NAESB Wholesale Electric Demand Response Measurement

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NAESB Wholesale Electric Demand Response
Measurement Verification Standards

• Eric Winkler, Ph.D., ISO-New England
• Donna Pratt, New York ISO
• Paul Wattles, ERCOT
• January 14, 2009

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Wholesale Demand Response Standards Overview
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Goals/Guidelines

• Consolidate standards for existing and proposed
  Demand Response (DR) products and Performance
  Evaluation methodologies
• Define Common Terms
• Ensure compliance with tariffs, market rules,
  operating procedures, protocols and manuals
• Collaborate with ISO/RTOs, IRC, Retail Leadership
  and NAESB Stakeholders

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Standards Approach

• Measurement and Verification (MV) standards are
  intended to facilitate Demand Response in
  wholesale electricity markets by providing a
  common framework for
• Transparency
• Accessible and understandable MV requirements
  for Demand Response products
• Accountability
• Criteria that will enable the System Operator to
  accurately measure performance of Demand Response
  resources
• Consistency
• Standards applicable across wholesale electricity
  markets

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Standards Applicability

• These standards do not establish requirements
  related to the compensation, design, operation,
  or use of Demand Response services
• System Operators are not required to offer these
  Services and may not currently offer each of
  these Services
• For purposes of these wholesale MV standards,
  Demand Response does not include MV of energy
  efficiency or permanent Load reduction

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Standards Scope and Impact

• Scope Limitation
• Proposal is limited to MV aspects of DR products
• No product eligibility characteristics or other
  participation features are defined in these
  standards
• Impact on Existing Products
• All current ISO/RTO demand response products are
  consistent with the proposed standards
• Local differences may be covered under clauses
  such as System Operator shall specify or
  unless otherwise specified by the System
  Operator, so long as transparency requirements
  are met

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Tariff NERC Standards Conflicts

• System Operators Tariffs, market rules,
  operating procedures, protocols or manuals have
  precedence in the event of any conflict.
• Terms defined in the Definition of Terms section
  are critical to understanding the applicability
  of these MV standards, but do not modify or
  supersede market rule or tariff definitions that
  apply to the compensation, design, operation, or
  use of Demand Response services.
• All entities supplying Demand Response Services
  shall comply with NERC reliability standards.

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Consistency w/ NERC Interest in Demand Side
Management
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Wholesale Demand Response Standards Structure and
Content
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Definitions of Terms

• Definition of Terms was developed to clarify
  specific meanings of terms while providing
  consistency and conformance to
• ISO/RTO Standard Reference
• FERC
• NERC
• Terms Areas
• Demand Response Event Timing
• General Terms

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Demand Response Event Timing
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General Terms
Adjustment Window After-the-Fact
Metering Aggregated Demand Resource Baseline
Baseline Adjustment Baseline Type-I (Interval
Metered) Baseline Type-II (Non-Interval
Metered) Baseline Window Capacity Service
Demand Response Provider Demand Demand Reduction
Value Demand Resource Demand Response Energy
Service Highly-Variable Load Load Maximum Base
Load Meter Before / Meter After Meter Data
Recording Interval Meter Data Reporting
Deadline Metering Generator Output Performance
Window Ramp Rate Regulation Service Reserve
Service System Operator Telemetry Telemetry
Interval Validation, Editing and Estimation
Product Types, Performance Methodologies,
Key Terms
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Demand Response Products

• Energy Service
• A type of Demand Response service in which Demand
  Resources are compensated based solely on Demand
  reduction performance.
• Capacity Service
• A type of Demand Response service in which Demand
  Resources are obligated over a defined period of
  time to be available to provide Demand Response
  upon deployment by the System Operator.
• Reserve Service
• A type of Demand Response service in which Demand
  Resources are obligated to be available to
  provide Demand reduction upon deployment by the
  System Operator, based on reserve capacity
  requirements that are established to meet
  applicable reliability standards.
• Regulation Service
• A type of Demand Response service in which a
  Demand Resource increases and decreases Load in
  response to real-time signals from the System
  Operator. Demand Resources providing Regulation
  Service are subject to dispatch continuously
  during a commitment period. Provision of
  Regulation Service does not correlate to Demand
  Response Event timelines, deadlines and
  durations.

