this effect saved all customers around $650 million.
