FERC Staff issues 2024 Assessment of Demand Response and Advanced Metering

SPP and ISO-NE are at the bottom of the barrel.

Every year during this month, the Federal Energy Regulatory Commission (FERC) issues the Assessment of Demand Response and Advanced Metering report. I have been tracking these reports since 2018. This report is required “by Section 1252(e)(3) of the Energy Policy Act of 2005 (EPAct 2005).”

This year’s report can be downloaded here - https://ferc.gov/news-events/news/ferc-staff-issues-2024-assessment-demand-response-and-advanced-metering

I typically focus on the Table 3-3, which shows the amount of demand response programs in wholesale markets -

Source: FERC 2024 Assessment of Demand Response and Advanced Metering

From the table above, we see that both SPP and ISO-NE have only 1.4% and 1.9% of peak demand participating in their respective markets. Compared to the 10.1% at MISO and 9.3% at CAISO.

This FERC report looks at the past not the future even though if you read the report you will find at the end there is a section on future demand response filings. FERC staff compiles the stats from the State of the Market reports. Typically, the Independent Market Monitors issue their State of the Market reports in May-June time frame, providing data until the end of the previous year. FERC staff is issuing this report based on that information. So, if you wait another 5-6 months, we could see the latest demand response values from the IMM reports next year.

FERC states this regarding SPP’s demand response values - “SPP experienced the largest net annual increase in demand response resources. From 2022 to 2023, the total demand response capability increased by approximately 431 MW, or 119.2%, from 362 MW in 2022 to 793 MW in 2023. In 2023, 64 demand response resources retired from SPP, representing 25 MW of nameplate capacity; however, 56 demand response resources were added with a total of 449 MW”. Page 16.

Regarding ISO-NE, FERC reported “ISO-NE reported approximately 456 MW of Active Demand Capacity Resources enrolled in September 2023, the month with the highest peak demand in ISO-NE. This represents a 117 MW, or 20.4%, decrease from the 573 MW of Active Demand Capacity Resources enrolled in August 2022, the month with the highest peak demand in ISO-NE in 2022.” Page 15.

Here is the same table 3-3 from last year’s report -

Source: 2023 Assessment of Demand Response and Advanced Metering

Unfortunately, FERC staff does not opine on the reasons behind low demand response numbers at SPP for instance. They just say this “SPP reported a total demand response capability of approximately 362 MW from 140 demand response resources. This represents a 186 MW increase from 2021, when SPP reported a total of 176 MW of demand response capability.” Page 18, 2023 Report.

But you will find latest State developments, if you haven’t paid attention during the year like this one - “Wisconsin. On May 31, 2024, the Court of Appeals of Wisconsin issued a decision in Midwest Renewable Association v. Public Service Commission of Wisconsin that held invalid and unenforceable a temporary prohibition of the operation of third party aggregators of retail customers issued by the Public Service Commission of Wisconsin. The Wisconsin Court of Appeals held that the prohibition was not proposed and promulgated in compliance with Wisconsin’s rulemaking requirements.” Page 30, 2024 Report.

The 2024 Report mentions the Court of Appeals of Wisconsin decision regarding Aggregators of Retail Customers, but does not mention lot of states in the Midwest continue to ban ARCs. Look here for a complete list of states that ban ARCs - https://casten.house.gov/media/press-releases/casten-durbin-introduce-legislation-to-eliminate-demand-response-opt-out

In MISO, Michigan and Missouri lifted the ban on ARCs partially. They are covered in the 2023 Report. See Pages 34-35, 2023 Report. But FERC staff does not provide any commentary on whether this partial ban lift on ARCs had an impact on wholesale demand response programs participation in MISO and or SPP markets. For example, FERC staff does not tell the reader if the 431 MW increase in SPP’s wholesale DR in 2023 is due to Missouri’s actions or something else entirely.

I find another problem with this 2024 report, it is not consistent with the 2023 report in this section “4. Potential for Demand Response as a Quantifiable, Reliable Resource for Regional Planning Purposes”. In the 2023 report, FERC staff mentioned the 2023 Organization of MISO States (OMS) DER Survey but there is no mention of the 2024 OMS DER Survey in the 2024 FERC report.

Source: 2024 OMS DER Survey (which FERC staff missed reporting in 2024 report!)

The reporting on “Demand Response Deployments” in Section “3. Annual Resource Contribution of Demand Resources” is also not consistent with the 2023 report. For example, Winter Storm Elliott was a notable event, so, rightfully FERC staff mentioned demand response performance at PJM and MISO during WSE. And even though ERCOT is not FERC jurisdiction, FERC covers ERCOT events, so that’s great. But in the 2024 report, only CAISO, ERCOT and NYISO are covered. These are all single state ISOs. No commentary on how DR performed in multi-state ISOs. There is no mention of how demand response performed in PJM after the capacity market improvements unless I am missing something.

There is also no mention of MISO LMR reform (which is now called Demand Response and Emergency Resources Reform) in the 2024 FERC report. FERC staff also missed reporting on the DR Policy Paper discussions at the SPP.

Overall, this is a good report with lot of information regarding both retail and wholesale demand response programs. My focus above has been on the wholesale demand response programs. Hence, my heartburn about inconsistent reporting on some of those programs at MISO, SPP and PJM.