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Product Standards Overview
General
Advance Notification Deployment Time Reduction Deadline Release/Recall Normal Operations Demand Resource Availability Measurement Aggregation Transparency of Requirements
After-the-Fact-Metering
After-the-Fact Metering Requirement Meter Accuracy Details of Meter/Equipment Standards Meter Data Reporting Deadline Meter Data Reporting Interval Clock/Time Accuracy Validating, Editing Estimating (VEE) Method On-Site Generation Meter Requirement
Telemetry
Telemetry Requirement Telemetry Accuracy Telemetry Reporting Interval Other Telemetry Measurements Communication Protocol Governor Control Equipment On-Site Generation Telemetry Requirement
Performance Evaluation
Rules for Performance Evaluation
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Performance Evaluation

• A performance evaluation methodology is used to
  determine the Demand Reduction Value provided by
  a Demand Resource. The standards include
  descriptions of acceptable Baselines and
  alternative performance measurements.
• Maximum Base Load
• Meter Before / Meter After
• Baseline Type-I
• Baseline Type-II
• Metering Generator Output

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Evaluation Methodologies

• Maximum Base Load
• A performance evaluation methodology based solely
  on a Demand Resources ability to reduce to a
  specific level of electricity consumption or
  demand, regardless of its electricity consumption
  or demand at Deployment.
• Meter Before / Meter After
• Metering Before Deployment vs. Metering After
  Reduction Deadline is a performance evaluation
  methodology where electricity consumption or
  demand over a prescribed period of time prior to
  Deployment is compared to similar readings during
  the Sustained Response Period.

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Evaluation Methodologies

• Baseline Type 1 (Interval Metered)
• A Baseline model based on a Demand Resources
  historical interval meter data which may also
  include but is not limited to other variables
  such as weather and calendar data.
• Baseline Type 2 (Non-interval Metered)
• A Baseline model that uses statistical sampling
  to estimate the electricity consumption of an
  Aggregated Demand Resource where interval
  metering is not available on the entire
  population.
• Behind-The-Meter Generation
• A performance evaluation methodology, used when a
  generation asset is located behind the Demand
  Resources revenue meter, in which the Demand
  Reduction Value is based on the output of the
  generation asset.

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Evaluation Standards Overview
Baseline Information
Baseline Window Calculation Type Sampling Precision and Accuracy Exclusion Rules Baseline Adjustments Adjustment Window
Special Processing
Highly-Variable Load Logic On-Site Generation Requirements
Event Information
Use of Real-Time Telemetry Use of After-the-Fact Metering Performance Window Measurement Type
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Performance Evaluation Criteria

• Rules for Performance Evaluation
• Applicable Performance Evaluation methodologies

Performance Evaluation Type Service Type Service Type Service Type Service Type
Performance Evaluation Type Energy Capacity Reserves Regulation
Maximum Base Load ? ? ?
Meter Before / Meter After ? ? ? ?
Baseline Type-I ? ? ?
Baseline Type-II ? ? ?
Metering Generator Output ? ? ? ?
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Wholesale DR Standards Informal Comment Overview
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Informal Comments

• October 2nd ISO/RTO work group presentation of
  recommendation
• October 6th October 22nd Informal Comment
  period open to all interested parties regardless
  of membership status.
• October 24th NAESB posts informal comments to
  website.
• November 4th NAESB compiled comments received by
  ISO/RTO.
• November 25th ISO/RTO work group submits reply
  comments and revised Recommendation.
• December 2nd DSM-EE Subcommittee meeting
  considers comments and revised Recommendation.

