2017 

 

 

Assessment of 

 

 

Demand Response and Advanced Metering 

 

 

 

 

Staff Report 

 

 

 

 

Federal Energy Regulatory Commission 

 December 2017 

 

 

 

 

 

 

 

 

 

 The opinions and views expressed in this staff report do not necessarily represent those of the Federal 

Energy Regulatory Commission, its Chairman, or individual Commissioners, and are not binding on the 

Commission. 

ACKNOWLEDGEMENTS

Federal Energy Regulatory Commission Staff Team

Ben Foster, Team Lead

David Burns

Jadon Grove

David Kathan

Michael P. Lee

Samin Peirovi

Cameron Schilling

 

Federal Energy Regulatory Commission Page i

 

TABLE OF CONTENTS

Chapter 1: Introduction............................................................................................................... 1

Chapter 2: Saturation and penetration rate of advanced meters ................................................. 3

Developments and issues in advanced metering..................................................................... 5

State legislative and regulatory activity related to advanced metering............................... 5

Collaborative industry-government efforts....................................................................... 15

Chapter 3: Annual resource contribution of demand resources................................................ 16

Retail demand response programs........................................................................................ 16

Wholesale demand response programs................................................................................. 18

2017 summer demand response deployments....................................................................... 20

2017 solar eclipse.................................................................................................................. 21

Chapter 4: Potential for demand response as a quantifiable, reliable resource for regional 

planning purposes..................................................................................................................... 23

Chapter 5: Existing demand response programs and time-based rate programs and steps taken 

to ensure that, in regional transmission planning and operations, demand resources are 

provided equitable treatment as a quantifiable, reliable resource relative to the resource 

obligations of any load-serving entity, transmission provider, or transmitting party............... 24

FERC demand response orders and activities....................................................................... 26

Other federal demand response activities............................................................................. 27

U.S. Department of Defense ............................................................................................. 27

U.S. General Services Administration.............................................................................. 28

Developments and issues in demand response ..................................................................... 29

State legislative and regulatory activities related to demand response............................. 29

Collaborative industry-government efforts....................................................................... 36

Chapter 6: Regulatory barriers to improved customer participation in demand response, peak 

reduction, and critical period pricing programs........................................................................ 37
Page ii Federal Energy Regulatory Commission

LIST OF TABLES & FIGURES

Table 2-1: Estimates of Advanced Meter Penetration Rates.......................................................... 3

Table 2-2: Estimated Advanced Meter Penetration by Region and Customer Class (2015).......... 5

Table 3-1: Potential Peak Demand Savings (MW) from Retail Demand Response Programs by 

Region (2014 & 2015) .................................................................................................................. 16

Table 3-2: Potential Peak Demand Savings (MW) from Retail Demand Response Programs by 

Region and Customer Class (2015) .............................................................................................. 17

Table 3-3: Demand Resource Participation in U.S. ISO and RTO Demand Response Programs 19

Table 5-1: Customer Enrollment in Incentive-based Demand Response Programs, by Region 

(2014 & 2015)............................................................................................................................... 25

Table 5-2: Customer Enrollment in Time-based Demand Response Programs, by Region 

(2014 & 2015)............................................................................................................................... 26

 
Assessment of Demand Response and Advanced Metering December 2017

Federal Energy Regulatory Commission Page 1

FERC Staff Report 

ASSESSMENT OF DEMAND RESPONSE AND ADVANCED METERING 

Pursuant to Energy Policy Act of 2005 section 1252(e)(3) 

 

December 2017 

Chapter 1: Introduction

This report is the Federal Energy Regulatory Commission staff’s (FERC or Commission staff’s)

twelfth annual report on demand response and advanced metering required by section 1252(e)(3) 

of the Energy Policy Act of 2005 (EPAct 2005). It is based on publicly-available information 

and discussions with market participants and industry experts. Based on the information 

reviewed, it appears that:

• Deployment of advanced meters continues to increase throughout the country,

1 and 

advanced meters are the predominant metering technology installed and operational in 

the United States. According to the Energy Information Administration (EIA),

2 64.7

million advanced meters were operational nationwide in 2015 out of a total of 150.8

million meters, indicating a 42.9 percent penetration rate;

• Over the past year, a number of state regulatory bodies have undertaken or are continuing

broad grid modernization efforts, some of which include large-scale deployment of 

advanced meters. In addition, there has been movement towards further deployment of 

time-of-use rates in several states.

• In the organized wholesale markets, the contribution of demand resources to meeting 

peak demand decreased to 5.7 percent in 2016 from 6.6 percent in 2015;

• The North American Electric Reliability Corporation (NERC) notes that the bulk power 

system is integrating more demand response resources, as well as other distributed and 

renewable energy resources. In addition to collecting and presenting reliability demand 

response data and results, NERC continues its efforts to integrate economic demand 

response within the Demand Response Availability System (DADS) database;

• The North American Energy Standards Board (NAESB) ratified two new books of retail 

demand response business standards, and is expected to complete new Open Field 

Message Bus (OpenFMB) cyber-security model business standards in 2017.

 1 As defined by the U.S. Energy Information Administration (EIA), Advanced Metering Infrastructure (AMI) Meters 

(also referred to throughout this report as “advanced meters”) are 

“Meters that measure and record usage data at a minimum, in hourly intervals and provide usage data at least daily 

to energy companies and may also provide data to consumers. Data are used for billing and other purposes. 

Advanced meters include basic hourly interval meters and extend to real-time meters with built-in two-way 

communication capable of recording and transmitting instantaneous data.”

See EIA, Form EIA-861: Annual Electric Power Industry Report Instructions, 

http://www.eia.gov/survey/form/eia_861/instructions.pdf. 2 EIA, Form EIA-861 Advanced_Meters_2015 data file (re-released November 1, 2016).
December 2017 Assessment of Demand Response and Advanced Metering

Page 2 Federal Energy Regulatory Commission

The report addresses the six requirements included in section 1252(e)(3) of EPAct 2005, which 

directs the Commission to identify and review: 

(A) saturation and penetration rate of advanced meters and communications technologies, 

devices and systems (Chapter 2);

(B) existing demand response programs and time-based rate programs (Chapter 5);

(C) the annual resource contribution of demand resources (Chapter 3);

(D) the potential for demand response as a quantifiable, reliable resource for regional 

planning purposes (Chapter 4);

(E) steps taken to ensure that, in regional transmission planning and operations, demand 

resources are provided equitable treatment as a quantifiable, reliable resource relative to 

the resource obligations of any load-serving entity, transmission provider, or 

transmitting party (Chapter 5); and

(F) regulatory barriers to improved customer participation in demand response, peak 

reduction and critical period pricing programs (Chapter 6).
Assessment of Demand Response and Advanced Metering December 2017

Federal Energy Regulatory Commission Page 3

Chapter 2: Saturation and penetration rate of advanced meters

This chapter reports on penetration rates for advanced meters, and developments related to grid 

modernization and advanced metering. As summarized in Table 2-1 and noted in previous staff 

reports, recent data indicate that advanced meter penetration rates and the number of advanced 

meters in operation continue to increase in the United States. This trend is robust across several 

data sets.

