Focus high on demand response and demand-side management

FERC's Wellinghoff discusses, and Minnesota co-op announces big project

Kate Rowland | Apr 26, 2012

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Two different conversations today pointed to the increasing importance of demand response and demand-side management to electric utilities in today's environment.

Early this morning, Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff held his annual reporter roundtable to discuss issues of import from the past year. While FERC Order 1000, the Transmission Planning and Cost Allocation Final Rule, topped Chairman Wellinghoff's list of the commission's major accomplishments this year, Right behind it was FERC Order 755, the Frequency Regulation Service Compensation Final Rule.

"(Order 755) is a milestone in that it recognizes we need to look at all these discreet resources and the value they bring to the system," Wellinghoff said. "This rule recognizes there are fast-regulation responses that can in fact provide regulation response more rapidly ... and make the system more efficient. We want to make sure the most efficient and most cost-effective things will bubble to the top of the market."

With this in place, Wellinghoff said, FERC is also going to move forward with "at least some form of proceeding-I can't tell you yet what kind of forum it will be" for demand response. "It'll be very similar to 755," he said, adding that it would look at distributed resources that are embedded in the distribution system that are providing value to the system.

"Demand response providers should be given the same kind of flexibility (as traditional generators) to bid in," Wellinghoff said.

Then, later yesterday morning, Great River Energy, along with two of its member distribution cooperatives, Lake Region Electric Cooperative and Minnesota Valley Electric Cooperative, announced the launch of its smart grid demonstration project, part of a larger, four-year regional smart grid demonstration.

The larger project, coordinated by the National Rural Electric Cooperative Association's (NRECA's) Cooperative Research Network and funded by a $34 million grant from the U.S. Department of Energy (including $5 million for the Minnesota project), will evaluate the benefits and costs of an array of new technologies. Cooperatives throughout the country are participating in the demonstration project, and matching the DOE grant as part of their participation.

Based in Minnesota, Great River Energy (GRE)is a not-for-profit cooperative, providing wholesale electric service to 28 member distribution cooperatives in Minnesota and Wisconsin. Its project, along with the two member distribution cooperatives, will implement demand response management and meter data management systems, and deploy energy storage, advanced load control technologies, and in-home displays. Collectively these activities will enable the cooperatives to offer new pricing programs, helping consumers manage energy use and costs.

With many of its member distribution cooperatives deploying smart meters, GRE saw the need to better manage the huge volumes of meter data coming in, said Gary Connett, Great River Energy's director of demand-side management and member services.

"Right now, this is being driven by our member distribution cooperatives, who are starting to get concerned with all the data they're beginning to receive," Connett said. "We want to help-from our end, we're helping facilitate this meter data management (MDM) system." At the same time, Connett said, the co-op is deploying a demand response (DR) management system.

"We have 650,000 end-use customers, and 330,000 controlled loads," he explained, adding the cooperative's current demand-side management system is now 25 years old. "We want load control with more precision and less heavy-handed," he said. "We know we can do it on a region-by-region basis, a co-op by co-op basis, and a customer-by-customer basis."

With Great River Energy already offering its generation for bid through MISO, Connett said the cooperative aims to establish, with its new DR management system, the precision to control and better measure the demand response it is able to bid in. A FERC Order similar in nature to Order 755 would make this easier to measure in terms of value to the system.

The three-cooperative demonstration project will also demonstrate what Connett described as leading-edge technology. This will include installing battery storage systems in 20 members' homes, and a dozen grid-interactive, large-capacity water heaters, connected via the Internet, that will monitor energy prices, and recharge when prices are low. This is the first example of grid-interactive water heaters in operating in the U.S., he said.

This isn't the first load control program for Great River Energy using water heaters: it already has more than 100,000 water heaters in its service territory that it controls. "The notion is, we're going to connect our future water heaters to the Internet (to look for low prices on MISO) ... to be as efficient as we can. We have one of these water heaters installed already."

The new technology covered under the smart grid demonstration project must all be installed and in service by January 2013, so it will be a very busy year for Great River Energy and its two participating distribution co-ops. We'll keep an eye on their progress, and report back here.

On Tuesday, May 1, at 10:30 a.m. CDT, the U.S. Department of Energy and Great River Energy will host a smart grid roundtable with Minnesota energy stakeholders, including co-op consumer members, University of Minnesota researchers, and state government officials. Led by Patricia Hoffman, DOE assistant secretary for the Office of Electricity Delivery and Energy Reliability, the discussion will cover smart grid technology development, the benefits the technology can provide, and factors to be weighed and evaluated. The roundtable discussion, and a keynote address to follow by Hoffman, will be broadcast live on the NRECA website here.

Kate Rowland
Editor-in-Chief, Intelligent Utility magazine
Energy Central
krowland@energycentral.com

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Comments

It's Market Structure, Not Compensation

Chairman Wellinghoff's willingness to champion different kinds of compensation for different kinds of market actors is the wrong approach,.  It's unjust, unreasonable, and highly discriminatory.  In the case of demand response, it legitimizes the notion that consumers can be paid based on estimates rather than on careful measurement.

What Commissioner Wellinghoff should be doing is ordering a careful review of the market structures and the market rules that the Commission has approved over the years to see whether there's a better way to engage demand.  Today's rules work just fine for the largest market actors, but they're too complicated for the millions of residential and small commercial consumers that also need to participate.

Jack Ellis, Tahoe City, CA