By the OGJ Online Staff
HOUSTON, Mar. 20�With summer approaching, the New England grid operator said a new conservation program will allow it to buy down demand and reduce the level of reserve capacity it currently requires.
ISO New England daily requires more than 3,500 Mw of reserve power from generators throughout the Northeast. This "overcommits'' the system, the ISO said, and results in tens of millions of dollars in payments to various plants to run at low levels so they are available to produce power on short notice to meet peak demand.
Under the New England Power Pool (NEPOOL) program filed with the Federal Energy Regulatory Commission Monday, customers capable of 100 kw interruptions or more will be able to participate in the proposed load management program.
Electric customers currently have limited means to anticipate price fluctuations and little chance or incentive to adjust consumption in response to those fluctuations, noted William W. Berry, ISO New England's acting CEO. He said the load response program will allow large electricity users to monitor the hourly price fluctuations in the wholesale electricity market, and will give them incentives to reduce their usage when prices begin to rise.
The program is expected to go into effect by the middle of May. Under the program, customers will be free to enter into agreements with a NEPOOL member of their choosing, subject to state regulatory policy, regardless of whether the company is the customer's current electricity supplier.
If the price of electricity begins to climb, these customers can elect to reduce their consumption until the price drops again. Other customers can also reduce their consumption for system reliability purposes. Either way, the customers will be eligible to be paid for reducing consumption, the ISO said. All compensation is paid through the NEPOOL member that signed up the customer.
"In effect, this allows certain energy consumers to participate in the wholesale electricity market,'' Berry said in a statement. "Because they will be able to monitor real-time market prices, they will be able to defer usage to a later, less expensive time, or run their own generators during these peak periods.''
The ISO said when fully subscribed, the program is expected to reduce the daily required amount of energy by 300-600 Mw and could ultimately result in $30 million/year in savings.
The program will result in less frequent operation of the region's older, less efficient power plants, which are generally used only during periods of intense demand for electricity, the grid operator said, cutting pollution. A reduction in peak demand will result in lower price peaks, the ISO said.
Atlanta-based Retx Inc. will serve as the program's application service provider and will supply its internet-based load management dispatcher to participating customers. These customers will be equipped with the LMD software that allows them to monitor the cost of electricity each hour of the day. For some customers, the cost of the software will be subsidized by NEPOOL.