Table 2-1: Estimates of Advanced Meter Penetration Rates

Source

Data As 

Of

Number of 

Advanced 

Meters

(millions)

Total Number of 

Meters

(millions)

Advanced Meter

Penetration Rate

(advanced 

meters as a % of 

total meters)

2008 FERC Survey Dec 2007 6.7 1 144.4 1 4.7%

2010 FERC Survey Dec 2009 12.8 2 147.8 2 8.7%

2012 FERC Survey Dec 2011 38.1 3 166.5 3 22.9%

2011 Form EIA-861 Dec 2011 37.3 4 144.5 4 25.8%

Institute for Electric Efficiency May 2012 35.7 5 144.5 4 24.7%

2012 Form EIA-861 Dec 2012 43.2 6 145.3 6 29.7%

Institute for Electric Innovation July 2013 45.8 7 145.3 6 31.5%

2013 Form EIA-861 Dec 2013 51.9 8 138.1 8 37.6%

Institute for Electric Innovation July 2014 50.1 9 138.1 8 36.3%

2014 Form EIA-861 Dec 2014 58.5 10 144.3 10 40.6%

2015 Form EIA-861 Dec 2015 64.7 11 150.8 11 42.9%

Institute for Electric Innovation Dec 2015 65.6 12 150.8 11 43.5%

Sources:

1 FERC, Assessment of Demand Response and Advanced Metering staff report (2008). 2 FERC, Assessment of Demand Response and Advanced Metering staff report (2011). 3 FERC, Assessment of Demand Response and Advanced Metering staff report (2012). 4 EIA, Form EIA-861 file_2_2011 and file_8_2011 (re-released May 20, 2014). The number of ultimate customers served by 

full-service and energy-only providers is used as a proxy for the total number of meters. 5 The Edison Foundation Institute for Electric Efficiency, Utility-Scale Smart Meter Deployments, Plans & Proposals (2012). 6 EIA, Form EIA-861 and Form EIA-861S: retail_sales_2012 and advanced_meters_2012 data files (October 29, 2013). 7 The Edison Foundation Institute for Electric Innovation, Utility-Scale Smart Meter Deployments: A Foundation for 

Expanded Grid Benefits (2013). 8 EIA, Form EIA-861: Advanced_Meters_2013 data file (re-released June 8, 2015). The number of total meters—including 

AMI, AMR and standard electromechanical meters—was reported for the first time in 2013. Therefore, we no longer use the 

number of customers as a proxy. See note 4 above and Form EIA-861Annual Electric Power Industry Report Instructions, 

Schedule 6, Part D, http://www.eia.gov/survey/form/eia_861/proposed/2013/instructions.pdf. 9 The Edison Foundation Institute for Electric Innovation, Utility-Scale Smart Meter Deployments: Building Block Of The 

Evolving Power Grid (2014). 10 EIA, Form EIA-861: Advanced_Meters_2014 data file (re-released January 13, 2016). 11 EIA, Form EIA-861: Advanced_Meters_2015 data file (re-released November 1, 2016). 12 The Edison Foundation Institute for Electric Innovation, Electric Company Smart Meter Deployments: Foundation for A 

Smart Grid (2016).

Note: Commission staff has not independently verified the accuracy of EIA or Edison Foundation data. Values from source 

data are rounded for publication. 
December 2017 Assessment of Demand Response and Advanced Metering

Page 4 Federal Energy Regulatory Commission

According to 2015 EIA data,3 64.7 million advanced meters were operational out of a total of 

150.8 million meters nationwide, indicating a 42.9 percent penetration rate. This penetration of 

advanced meters represents significant growth over the previous year, when EIA reported that 

58.5 million advanced meters were operational out of a total of 144.3 million meters, 

representing a 40.6 percent penetration rate.4 From 2007 to 2015, the number of advanced 

meters in operation has grown almost ten-fold.

Table 2-2 below provides estimated advanced metering penetration rates by NERC region, 

Alaska (AK) and Hawaii (HI),

5 and retail customer class. Advanced meters represent more than 

half of the meters in three regions: 81.7 percent of meters in Texas Reliability Entity (Texas RE), 

59 percent in Western Electricity Coordinating Council (WECC), and 56.4 percent in Florida 

Reliability Coordinating Council (FRCC). The largest growth in advanced meter penetration 

from 2014 to 2015 took place in Southwest Power Pool Regional Entity (SPP RE) and 

ReliabilityFirst (RF), which saw increases of approximately nine and six percentage points, 

respectively. In contrast, the 2015 figures for WECC and FRCC are slightly lower than in 2014. 

Table 2-2 indicates that, nationwide, advanced meters are fairly evenly distributed across 

customer sectors, accounting for 43.3 percent of residential meters, 40.4 percent of commercial 

meters, and 37.5 percent of industrial meters. However, within regions, the data indicates

significant variation in advanced meter penetration. For example, in Texas RE, ReliabilityFirst, 

SPP RE, WECC, and AK, the residential and commercial sectors have higher rates of advanced 

meter penetration than the industrial sector. In contrast, in FRCC, HI, and MRO, the highest 

penetration of advanced meters is in the industrial sector.

 3 EIA, Form EIA-861 Advanced_Meters_2015 data file (re-released November 1, 2016). 4

Id. EIA data also reveals that advanced meters are now the predominant metering technology installed and 

operational throughout the United States.

5 NERC comprises eight regional entities in the lower 48 states: the Florida Reliability Coordinating Council 

(FRCC), Midwest Reliability Organization (MRO), Northeast Power Coordinating Council (NPCC), ReliabilityFirst 

(RF), SERC Reliability Corporation (SERC), Southwest Power Pool Regional Entity (SPP RE), Texas Reliability 

Entity (Texas RE), and Western Electricity Coordinating Council (WECC). Note that the names of some NERC 

regions have been updated since the previous annual report, specifically ReliabilityFirst (RF), SPP Regional Entity 

(SPP RE) and Texas Reliability Entity (Texas RE). The states of Alaska (AK) and Hawaii (HI) are not subject to 

NERC oversight. See NERC, NERC Regions Map, 

http://www.nerc.com/AboutNERC/keyplayers/PublishingImages/2017_NERC_Regions_May2017.jpg.
Assessment of Demand Response and Advanced Metering December 2017

Federal Energy Regulatory Commission Page 5

Table 2-2: Estimated Advanced Meter Penetration by Region and Customer Class (2015)

Region

Customer Class

Residential Commercial Industrial All Classes

AK 13.4% 4.7% 0.1% 12.0%

FRCC 56.2% 57.6% 69.2% 56.4%

HI 6.1% 7.2% 16.2% 6.2%

MRO 19.9% 15.7% 27.4% 19.5%

NPCC 9.7% 8.8% 12.0% 9.6%

RF 38.1% 28.9% 23.0% 37.1%

SERC 38.9% 37.5% 33.2% 38.7%

SPP RE 49.9% 44.0% 36.4% 48.7%

Texas RE 81.5% 84.2% 62.0% 81.7%

WECC 59.3% 57.5% 47.7% 59.0%

Unspecified 22.8% 20.0% 18.8% 22.4%

All Regions 43.3% 40.4% 37.5% 42.9%

Sources: EIA, 2015 Form EIA-861 Advanced_Meters_2015 data file. 

Note: The transportation sector data collected by EIA contain a relatively small number of meters, 

and are not reported here. In addition, although some entities may operate in more than one 

NERC Region, EIA data have only one NERC region designation per entity. The "unspecified" 

category represents respondents to the EIA-861 short form, which were not required to report a 

NERC region, as well as other respondents that did not specify a single NERC region.