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Informal Comment Responders
American Electric Power Service
Corporation Arizona Public Service BGE ConEdiso
n E on U.S. Efficiency Valuation
Organization ELCON EnerNOC EPRI IRC
Standards Review Committee Kansas City Power
and Light National Rural Electric Cooperative
Association Portland General Electric Southern
Company TVA
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Informal Comment Categories

• Baseline representation
• Concern over the amount of flexibility given to
  the System Operator
• Concern regarding the standards effect on
  retail
• Definitions
• Flexibility is Important in the Standards
• General Comments
• Greater Clarity
• Request for Examples
• Specific Comments on the Standards
• Standards Clarification
• Suggested Additions to the Standards
• Suggested Deletions
• Suggested Rewording
• Support
• The application of the standards on negotiated
  contracts
• The draft is a framework, not standards

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Informal Comment Details

• 90 Comments from 14 responders
• 90 Responses provided in late comments from
  ISO/RTO
• 18 Agreeing responses with no changes
  recommended
• 8 Agreeing responses with language changes
• 8 Clarifying responses with no changes
  recommended
• 37 Disagreeing responses with no changes
  recommended
• 19 Responses indicating no clear action may be
  taken based on comment
• 180 Revisions to Recommendation

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Informal Comment Details
Category Agree no change Agree language change Clarify no change Disagree no change Unclear no change Grand Total
Baseline representation     1     1
Concern over amount of flexibility given to the System Operator 3 2 5 10
Definitions   2 2
Flexibility is Important in the Standards   1 1
General Comments   4 2 6
Greater Clarity 1 7 3 7 5 23
Request for Examples 2 3 5
Specific Comments on the Standards 3 1 4 10 1 19
Standard Clarification 2 1 3
Suggested Additions to the Standards 1 4 3 8
Suggested Rewording 1 1
Support 5 5
The application of the standards on negotiated contracts   1 1
The draft is a framework, not standards   3 2 5
Grand Total 18 8 8 37 19 90
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Informal Comment Details
Company Agree no change Agree language change Clarify no change Disagree no change Unclear no change Grand Total
American Electric Power Service Corporation 1     3 2 6
Arizona Public Service   1 1 2
BGE 2 1 3 3 1 10
ConEdison   3 5 8
E on U.S.   1 4 2 7
Efficiency Valuation Organization   4 4
ELCON 2 1 4 1 8
EnerNOC 4 4
EPRI 5 2 7
Entergy 2 4 8 1 15
Kansas City Power and Light 1 1
National Rural Electric Cooperative Association 2 3 1 6
Portland General Electric   1 1
Southern Company 2 1 1 4 8
TVA 1 1 1 3
Grand Total 18 10 6 36 20 90
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Response Highlights

• Request for Examples
• Comments asking for application of the standards
  to existing or proposed programs.
• Concern Want to be careful not to imply a higher
  degree of technical specificity at this time.
• Response A working document supporting the
  responders request for clarity from an example
  is to be provided.
• Implications Additional work needs to be done by
  ISO/RTO group to generate examples of application
  of the standards to existing standards.
• NYISO DR Regulation program tentatively
  identified as possible example program.

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Response Highlights

• All Categories
• Comments that were positive or negative that did
  not contain a suggested change.
• Concern No action can be taken as a result of
  the comment without specificity.
• Response (Positive) Agree
• Response (Negative/Neutral) The responder is
  free to submit a request with enough specificity
  to generate a change to the recommendation. The
  request could be considered now or may be
  addressed once the standards are approved.
• Implications Potential work for ISO/RTO if a
  specific comment comes in during formal comment
  period.

