Comment from EnerNOC, Inc. (Melanie Gillette)
Dear Mr. Walker and NWPCC Staff, EnerNOC, Inc. appreciates the opportunity to provide some brief comments on the Council's Draft Sixth Power Plan (Sixth Plan). We have actively participated in the Council's Pacific Northwest Demand Response Project (PNDRP) and are pleased to see that the Sixth Plan includes a specific plan for demand response to be part of the region's answer to meeting peak loads and providing the necessary flexibility to keep Northwest prices low while maintaining a low carbon footprint. We applaud the Council's detailed analysis on the benefits of demand response in reducing resource portfolio risk, and we look forward to participating in PNDRP’s ongoing discussions regarding the price structures that encourage demand response. Our comments on the Sixth Plan relate primarily to the assumptions in Chapter 5: Demand Response. Specifically, we provide input on the following areas: • Demand response assumptions for the Northwest region; and • Recommendation to conduct R&D and demonstration pilots. Demand Response Assumptions The Power Plan assumes five percent load reduction from demand response over the 20-year planning horizon, with 450 MW of new commercial and industrial (C&I) load reduction through aggregators. EnerNOC appreciates the Council’s analysis of both the local demand response potential studies and the demand response penetration rates in other regions as significant data points for the Northwest demand response potential. Based on our experience across the country, however, we would like to encourage the Council to consider increasing both the total amount of load reduction and the potential from C&I customers enrolled in demand response through aggregators in future versions of the Power Plan if these goals prove to be to conservative for the region. As the Council correctly points out, a number of utilities and system operators have accomplished a similar level of demand response in periods of five to ten years. Not surprisingly, the markets where demand response aggregators are most active have significant amounts of demand response capacity. Looking at capacity-based reliability programs only, one can see the extent to which demand response has “come of age” in these markets. As of October 1, 2009, PJM had 7,139 MW in its Emergency Load Response Program (approximately 4.9% of the PJM system peak of 144.6 GW); NYISO had approximately 2,065 MW in its Special Case Resources program (6% of the NYISO system peak of 34,249 MW); and ISO-NE had about 2,023 MW in its Real-Time Demand Response program (approximately 7.2% of ISO-NE system peak of 28,130 MW.) Because the primary business of demand response aggregators is demand response, these companies employ staff that is trained for, and dedicated specifically to, maximizing performance and value of the demand response resources. For example, EnerNOC’s technical staff is specifically trained to conduct audits that identify demand response potential at customers’ sites. Our sales staff is focused on recruiting customers into demand response programs and retaining them. We have built specialized networks for communication and control of demand response resources. We must deliver demand response successfully since it is essential to the stability and growth of our business. Therefore, our interests are aligned with the Council’s interest in ensuring that the maximum amount of demand response is available and delivered. We would like to encourage the Council to strive for as much cost-effective demand response from aggregators during the 20-year planning horizon as possible. R&D and Demonstration Pilots The Power Plan recommends both R&D and demonstration pilots to increase the region’s experience with demand response. EnerNOC would like to encourage the Council to reconsider this recommendation. Demand response is a proven, cost-effective alternative to purchasing wholesale power under long-term contracts or building new generation in order to meet peak load requirements and provide relief in the event of emergencies to prevent outages. While pilot programs certainly can provide value in the infancy of a new technology, demand response is no longer in the infancy stage. Aggregators supply services across North America to independent system operators (ISOs) in organized markets as well as to vertically integrated utilities in non-restructured markets. The demand reductions that aggregators deliver are recognized as a firm resource that can provide energy, emergency response, and ancillary services to utilities and ISOs. EnerNOC alone has over 3,250 MW of demand response under management, including contracts with all three California investor-owned utilities, Idaho Power Company, Puget Sound Energy and Xcel Energy. We urge you to leverage the experience gained in other regions and maximize your potential for demand response reductions from this proven resource. Congratulations on a very thorough Power Plan for the Northwest region! We appreciate your efforts and your consideration of our comments. Sincerely, Melanie Gillette EnerNOC, Inc.