Commission staff has not independently verified the accuracy of EIA data. 

Developments and issues in advanced metering 

State legislative and regulatory activity related to advanced metering

Over the past year, electric utilities in a number of states undertook, or are continuing, largescale deployment of advanced meters and broad grid modernization efforts that can leverage 

existing or proposed deployments of advanced meters. Below we provide updates on these 

activities. 

• Arkansas. On September 19, 2016, Entergy Arkansas filed an application with the 

Arkansas Public Service Commission (Arkansas PSC) for deployment of advanced 

meters and AMI throughout its service territory covering over 701,800 customers.

6

Deployment of advanced meters is proposed to begin in 2019 and span three years.7 On 

August 11, 2017, the Arkansas PSC staff, Entergy Arkansas, and the Attorney General's 

Consumer Utility Rate Advocacy Division reached a settlement agreement to support 

 6 In The Matter of Entergy Arkansas, Inc.’s Application for an Order Finding the Deployment of Advanced Metering 

Infrastructure to be in the Public Interest and Exemption from Certain Applicable Rules, Docket No. 16-060-U Doc. 

18 (Arkansas PSC Sep. 19, 2016), http://www.apscservices.info/pdf/16/16-060-u_18_1.pdf. 7 Id. at 5.
December 2017 Assessment of Demand Response and Advanced Metering

Page 6 Federal Energy Regulatory Commission

Entergy Arkansas’s AMI-deployment application.

8

 On October 30, 2017, the Arkansas 

PSC approved the settlement agreement.9

• California. The California Public Utilities Commission (CPUC) continued to conduct 

proceedings into various aspects of grid modernization; most prominently, the 

Distributed Resources Plans and Integrated Distributed Energy Resources proceedings.10 

In the Distributed Resources Plans proceeding, the CPUC is examining the value of 

distributed energy resources (DERs) to the distribution system by asking utilities to

propose a range of demonstration projects examining various location and technology 

scenarios. In a February 2017 decision, as part of the Distributed Resources Plan 

proceeding, the CPUC granted approval to some demonstration projects, rejected others, 

and approved elements of some other projects.11 In November 2016, the CPUC issued its 

Distributed Energy Resource Action Plan. The Action Plan sets out the long-term vision 

for DERs in the state and policies to support their growth; identifies nearly three dozen 

action elements; and establishes a framework for coordination across the numerous 

current CPUC proceedings that impact or touch on DERs.12

In June 2017, the California ISO (CAISO), California’s three investor-owned utilities, 

and the More Than Smart initiative released a paper examining ways to improve 

coordination between transmission and distribution systems in preparation for higher 

penetrations of demand response and other DERs.13 The report provides a variety of 

recommendations for addressing issues likely to arise in the near-term and mid-term, and 

the group continued to meet throughout 2017 to further advance a transmission and 

distribution coordination framework.

• Colorado. On July 25, 2017, Colorado Public Utilities Commission (Colorado PUC) 

granted a settlement agreement between Colorado PUC staff, Public Service Company of 

Colorado and other parties to implement AMI and voltage sensing meters as part of the 

Advanced Grid Intelligence and Security Initiative.14 Initial deployment of 13,000 

 8 Joint Motion to Approve Settlement Agreement, Excuse Witnesses, and Waive Hearing, Docket No. 16-060-U Doc. 

78 (Arkansas PSC Aug. 11, 2017), http://www.apscservices.info/pdf/16/16-060-U_78_1.pdf. 9 In The Matter of Entergy Arkansas, Inc.’s Application for an Order Finding the Deployment of Advanced Metering 

Infrastructure to be in the Public Interest and Exemption from Certain Applicable Rules, Docket No. 16-060-U, 

Order No. 8 (Arkansas PSC Aug. 28, 2017), http://www.apscservices.info/pdf/16/16-060-U_93_1.pdf. 10 Order Instituting Rulemaking Regarding Policies, Procedures and Rules for Development of Distribution 

Resources Plans, Docket No. R.14-08-013 (California PUC Aug. 20, 2014); and Order Instituting Rulemaking to 

Create a Consistent Regulatory Framework for the Guidance, Planning, and Evaluation of Integrated Demand-Side 

Resource Programs, Docket No. R.14-10-003 (California PUC Oct. 8, 2014), respectively. 11 Decision on Track 2 Demonstration Projects, Docket No. A.15-07-005 (California PUC Jun. 19, 2017), 

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M190/K737/190737689.PDF. 12 CPUC, California’s Distributed Energy Resources Action Plan: Aligning Vision and Action (2017), 

http://www.cpuc.ca.gov/uploadedfiles/cpuc_public_website/content/about_us/organization/commissioners/michael_

j._picker/der%20action%20plan%20(5-3-17)%20clean.pdf. 13 California ISO, et al., Coordination of Transmission and Distribution Operations in a High Distributed Energy 

Resource Electric Grid (2017), http://morethansmart.org/wpcontent/uploads/2017/06/MTS_CoordinationTransmissionReport.pdf. 14 Decision Granting Joint Motion to Approve Unopposed Comprehensive Settlement Agreement; Approving 

Settlement Agreement with Clarifications; Granting Application as Modified by the Settlement Agreement; and 
Assessment of Demand Response and Advanced Metering December 2017

Federal Energy Regulatory Commission Page 7

voltage sensing meters will start in 2017.15 Implementation of advanced metering 

infrastructure and advanced meters throughout Xcel’s service territory in Colorado will 

take place between 2020 and 2024.16

• District of Columbia. As part of an ongoing proceeding on grid modernization, in 

January 2017, the staff of the Public Service Commission of the District of Columbia 

(DC PSC) released a report, Modernizing the Distribution Energy Delivery System for 

Increased Sustainability (MEDSIS). The MEDSIS report: (1) recommended that the DC 

PSC undertake several efforts to revise or adopt new definitions to better account for and 

regulate distributed energy resources (including demand response) and grid 

modernization efforts; (b) proposed pilot project grant parameters related to energy 

delivery system modernization; and (c) requested initial comments on the report by April 

10, and reply comments by May 10, 2017.

17 On November 3, 2017, building on the 

MEDSIS report, the DC PSC proposed several rulemakings to provide regulatory clarity 

in order to facilitate additional public input into modernizing the District’s electricity

grid.18

• Hawaii. On June 30, 2017, Hawaiian Electric Company (HECO Companies) filed a 

revised draft Grid Modernization Strategy19 in response to the Hawaii Public Utilities 

Commission’s (Hawaii PUC) concern over the cost of an initial plan filed by HECO 

Companies in March 2016.

20 The new proposal includes “surgical” deployment of 

advanced meters to customers with distributed resources and customers that wish to 

participate in demand response and variable rate programs.

21 On August 29, 2017, the 

 Granting a Certificate of Public Convenience and Necessity, Proceeding No. 16A-0588E (Colorado PUC Jul. 25, 

2017), https://www.dora.state.co.us/pls/efi/efi_p2_v2_demo.show_document?p_dms_document_id=869033. 15 In The Matter Of The Application Of Public Service Company Of Colorado For An Order Granting A Certificate 

Of Public Convenience And Necessity For Distribution Grid Enhancements, Including Advanced Metering And 

Integrated Volt-VAR Optimization Infrastructure, Proceeding No. 16A-0588E (Colorado PUC Jul. 25, 2017) at 5, 

https://www.dora.state.co.us/pls/efi/efi_p2_v2_demo.show_document?p_dms_document_id=869033. 16 Id. 17 MEDSIS Staff Report, Formal Case No. 1130 (DC PSC Jan. 25, 2017), 

http://edocket.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1130&docketno=88&flag=D&show_result=

Y. 

