May 14, 2010
|NEM Upcoming Events|
NEM is planning Industry Policy Leadership Conferences in Pennsylvania and Illinois over the coming months. Please mark your calendars for July 14 and 15, 2010, in Chicago, Illinois. The conference will take place at the University Club of Chicago on 76 East Monroe Street. You may register for the Summer Conference at this hotlink.
Please also mark your calendar for October 18-20, 2010, for Harrisburg, PA. The conference will take place at the Hilton Harrisburg on One North Second Street. You may register for the Fall Meeting in Harrisburg at this hotlink.
Our Annual Winter Executive Committee Meeting is scheduled for January 17-19, 2011, in Miami at the famous Doral Hotel and Resort. Many Thanks to Doug Marcille, Vice Chair of NEM’s Executive Committee and CEO of US Gas and Electric for hosting this upcoming Executive Committee Meeting.
Draft agendas for the upcoming meetings are forthcoming.
|DOE Inquiries into Smart Grid, Consumer Data Access and Utility Communication Requirements|
FCC’s recent National Broadband Plan recommended that the Department of Energy consider consumer data access in smart grid applications, report on state progress on consumer data access and develop best practice guidance for the states in this regard. In furtherance of the FCC Plan recommendations, DOE has issued two requests for information (RFI). The first request for information is aimed at the issue of consumer data access and the second is center on utility communication requirements to support the smart grid. Comments on both RFIs are due July 12, 2010.
In the consumer data access RFI, DOE recognizes that a balance must be struck between “flexibility, innovation, and consumer privacy and choice.” DOE requested comment on the following questions:
(1) Who owns energy consumption data?
(2) Who should be entitled to privacy protections relating to energy information?
(3) What, if any, privacy practices should be implemented in protecting energy information?
(4) Should consumers be able to opt in/opt out of smart meter deployment or have control over what information is shared with utilities or third parties?
(5) What mechanisms should be made available to consumers to report concerns or problems with the smart meters?
(6) How do policies and practices address the needs of different communities, especially low-income rate payers or consumers with low literacy or limited access to broadband technologies?
(7) Which, if any, international, Federal, or State data-privacy standards are most relevant to Smart-Grid development, deployment, and implementation?
(8) Which of the potentially relevant data privacy standards are best suited to provide a framework that will provide opportunities to experiment, rewards for successful innovators, and flexible protections that can accommodate widely varying reasonable consumer expectations?
(9) Because access and privacy are complementary goods, consumers are likely to have widely varying preferences about how closely they want to control and monitor third-party access to their energy information: what mechanisms exist that would empower consumers to make a range of reasonable choices when balancing the potential benefits and detriments of both privacy and access?
(10) What security architecture provisions should be built into Smart Grid technologies to protect consumer privacy?
(11) How can DOE best implement its mission and duties in the Smart Grid while respecting the jurisdiction and expertise of other Federal entities, states and localities?
(12) When, and through what mechanisms, should authorized agents of Federal, State, or local governments gain access to energy consumption data?
(13) What third parties, if any, should have access to energy information? How should interested third-parties be able to gain access to energy consumption data, and what standards, guidelines, or practices might best assist third parties in handling and protecting this data?
(14) What forms of energy information should consumers or third parties have access to?
(15) What types of personal energy information should consumers have access to in real-time, or near real-time?
(16) What steps have the states taken to implement Smart Grid privacy, data collection, and third party use of information policies?
(17) What steps have investor owned utilities, municipalities, public power entities, and electric cooperatives taken to implement Smart Grid privacy, data collection and third party use of
(18) Should DOE consider consumer data accessibility policies when evaluating future Smart Grid grant applications?
In the second RFI, DOE is seeking information to help it “study the communications requirements of electric utilities in order to better inform Federal Smart Grid policy.” DOE is seeking input on the following related questions:
(1) What are the current and future communications needs of utilities, including for the deployment of new Smart Grid applications, and how are these needs being met?
(2) What are the basic requirements, such as security, bandwidth, reliability, coverage, latency, and backup, for smart grid communications and electric utility communications systems in general - today and tomorrow? How do these requirements impact the utilities’ communication needs?
(3) What are other additional considerations (e.g. terrain, foliage, customer density and size of service territory)?
