▶️1 - Context and need for residential demand response
Purpose of the workshop series on residential demand response is to solicit input and refine design proposals.
ERCOT is working towards establishing a program to attract additional demand response capacity from the residential sector.
The demand for electricity in ERCOT is forecasted to grow significantly, necessitating an all-inclusive resource strategy.
Residential demand response is seen as a promising tool to provide capacity and help balance supply and demand.
Existing smart devices in homes could be leveraged for demand response without needing new installations.
Success of the program will be measured on criteria such as quick development, ease of administration, popularity, and cost-effectiveness.
Stakeholder input is essential to ensure the program fits within broader market policies and design frameworks.
Concerns raised about the impact of the program on price formation in the energy market.
Support expressed for the program as a necessary measure to ensure reliability over the next few years, while acknowledging broader market design challenges.
The program provides incentive payments to retail electric providers and aims for participation from REP and NOIE QSEs, targeting demand response from residential homes during system need times.
System needs have evolved, focusing on highest net load hours instead of highest total peak times, especially during evening hours in summer and morning hours in winter.
The incentive plan targets smart and programmable devices like thermostats, EV charging, backup batteries, and pool pumps for consumption reduction.
The program structure allows predictable revenue for REPs and NOIEs while paying for performance, avoiding booms and busts.
Participation is voluntary without formal registration; ERCOT will not issue performance calls, but REPs/utilities will communicate directly with customers.
Performance assessment is to be based on actual meter data, with a note on the need for a data-sharing framework with NOIEs.
The intention is to reduce barriers for utility participation and expand data sharing for performance verification.
Various stakeholders stress the importance of REPs having flexibility to create value for customers to ensure participation and manage customer experience.
Concerns were raised about market design and potential interference with price formation during net peak load hours, with mentions of similarities to the Performance Credit Mechanism design.
A focus on simplicity and leveraging existing data reporting mechanisms are emphasized for effective design execution.
Feedback sought to ensure coordination with existing PUC frameworks and rules, such as rule 25.186 and associated reporting requirements.
Design elements aim for simplicity and flexibility, enabling mass-scale deployment by reps without ERCOT needing device-level data, but ensuring alignment with energy price signals.
▶️3 - Key design elements, preliminary options and rationale
Non-final design elements discussed to provoke stakeholder feedback.
Emphasis on expeditious program development aligning with demand growth.
Eligibility focuses on demand response from residential households not in other DSP or ERCOT programs.
Program administered by utilities, with ERCOT defining times, incentives, and measurement.
Concerns raised about participation from NOIEs.
The program aims to avoid double counting from existing programs.
Stakeholder feedback sought on design elements and program framework.
Discussion on eligibility criteria and scope under PUC rule 25.186.
Consideration for reporting requirements for new REP programs under 25.186.
Ideas raised on third-party participation and potential inclusion of third parties using a similar reporting framework.
Clarification on DSP programs being discussed are load management programs, excluding dollar incentives for thermostats and similar programs.
Discussion on measurement methods and data submission requirements for participating REPs and NOIEs.
Settlement based on top net load hours, forecasting implications, and reliability benefits discussed.
Debate on using forecasted versus actual net load for simplicity.
Settlement hours considered with the type of net load hour determination discussed.
Financial implications and incentives for residential customers participating in the program.
Stakeholder concerns on potential market distortion and ways to address them.
ERCOT encourages participants to reach out with additional questions or comments via email to be incorporated into the design.
There is a proposal to hold a NOIE specific issue meeting if feasible.
A second workshop is planned for sometime next month to gather more feedback and comments.
ERCOT aims to incorporate input and expertise to refine proposals, avoiding repetitive presentations.
Feedback is sought to potentially wait until after June 2 to plan the next workshop due to the legislative session.
Concern raised about handling ADER issues outside the subcommittee process, and clarification provided that workshops aim for prework before formal stakeholder processes.
Workshops gather diverse participation and are not intended to bypass the stakeholder process but to prepare NPRR language for specific discussions.
CPS Energy is open to discuss workshop dates and comfortable with phone communication.
Clarification asked on the objectives of proposals, specifically regarding cost-effectiveness and measurement for stakeholders.
Stakeholder process and timeline for rolling out proposals discussed, aiming for end of summer to integrate into PRS and other relevant subcommittees/working groups.
Emphasis on moving quickly while allowing adequate time for stakeholder consultation to meet proposal criteria and ensure sustainability.