18 In the Matter of the Investigation into Modernizing the Energy Delivery System for Increased Sustainability, 

Formal Case No. 1130 (DC PSC Nov. 3, 2017), https://edocket.dcpsc.org/apis/pdf_files/2ef64b14-b635-42ae-b2d2-

883f75082567.pdf. 19 Hawaiian Electric Company, Modernizing Hawai’i’s Grid for Our Customers (2017), 

https://www.hawaiianelectric.com/Documents/about_us/investing_in_the_future/grid_modernization_strategy_draft.

pdf. 20 In the Matter of the Application of Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc., and 

Maui Electric Company, Limited For Approval to Commit Funds in Excess of $2,500,000 for the Smart Grid 

Foundation Project, to Defer Certain Computer Software Development Costs, to Recover Capital and Deferred 

Costs through the Renewable Energy Infrastructure Surcharge, and Related Requests, Docket No. 2016-0087 

(Hawaii PUC Jan. 4, 2017).

21 Hawaiian Electric Company, Modernizing Hawai’i’s Grid for Our Customers (2017) at 86, 

https://www.hawaiianelectric.com/Documents/about_us/investing_in_the_future/grid_modernization_strategy_draft.

pdf. 
December 2017 Assessment of Demand Response and Advanced Metering

Page 8 Federal Energy Regulatory Commission

Hawaii PUC opened a new proceeding to serve as a repository for HECO Companies’

Final Grid Modernization Strategy and related filings.

22

• Illinois. In 2016, Commonwealth Edison (ComEd)—the state’s largest utility—installed 

over 1.1 million advanced meters in its service territory, as part of its Advanced Metering 

Infrastructure Program.23 The advanced meters helped ComEd avoid nearly 37,000 

outage restoration-related truck dispatches in 2016 due to the ability to identify outages 

remotely, resulting in significant operational savings for customers.24 ComEd plans to 

supply its entire service territory with advanced meters by the end of 2019.25 Ameren 

Illinois, the state’s second largest utility, also plans to supply its entire service territory 

with advanced meters by 2019.26

In March 2017, the Illinois Commerce Commission (ICC) initiated a collaborative grid 

modernization process called NextGrid,

27 which will explore several grid modernization 

topics, including investment in smart grid technology such as advanced meters and smart 

inverters over an 18 month period.

28 The NextGrid process comes after state enactment 

of the December 2016 Future Energy Jobs Act, which includes comprehensive changes to 

various aspects of Illinois energy policy.29

In July 2017, the ICC finalized the Open Data Access Framework, which will govern 

access to utility customer energy usage data.30 ComEd and Ameren are first addressing

the framework requirements by creating "data roadmaps" for customer data access.

• Indiana. In February 2017, Vectren South filed a petition with the Indiana Utility 

Regulatory Commission (Indiana URC) for approval of a seven year grid modernization 

plan.31 Vectren proposed to install 153,000 advanced meters between 2017 and summer 

 22 Instituting a Proceeding Related to the Hawaiian Electric Companies’ Grid Modernization Strategy, Docket No. 

2017-0226 (Hawaii PUC Aug. 29, 2017), at 1, 

http://dms.puc.hawaii.gov/dms/DocumentViewer?pid=A1001001A17H30B05116F00989. 23 Commonwealth Edison, Smart Grid Advanced Metering Annual Implementation Progress Report (2017) at 4, 

https://www.icc.illinois.gov/downloads/public/2017%20AIPR%20FINAL.pdf. 24 Id. at 34. 25 Id. at 64. 26 Verified Petition for Approval of Smart Grid Advanced Metering Infrastructure Deployment Plan, Docket No. 12-

0244 (ICC Sep. 22, 2016), https://www.icc.illinois.gov/downloads/public/edocket/434480.pdf. 27 Regarding Illinois’ Consideration of the Utility of the Future: “NextGrid” Grid Modernization Study, Illinois 

Commerce Commission on its own Motion (ICC Mar. 22, 2017), 

https://www.icc.illinois.gov/downloads/public/ICC%20Utility%20of%20the%20Future%20Resolution.pdf. 28 Press Release, Illinois Commerce Commission, ICC Releases Initial Comments in NextGrid (2017), 

https://www.icc.illinois.gov/downloads/public/Press%20Release%20-

%20%20Initial%20NextGrid%20Comments%20(FINAL).pdf. 29 State of Illinois, Future Energy Jobs Bill (SB 2814), Public Act 99-0906, enacted December 7, 2016, 

http://www.ilga.gov/legislation/publicacts/99/PDF/099-0906.pdf. 30 Proceeding to Adopt the Illinois Open Data Access Framework, Docket No. 14-0507 (ICC Jul. 26, 2017), 

https://www.icc.illinois.gov/downloads/public/edocket/450960.pdf. 31 Verified Petition of Southern Indiana Gas and Electric Company d/b/a Vectren Energy Delivery of Indiana, Inc., 

Cause No. 44910 (Indiana URC Feb. 23, 2017), 
Assessment of Demand Response and Advanced Metering December 2017

Federal Energy Regulatory Commission Page 9

2019, with an initial deployment of 2,000 meters to determine the need for any 

improvements in meter installation procedures and customer communications prior to the 

full rollout.

32 Subsequently, Vectren South agreed in a settlement to remove the AMI 

portion from the seven-year plan, and proposed to defer cost recovery of its AMI 

program until its next rate proceeding.

33

• Iowa. In January 2017, Interstate Power and Light (IPL) filed with the Iowa Utilities 

Board a request for waiver of full analog meter testing since IPL proposes to deploy 

advanced meters.

34 IPL proposes to install approximately 470,000 residential and small 

commercial advanced meters between 2017 and 2019.35 IPL plans to recover the total 

costs of AMI and advanced meters in future rate cases once in service.36 On March 22, 

2017, the Iowa Utilities Board (IUB) granted the waiver for three years from the approval 

date or until IPL completes meter replacement, whichever comes first.37

• Louisiana. In November 2016, Entergy Louisiana filed an application with the 

Louisiana Public Service Commission (Louisiana PSC) to deploy advanced meters to 1.1

million electric customers.

38 Entergy Louisiana proposes a first phase of deployment of 

advanced meters in 2019 with full implementation by the end of 2021.