(4) What are the use cases for various smart grid applications and other communications needs?
(5) What are the technology options for smart grid and other utility communications?
(6) What are the recommendations for meeting current and future utility requirements, based on each use case, the technology options that are available, and other considerations?
(7) To what extent can existing commercial networks satisfy the utilities’ communications needs?
(8) What, if any, improvements to the commercial networks can be made to satisfy the utilities’ communications needs?
(9) As the Smart Grid grows and expands, how do the electric utilities foresee their communications requirements as growing and adapting along with the expansion of Smart Grid applications?
The full texts of the Consumer Data Access and Utility Communication Requirements Inquiries are available on the NEM Website.
|NEM Comments on Demand Response Compensation|
NEM submitted comments in support of the Commission’s proposed methodology for compensating demand response (DR) resources in organized wholesale electric markets. The Commission proposed to require that demand response resources participating in RTO/ISO-administered markets, be compensated at the rate of full LMP, in all hours, for demand response reductions. NEM supported the Commission’s proposal as fundamental to supporting federal and state policy goals to enhance the availability of demand response opportunities and participation in our electric markets. NEM has long supported the concept that demand resources should have the equal ability to participate in the markets with supply resources. To permit this, negawatts must receive just and reasonable compensation from the marketplace. The Commission’s proposal will achieve this result.
NEM argued that LMP represents a minimum wholesale price for demand response. In addition, certain DR resources represent a variety of auxiliary services that should also qualify for appropriate compensation. Moreover, the retail value for demand response should capture numerous important externalities:
First, the societal benefit of demand response resources far exceeds LMP. When a DR resource participates in the market, it exerts downward price pressure, for the benefit of all other customers.
Second, when DR resources participate in the market they create a positive environmental benefit by acting as resource, as a negawatt, without creating emissions, or other costly environmental impacts.
Third, robust DR participation will allow for future avoided costs in the marketplace, by avoiding the need to build new generation and transmission through reduced demand. In the near term, this could mean avoiding building peaker plants, and eventually, also mid-merit fleets. Indeed, the reserve margin for DR in PJM this summer alone is estimated to equal the avoidance of the output of a nuclear power plant.
Additionally, when DR resources participate in the market, they create more room for transmission and reduce congestion and thereby reduce congestion-related costs.
The full text of NEM's Comments is available on the NEM Website.
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|Proposed Rulemaking on Pepco Dynamic Pricing Plan|
The Commission is requesting comments on Pepco's proposed dynamic pricing plan. Pepco is seeking approval of its proposed dynamic pricing tariff designs; the applicability of its proposed dynamic pricing tariffs; its proposed phase-in timeline of dynamic pricing; and establishment of a dynamic pricing customer education workgroup to assist with customer communications. Dynamic pricing will first be made available to 5,000 residential customers beginning in 2012, with all residentials becoming eligible in 2013. Dynamic pricing for non-residential customers will be made available to 2,000 customers in 2013, with all non-residential customers becoming eligible in 2014. Customers will have three billing options: 1) Critical Peak Pricing, 2) Critical Peak Rebate; or 3) flat Standard Offer Service pricing. Comments are due June 7, 2010, and reply comments are due June 21, 2010. The full text of the NOPR is available on the NEM Website.
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|Investigation into Natural Gas Retail Competition|
House Joint Resolution 141 directed the Commission to, “commence a collaborative study of natural gas retail competition programs to determine if benefits could be derived from these programs, and to determine whether natural gas retail competition programs could be crafted to benefit Kentucky consumer." The Commission has commenced the investigation. Issues for study will include: 1) the role of the Commission in a competitive marketplace; 2) the obligation to serve; 3) the supplier of last resort; 4) alternative commodity procurement procedures; 5) non-discriminatory access to services offered; 6) codes of conduct for marketers and affiliates of regulated utilities; 7) billing which should include the desirability of the purchase of receivables; 8) certification of suppliers; 9) transition costs; 10) stranded costs; 11) uncollectibles; 12) disconnections; 13) steps necessary to maintain system integrity; 14) access to pipeline storage capacity; and 15) impacts of new natural gas retail competition programs on existing utility services and customers. Interventions are due by May 28, 2010. The full text of the Order Commencing Investigation is available on the NEM Website.
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