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Response Highlights

• Framework Versus Standards
• Comments raised regarding the lack of specificity
  in Standards.
• Concern Specific approach by ISO/RTO was to find
  common ground versus develop detailed technical
  standards. Specific reference to the term
  Framework on Performance Evaluation led to
  comments suggesting overall standards were a
  framework. However, the term framework implies
  program design which is not the intent.
• Response (General) Commonality in technical
  requirements does not preclude a minimum set of
  standards that may be unique to product
  application but common to product type.
  Standards require transparency and thereby affect
  the product use and uniformity.
• Implications ISO/RTO may be requested to develop
  technical standards in the future.

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Response Highlights

• Requests for greater clarity
• Comments addressing numerous areas requiring
  greater clarity, additional specifications,
  disagreement on standards practices

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Recommendation Changes

• Enhanced definition of Regulation Service
• Modified language of Tariff Conflict and NERC
  Standards
• Modified Telemetry terminology and Standards
• Added clarifying language to Demand Response
  Event Definition
• Refined After-the-Fact Metering Performance
  Measurement terminology
• Refined Applicability
• Refined Aggregation Standard
• Refined Meter Accuracy Standard
• Addition of exclusion rules under Baseline Type-I
  II
• Added applicability of Maximum Base Load to
  Reserve Service
• Corrected consistency of active/passive voice
  usage

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Recent DSM/EE Sub Committee Activity

• December 2, 2008 The group met in Birmingham
  hosted by Alabama Power to review comments and
  vote on the recommendation for Wholesale Electric
  Quadrant standards for MV characteristics for DR
  products and services. After considerable
  discussion, and several votes to amend the
  recommendation the recommendation with the
  amendments put forward by the ISOs and RTOs and
  three separate amendments addressing titling,
  applicability, and additional specificity for the
  definition of Baseline, the motion to adopt the
  revised recommendation was approved with
  significant support with 86.5 percent approval by
  balanced vote. All WEQ segments were present and
  voting. The revised recommendation will go out
  for a thirty day comment period and is now
  considered a work product of the WEQ EC. The
  abbreviated update report was given for the
  Retail market effort. The Retail group plans to
  use the WEQ revised recommendation as a
  foundation for their work.

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Change to Title of Standards

• Business Practices for a Framework for
  Measurement Verification of Wholesale
  Electricity Demand Response

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Change to Applicability

• Applicability of Measurement and Verification
  Standards
• ISO/RTO Administered Markets
• These standards were developed by the Independent
  System Operators (ISO) and Regional Transmission
  Organizations (RTO) in North America through the
  North American Energy Standard Board (NAESB)
  stakeholder process. These standards are
  applicable only to Independent System
  Operator-Regional Transmission Organization
  administered markets in North America. The
  standards reflect business practices applicable
  to measurement and verification of wholesale
  market Demand Response services including the
  following four product/service categories1
• Non-ISO/RTO Markets
• These standards do not apply in markets
  administered by non-ISO/RTOs. Wholesale Demand
  Response standards applicable to non- ISO/RTO
  markets will be developed when required.

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Change to Baseline Definition
A Baseline is an method of estimating estimate of
the electricity that would have been consumed by
a Demand Resource in the absence of a Demand
Response Event. The Baseline is compared to the
actual metered electricity consumption during the
Demand Response Event to determine the Demand
Reduction Value. Depending on the type of Demand
Response product or service, Baseline
calculations may be performed in real-time or
after-the-fact. The System Operator may offer
multiple Baseline models and may assign a Demand
Resource to a model based on the characteristics
of the Demand Resources Load or allow the Demand
Resource to choose a performance evaluation model
consistent with its load characteristics from a
predefined list. A baseline model is the simple
or complex mathematical relationship found to
exist between Baseline Window demand readings and
Independent Variables. A baseline model is used
to derive the Baseline Adjustments which are part
of the Baseline, which in turn is used to compute
the Demand Reduction Value. Independent variable
is a parameter that is expected to change
regularly and have a measureable impact on
demand. Figure 2. below illustrates the concept
of Baseline relative to a Demand Response Event.

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QUESTIONS