39 On June 30, 

2017, the Louisiana PSC approved Entergy Louisiana’s proposal through a settlement 

agreement.40 

 https://iurc.portal.in.gov/_entity/sharepointdocumentlocation/32b950ff-eff9-e611-80fd-1458d04e2f50/bb9c6bbafd52-45ad-8e64-a444aef13c39?file=44910_Vectren%20South_Electric%20TDSIC%20Petition_022317.pdf. 32 Southern Indiana Gas and Electric Company d/b/a Vectren Energy Delivery of Indiana, Inc. (Vectren South), 

Exhibit No. 4 (Direct Testimony of Daniel C. Bugher), Cause No. 44910 (Indiana URC Feb. 23, 2017) at 16, 

https://iurc.portal.in.gov/_entity/sharepointdocumentlocation/267e1e47-01fa-e611-8104-1458d04e8ff8/bb9c6bbafd52-45ad-8e64-

a444aef13c39?file=44910_Vectren%20South_No%204_Direct%20Testimony%20and%20Attachments_Bugher_02

2317.pdf. 33 Verified Petition of Southern Indiana Gas and Electric Company d/b/a Vectren Energy Delivery of Indiana, Inc., 

for Approval of Petitioner’s 7-Year Electric TDSIC Plan for Eligible Transmission, Distribution and Storage System 

Improvements, Pursuant to Ind. Code §8-1-39-10(A), for Authority to Defer Costs for Future Recovery, and 

Approving Inclusion of Vectren South’s TDSIC Plan Projects in its Rate Base in its Next General Rate Proceeding 

Pursuant to Ind. Code §8-1-2-23, Cause No. 44910 (Indiana URC Jul. 7, 2017), 

https://iurc.portal.in.gov/_entity/sharepointdocumentlocation/247f8d20-3463-e711-810d-1458d04e9f68/bb9c6bbafd52-45ad-8e64-

a444aef13c39?file=44910_Vectren%20South_Submission%20of%20Proposed%20Order_070714.pdf. 34 Request for Temporary Waiver of 199 IAC 1.3, Docket No. WRU-2017-0004-0150 (IUB Jan. 23, 2017), 

https://efs.iowa.gov/cs/groups/external/documents/docket/mdax/njey/~edisp/1612040.pdf. 35 Id. at 4. 36 Id. at fn. 9. 37 In Re: Interstate Power and Light Company, Docket No. WRU-2017-0004-0150 (IUB Mar. 22, 2017) 

https://efs.iowa.gov/cs/groups/external/documents/docket/mdax/nje3/~edisp/1617953.pdf. 38 Application of Entergy Louisiana, LLC for Approval to Implement a Permanent Advanced Metering System and 

Request for Cost Recovery and Related Relief, Docket No. U-34320 (Louisiana PSC Nov. 22, 2016), 

http://lpscstar.louisiana.gov/star/ViewFile.aspx?Id=51fab1da-0282-4147-a902-7a64b82a128b. 39 Id. at 9. 40 In Re Application of Entergy Louisiana, LLC for Approval to Implement a Permanent Advanced Metering System 

and Request for Cost Recovery and Related Relief, Docket No. U-34320 (Louisiana PSC Jun. 30, 2017), 

http://lpscstar.louisiana.gov/star/ViewFile.aspx?Id=f12761ba-f152-4791-b184-2f3f577b3034. 
December 2017 Assessment of Demand Response and Advanced Metering

Page 10 Federal Energy Regulatory Commission

• Maryland. On August 15, 2017, Southern Maryland Electric Cooperative (SMECO), in 

accordance with a 2013 Maryland Public Service Commission (Maryland PSC) Order,41

released its latest metrics report on advanced meter deployments.42 In the 2017 report, 

SMECO reported a total installation of 96,546 advanced meters covering 60 percent of 

customers in its service territory. Throughout 2017, SMECO plans to install 

approximately 14,000 advanced meters per month43 with full deployment expected by the 

first quarter of 2018.44

As part of a Maryland PSC grid modernization proceeding,

45 the Maryland PSC is 

addressing rate design, electric vehicles, competitive markets and customer choice

(including enabling utilities that have deployed AMI to begin instituting a data sharing 

system), the interconnection process, energy storage, and distribution system planning. 

The Maryland PSC held an initial public hearing in December 2016 and initiated a series 

of four working groups to study rate design, competitive markets and consumer choice, 

interconnection, and energy storage.

• Massachusetts. As reported in the 2016 version of this staff report,46 Eversource and 

National Grid submitted grid modernization plans in 2015 to achieve “advanced metering 

functionality”47 as required by the Massachusetts Department of Public Utilities 

(Massachusetts DPU). Eversource plans to initiate a program allowing customers to 

replace their existing meters with advanced meters on an opt-in basis.

48 The opt-in 

 41 In the Matter of the Request of Southern Maryland Electric Cooperative, Inc., for Authorization to Proceed with 

Implementation of an Advanced Metering Infrastructure System, Case No. 9294, (Maryland PSC Jun. 21, 2013), 

http://webapp.psc.state.md.us/newIntranet/Casenum/NewIndex3_VOpenFile.cfm?ServerFilePath=C:\Casenum\9200

-9299\9294\\43.pdf. 42 AMI Metrics Reporting, Q2 2017, Case No. 9294 (Maryland PSC Aug. 15, 2017), 

http://webapp.psc.state.md.us/newIntranet/Casenum/NewIndex3_VOpenFile.cfm?filepath=C:\Casenum\9200-

9299\9294\Item_89\\CaseNo9294MetricsV8-2017Q2.pdf. 43 SMECO, SMECO will be Installing Smart Meters in 2017 (Dec. 2016), https://smeco.coop/news/cooperativereview/201612/articleonejump. 44 SMECO, AMI Installation Update (Aug. 2016), https://smeco.coop/news/cooperativereview/201608/articlefourjump. 45 In the Matter of Transforming Maryland’s Electric Distribution Systems to Ensure that Electric Service is 

Customer-Centered, Affordable, Reliable and Environmentally Sustainable in Maryland, Notice of Public 

Conference, Public Conference 44 (Maryland PSC Sep. 26, 2016), http://www.psc.state.md.us/wpcontent/uploads/PC44-Notice-of-Public-Conference.pdf. 46 FERC, Assessment of Demand Response and Advanced Metering at 9 (2016), https://www.ferc.gov/legal/staffreports/2016/DR-AM-Report2016.pdf. 47 As defined by the Massachusetts DPU, advanced metering functionality includes: (1) the collection of customers’ 

interval usage data, in near real time, usable for settlement in the ISO-NE energy and ancillary services markets; (2) 

automated outage restoration and notification; (3) two-way communication between customers and the electric 

distribution company; and (4) communication with and control of a customer’s appliances (with permission). See 

Investigation by the Department of Public Utilities on its own Motion into Modernization of the Electric Grid, 

Docket No. 12-76-B (Massachusetts DPU Jun. 12, 2014) at 11, 

http://170.63.40.34/DPU/FileRoomAPI/api/Attachments/Get/?path=12-76%2fOrder_1276B.pdf. 48 NSTAR Electric Company and Western Massachusetts Electric Company, each d/b/a Eversource Energy, 

Incremental Grid Modernization Plan, Docket Nos. 15-122/15-123 (Massachusetts DPU Feb. 3, 2017), 

http://170.63.40.34/DPU/FileRoomAPI/api/Attachments/Get/?path=15-122%2fEversource_IGMP_2317.pdf. See 

also Petition of NSTAR Electric Company and Western Massachusetts Electric Company, each d/b/a Eversource 
Assessment of Demand Response and Advanced Metering December 2017

Federal Energy Regulatory Commission Page 11

program, Eversource estimates, would limit the amount of advanced meter replacements 

deployed from 2018 through 2033.49 Eversource argues that a full deployment of 

advanced meters to all its customers would not be cost-effective.50 

Also in August 2017, the Massachusetts DPU held an evidentiary hearing related to 

National Grid’s proposed grid modernization plan from August 2015. The plan includes 

three potential paths that would result in full deployment of advanced meters and replace 

1.3 million meters.51

In addition to the ongoing grid modernization proceeding, Eversource proposed a Grid 

