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Customer Response to Day-ahead Wholesale Market Electricity Prices: Case Study of RTP Program Experience in New York
Goldman, C., N. Hopper, O. Sezgen, M. Moezzi and R. Bharvirkar (LBNL) and B. Neenan, R. Boisvert, P. Cappers, D. Pratt (Neenan Associates).

There is growing interest in policies, programs and tariffs that encourage customer loads to provide demand response (DR) to help discipline wholesale electricity markets. Proposals at the retail level range from eliminating fixed rate tariffs as the default service for some or all customer groups to reinstituting utility-sponsored load management programs with market-based inducements to curtail. Alternative rate designs include time-of-use (TOU), day-ahead real-time pricing (RTP), critical peak pricing, and even pricing usage at real-time market balancing prices. Some Independent System Operators (ISOs) have implemented their own DR programs whereby load curtailment capabilities are treated as a system resource and are paid an equivalent value. The resulting load reductions from these tariffs and programs provide a variety of benefits, including limiting the ability of suppliers to increase spot and long-term market-clearing prices above competitive levels (Neenan et al, 2002; Borenstein, 2002; Ruff, 2002).

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