Modernization Base Commitment, which includes several investments to modernize its 

distribution grid: (1) creation of a distribution system network operator ($44 million), (2) 

distribution system automation ($84 million), (3) foundational technology for a 

distribution management system ($111 million), (4) energy storage research and 

demonstration projects ($100 million), (5) customer tools for Distributed Energy 

Resource (DER) integration ($15 million), and (6) electric vehicle infrastructure and 

vehicle conversions ($45 million).52 Eversource’s goal for its distribution system is twoway flow capability, intelligent automation, and active management by network operators 

that will allow for uses such as demand-side management and generation control.53 To 

achieve this goal, a distribution system operator will allow Eversource to turn real-time 

data into actionable information to complement investment in devices and software 

systems that make their distribution grid more automated.54

• Mississippi. In November 2016, Entergy Mississippi filed an application with the 

Mississippi Public Service Commission (Mississippi PSC) for approval to implement 

advanced meters throughout its service territory covering 445,000 customers with an optout provision.55 Entergy Mississippi estimates a three-year deployment schedule 

 

Energy for Approval of Grid Modernization Plan, Docket No. 15-122 (Massachusetts DPU Aug. 19, 2015), 

http://170.63.40.34/DPU/FileRoomAPI/api/Attachments/Get/?path=15-122%2fInitial_Filing_Petition.pdf. 49 Information Request Response DPU-4-2, Docket Nos. 15-122/15-123 (Massachusetts DPU Mar. 31, 2017), 

http://170.63.40.34/DPU/FileRoomAPI/api/Attachments/Get/?path=15-122%2fDPU4002.pdf. 50 Reply Brief of Eversource Energy, Docket Nos. 15-122/15-123 (Massachusetts DPU Aug. 18, 2017) at 6, 10-11, 

http://170.63.40.34/DPU/FileRoomAPI/api/Attachments/Get/?path=15-122%2fEversource_Reply_Brief_81817.pdf. 51 Petition of National Grid for Approval of its Grid Modernization Plan, Docket No. 15-120 (Massachusetts DPU 

Aug. 19, 2015) at 14-17, http://170.63.40.34/DPU/FileRoomAPI/api/Attachments/Get/?path=15-

120%2fGrid_Mod_PlanFinalRedacted_Boo.pdf. 52 Petition of NSTAR Electric Company and Western Massachusetts Electric Company, each d/b/a Eversource 

Energy, Volume 3, Grid Modernization Base Commitment Investment Plan, Docket No. 17-05 (Massachusetts DPU 

Jan. 17, 2017), http://170.63.40.34/DPU/FileRoomAPI/api/Attachments/Get/?path=17-

05%2fESGMBC2_Investment_Plan.pdf. 53 Eversource Grid Modernization Base Commitment, Docket No. 17-05 (Massachusetts DPU Jan. 17, 2017) at 17, 

http://170.63.40.34/DPU/FileRoomAPI/api/Attachments/Get/?path=17-05%2fESGMBC2_Investment_Plan.pdf. 54 Id. at 14-16. 55 Application for Approval of Advanced Metering Infrastructure and Related Modernization Improvements, Docket 

No. 2016-UA-261 (Mississippi PSC Nov. 2016), 

http://www.psc.state.ms.us/InSiteConnect/InSiteView.aspx?model=INSITE_CONNECT&queue=CTS_ARCHIVE

Q&docid=380265. 
December 2017 Assessment of Demand Response and Advanced Metering

Page 12 Federal Energy Regulatory Commission

beginning in 2019.56 On May 1, 2017, the Mississippi PSC approved Entergy’s 

proposal.57

• New Hampshire. In March 2017, New Hampshire’s Grid Modernization Working 

Group submitted its final report to the New Hampshire Public Utilities Commission.58

The effort covered distribution system planning, advanced metering functionality, rate 

design, customer data and education, and utility cost recovery and financial incentives. 

The working group report recommends that each utility develop grid modernization plans 

with a stakeholder engagement process.

• New Mexico. In February 2016, Public Service Company of New Mexico (PNM) filed a 

proposal with the New Mexico Public Regulation Commission (New Mexico PRC) to 

deploy advanced meters to its 531,000 customers.59 Public hearings were held in 

February and March 2017 and a decision by the New Mexico PRC is expected by the end 

of 2017.60 If the proposal is approved, PNM expects deployment to begin in early 2018 

and end in 2019.61

• New York. On April 28, 2017, National Grid filed a rate plan with the New York Public 

Service Commission (New York PSC) seeking, among other things, approval to deploy 

advanced meters.62 Over the span of four years, beginning in 2021, National Grid’s plan 

would result in a deployment of more than 1.6 million advanced meters across its service 

territory.63

In March 2017, the New York PSC published an order on Distributed System 

Implementation Plans.64 In the order, the New York PSC provided guidance to utilities 

 56 Id. at 11. 57 In Re Application for Approval of Advanced Metering Infrastructure and Related Modernization Improvements, 

Docket No. 2016-UA-261 (Mississippi PSC May 1, 2017), 

http://www.psc.state.ms.us/InSiteConnect/InSiteView.aspx?model=INSITE_CONNECT&queue=CTS_ARCHIVE

Q&docid=386172. 58 Grid Modernization in New Hampshire, Grid Modernization Working Group, Final Report (Mar. 20, 2017), 

http://www.raabassociates.org/Articles/NH%20Grid%20Mod%20Final%20Report%203-20-2017.pdf. 59 In the Matter of the Application of Public Service Company of New Mexico for Prior Approval of the Advanced 

Metering Infrastructure Project, Determination of Ratemaking Principles and Treatment, and Issuance of Related 

Accounting Orders, Case No. 15-00312-UT (New Mexico PSC Feb. 2016), 

https://www.pnm.com/documents/396023/428013/2016+Customer+Notice+AMI.pdf/55282147-12f9-4635-875a2b49bf967a2a. 60 Public Service Company of New Mexico, What is Smart Meter Infrastructure?, https://www.pnm.com/ami. 61 Id. 62 Niagara Mohawk Power Corporation d/b/a National Grid Proceeding On Motion Of The Commission As To The 

Rates, Charges, Rules And Regulations Of Niagara Mohawk Power Corporation For Electric And Gas Service, 

Book 9 (Testimony and Exhibits of Advanced Metering Infrastructure Panel), Case No. 17-E-0238 (New York PSC 

Apr. 28, 2017), http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={224F9FD6-8CFA-47E4-

98A9-88F5B0A149A4}. 63 Id. at 7. 64 In the Matter of Distributed System Implementation Plans, Order on Distributed System Implementation Plan 

Filings, Case No. 16-M-0411 (New York PSC Mar. 9, 2017), 
Assessment of Demand Response and Advanced Metering December 2017

Federal Energy Regulatory Commission Page 13

on hosting capacity, applying for interconnection online, non-wire alternatives, data 

privacy, and energy storage, as a part of the state’s energy strategy, “Reforming the 

Energy Vision.”

• North Carolina. As part of the North Carolina Utilities Commission’s (NCUC) 2016 

Biennial Integrated Resource Plans and Renewable Energy and Energy Efficiency 

Portfolio Standard Compliance proceeding, the investor-owned utilities in North Carolina 

were required to submit 5-year Smart Grid Technology Plans. The NCUC approved the 

utilities' plans in March 2017, but also requested that NCUC staff, utilities and all 

interested parties continue discussing potential rule changes for customer data access.65

The plans submitted by the utilities vary and include a wide mix of smart grid 

technologies, including advanced meter deployment. The utilities subsequently filed 

2017 updates to their integrated resource plans in the same docket.66

• Ohio. On February 1, 2017, the Public Utilities Commission of Ohio (PUCO) approved 

AEP Ohio’s application to implement Phase 2 of its gridSMART Project.67 AEP Ohio 

will install AMI for approximately 894,000 customers over four years beginning in 

2017.

68 As part of a settlement agreement, AEP Ohio is required to develop time-of-use 

rate options and programs. Customers are expected to incur $200 million in operational 

savings from AMI deployment.69

PUCO announced the launch of a PowerForward grid modernization investigation in 

March 2017.70 PUCO intends to use the study to establish a path for future grid 

modernization projects and regulations that can improve the consumer experience. After 

conducting hearings on utility reform and new technologies, PUCO expects to begin 

formal ratemaking and regulatory proceedings to address grid modernization in early 

2018.

• Oregon. In July 2017, the Oregon legislature enacted a bill requiring the Oregon Public 

Utility Commission (Oregon PUC) to investigate grid modernization.71 The legislation

requires the Oregon PUC to establish a public process to investigate developing industry 

 

http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={35E255DD-92FF-420B-8363-

895892992103}. 65 Order Accepting Smart Grid Technology Plans, Docket No. E-100, Sub 147 (North Carolina UC Mar. 29, 2017), 

http://starw1.ncuc.net/ncuc/ViewFile.aspx?Id=cd65f9a8-2bd9-457d-96d2-4df1a454a219. 66 Duke Energy Carolinas, North Carolina 2017 Integrated Resource Plan (Updated Report) (Sep. 1, 2017), 

http://starw1.ncuc.net/NCUC/ViewFile.aspx?Id=05fb2b10-a879-4a9e-a881-f9cbb60a69a5; and Duke Energy 

Progress, North Carolina Integrated Resource Plan (Update Report) (Sep. 1, 2017), 

http://starw1.ncuc.net/NCUC/ViewFile.aspx?Id=040feb17-3f8b-4b6b-b620-b1cac673e7e1. 67 In the Matter of the Application of Ohio Power Company to Initiate Phase 2 of its gridSMART Project and to 

Establish the gridSMART Phase 2 Rider, Case No. 13-1939-EL-RDR (Ohio PUC Feb. 1, 2017), 

http://dis.puc.state.oh.us/TiffToPDf/A1001001A17B01B42659J00896.pdf. 68 Id. at 8. 69 Id. at 20. 70 Ohio PUC, PowerForward, https://www.puco.ohio.gov/industry-information/industry-topics/powerforward/. 71 State of Oregon, SB 978, 2017 Regular Session, enacted on August 16, 2017, 

https://olis.leg.state.or.us/liz/2017R1/Downloads/MeasureDocument/SB978/Enrolled.
December 2017 Assessment of Demand Response and Advanced Metering

Page 14 Federal Energy Regulatory Commission

trends, technologies and how policy drivers in the electricity sector affect the existing 

regulatory system and incentives currently employed by the Oregon PUC. Its 

investigation could include advanced meters. If warranted, the Oregon PUC may 

consider changes to its existing rules. 

• Rhode Island. In March 2017, the Governor of Rhode Island directed the Rhode Island 

Public Utilities Commission (Rhode Island PUC), Office of Energy Resources, and 

Division of Public Utilities and Carriers to design a new regulatory framework for Rhode 

Island's electric system.72 Distribution system planning is being considered as part of this 

effort. In response, on June 15, 2017, the Rhode Island PUC held a technical meeting on 

“Grid Connectivity and Functionality,” as part of a grid modernization initiative called 

Power Sector Transformation.73 On August 15, 2017, the Rhode Island PUC also 

submitted initial proposals to stakeholders regarding Distribution System Planning74

improvements, inviting stakeholders to comment on the proposals to further inform the 

PUC on next steps.

75 In November 2017, the three agencies delivered their phase one 

report to the Governor, recommending, among other things, that National Grid develop a 

plan for rolling out an advanced meter platform that provides certain capabilities, 

including time-varying rates.

76

• Texas. On July 18, 2017, Entergy Texas filed an application with the Public Utility 

Commission of Texas (PUCT) for approval of its advanced metering system plan.77

Entergy Texas proposes to deploy 477,000 advanced meters over a three year deployment 

period beginning in 2019.78 Entergy Texas reached a settlement in principle with 

Commission staff and the Office of Public Utility Counsel and on September 11, 2017,

Entergy Texas filed a motion with the PUCT to abate the remaining procedural 

schedule.79

 72 Letter to Rhode Island PUC, Rhode Island Office of Energy Resources, and Rhode Island Division of Public 

Utilities and Carriers, (Office of the Governor of Rhode Island, Mar. 2, 2017), 

http://www.ripuc.ri.gov/utilityinfo/electric/GridMod_ltr.pdf. 73 Rhode Island Public Utilities Commission, Power Sector Transformation Initiative (2017), 

http://www.ripuc.org/utilityinfo/electric/PST_home.html. 74 Initial Proposals for Distribution System Planning Improvements and Request for Stakeholder Comment (Rhode 

Island PUC Aug. 15, 2017), http://www.ripuc.org/utilityinfo/electric/DSP_Workstream_proposals_8_15.pdf. 75 Id. 76 Rhode Island Division of Public Utilities & Carriers, Office of Energy Resources and Public Utilities 

Commission, Rhode Island Power Sector Transformation: Phase One Report to Governor Gina M. Raimondo (Nov. 

2017) at 10, 41-42, Appendix II, http://www.ripuc.org/utilityinfo/electric/PST%20Report_Nov_8.pdf. 77 Application of Entergy Texas, Inc. for Approval of Advanced Metering System (AMS) Deployment Plan, AMS 

Surcharge, and Non-Standard Metering Service Fees, Docket No. 47416 (PUCT Jul. 18, 2017), 

http://interchange.puc.state.tx.us/WebApp/Interchange/Documents/47416_1_948263.PDF. 78 Id., Attachment A, Entergy Texas, Inc.’s Advanced Metering System Deployment Plan, at 17. 79 Id., Unopposed Motion to Abate the Procedural Schedule (PUCT Sep. 11, 2017), 

http://interchange.puc.state.tx.us/WebApp/Interchange/Documents/47416_47_954390.PDF.
Assessment of Demand Response and Advanced Metering December 2017

Federal Energy Regulatory Commission Page 15

Collaborative industry-government efforts

On March 7, 2016, NAESB, working with the Smart Grid Interoperability Panel (SGIP)80 and 

other stakeholders, developed and ratified voluntary Open Field Message Bus (OpenFMB) 

business standards. An OpenFMB architecture enables communication and information 

exchange between advanced meters and other utility and third-party devices (e.g., relays, 

inverters, reclosers). By the end of 2017, NAESB expects to complete cyber-security model 

business standards for the OpenFMB architecture.81  

In addition, the SGIP82 launched an OpenFMB collaboration website in November 2016.83 SGIP 

published OpenFMB software with installation and configuration instructions, as well as 

information and utility use cases that support distributed intelligence. SGIP expects the 

distribution of OpenFMB software code using the open source model to increase the base of 

utility participation, assist utilities in developing new applications to solve interoperability and 

legacy systems integration issues, and lead to new innovations.84

 80 SGIP has since merged with the Smart Electric Power Alliance. See SGIP, SEPA and SGIP Announce Intent to 

Merge, February 1, 2017, http://www.sgip.org/sepa-sgip-announce-intent-merge/. 81 NAESB Board Executive Committee Meeting, Wholesale Electric Quadrant, Green Button & Open FMB Update, 

Dallas, Texas, Aug. 15, 2017, https://www.naesb.org/misc/greenbutton_update_072617.docx. 82 SGIP, and industry consortium focused on accelerating grid modernization, has since merged with the Smart 

Electric Power Alliance. See SGIP, SEPA and SGIP Announce Intent to Merge, Feb. 1, 2017, 

http://www.sgip.org/sepa-sgip-announce-intent-merge/. 83 Smart Grid Interoperability Panel, SGIP Gives Access to the OpenFMBTM Framework for Distributed Intelligence 

in the Grid, Nov. 7, 2016, http://www.sgip.org/sgip-gives-access-openfmbtm-framework-distributed-intelligencegrid/. 84 Aaron Smallwood, Guest Editorial: OpenFMBTM Brings a Standard and a New Tool Set to the Grid’s Edge, 

July/August 2016, http://www.electricenergyonline.com/show_article.php?mag=114&article=973#.
December 2017 Assessment of Demand Response and Advanced Metering

Page 16 Federal Energy Regulatory Commission

Chapter 3: Annual resource contribution of demand resources 

Using the latest publicly available data, this chapter summarizes the annual resource contribution

from retail and wholesale demand response programs on a national and regional basis.

85 

Retail demand response programs

Table 3-1 presents data collected by EIA on 2014 and 2015 potential peak demand savings86

from retail demand response programs within each of the eight NERC regional entities, as well 

as Alaska and Hawaii.87 Nationwide, total potential peak demand savings from retail demand 

response programs increased by 1,684 megawatts (MW), or 5.4 percent, between 2014 and 2015. 

Table 3-1: Potential Peak Demand Savings (MW) from Retail Demand Response Programs by 

Region (2014 & 2015)

Region

Annual Potential Peak 

Demand Savings (MW)

Year-on-Year Change

2014 2015 MW %

AK 27 27 0 0.0%

FRCC 3,389 3,247 -143 -4.2%

HI 41 35 -6 -13.9%

MRO 4,366 4,509 143 3.3%

NPCC 654 787 133 20.3%

RF 5,006 5,372 366 7.3%

SERC 8,343 9,259 916 11.0%

SPP RE 1,324 1,923 598 45.2%

Texas RE 613 696 83 13.6%

WECC 7,427 7,019 -407 -5.5%

Total 31,191 32,875 1,684 5.4%

Sources: EIA, EIA-861 Demand_Response_2014, Demand_Response_2015, Utility_Data_2014, 

and Utility_Data_2015 data files.

Note: Figures from source data are rounded to the nearest megawatt for publication. The 

percentage change is calculated based on the unrounded figures. Although some entities may 

operate in more than one NERC region, EIA data have only one NERC region designation per 

entity. Commission staff has not independently verified the accuracy of EIA data. 

Regionally, however, there were large differences in the change in potential peak demand 

savings from 2014 to 2015. For example, Table 3-1 above indicates potential peak demand 

savings increased in the SERC region by more than 900 MW compared to the previous year; this 

can be attributed to an increase in reported savings from programs operated by several utilities, 

 85 The latest publicly available retail and wholesale data sets are used to determine the annual resource contributions 

from demand response programs; these include EIA retail data for 2014 and 2015, as well as ISO/RTO wholesale 

data for 2015 and 2016. 

86 Potential peak demand savings refers to “the total demand savings that could occur at the time of the system peak 

hour assuming all demand response is called.” See EIA, Form EIA-861 Instructions, Schedule 6, Part B. 87 This section categorizes potential peak demand savings from retail demand response programs by NERC region 

because such programs exist in regions both with and without organized wholesale markets.
Assessment of Demand Response and Advanced Metering December 2017

Federal Energy Regulatory Commission Page 17

including Duke Energy Progress, Duke Energy Carolinas, Gulf Power, Alabama Power, and 

Woodruff Electric Cooperative. Increased demand response potential in the SPP RE region was 

largely due to greater reported savings from demand response programs of Kansas Gas & 

Electric, Oklahoma Gas & Electric, and Northfork Electric Cooperative. Demand response 

potential in ReliabilityFirst returned to the level seen in 2013, after falling in 2014. This was due 

to greater reported savings by PEPCO, Duke Energy Ohio, Appalachian Power, Indiana 

Michigan Power, and Duke Energy Kentucky. In contrast, net demand response potential fell 

sharply in WECC in 2015, due primarily to lower reported savings in Southern California 

Edison’s industrial demand response program, although this was partially offset by higher 

reported savings in programs run by Sulphur Springs Valley Electric Cooperative and PSCo 

(Xcel). 

As Table 3-2 illustrates, the amount of potential peak demand savings from retail demand 

response differs by customer class. In 2015, industrial customer demand response represented 

17,169 MW, or 52 percent, of total potential peak demand savings. Residential customer 

demand response accounted for 8,703 MW, or 26 percent, and programs in the commercial 

sector accounted for 6,989 MW, or 21 percent, of total potential peak demand savings. The 

relative contribution by customer class varies by region, and has remained fairly stable over time. 

For example, residential demand response programs account for the largest portion of potential 

peak demand savings in FRCC (approximately 49 percent) and MRO (approximately 44

percent). In contrast, commercial programs account for the majority of potential peak demand

savings in AK, HI, NPCC and Texas RE; and industrial programs account for the majority in 

ReliabilityFirst, SERC, SPP RE, and WECC.

Table 3-2: Potential Peak Demand Savings (MW) from Retail Demand Response Programs 

by Region and Customer Class (2015)

Region

Customer Class

Residential Commercial Industrial Transportation All Classes

AK 5 13 9 0 27

FRCC 1,575 1,333 338 0 3,247

HI 15 20 0 0 35

MRO 1,989 734 1,786 0 4,509

NPCC 120 354 300 14 787

RF 1,491 754 3,128 0 5,372

SERC 1,906 841 6,512 0 9,259

SPP RE 146 284 1,493 0 1,923

Texas RE 164 345 187 0 696

WECC 1,292 2,311 3,416 0 7,019

All Regions 8,703 6,989 17,169 14 32,875

Sources: EIA, EIA-861 Demand_Response_2015 and Utility_Data_2015 data files.

Note: Figures from source data are rounded to the nearest megawatt for publication. Although some entities may 

operate in more than one NERC Region, EIA data have only one NERC region designation per entity. Commission 

staff has not independently verified the accuracy of EIA data. 
December 2017 Assessment of Demand Response and Advanced Metering

Page 18 Federal Energy Regulatory Commission

Wholesale demand response programs

Table 3-3 below presents demand resource participation in wholesale demand response programs 

in 2015 and 2016 in the ISO/RTO regions. Across all ISO/RTO regions, demand resource 

participation fell in 2016 to 28,673 MW, a 10 percent decrease from the previous year, and a 

level roughly equal to participation in 2013 and 2014. In contrast, peak demand grew by three

percent from 2015 to 2016. As a result, the contribution of demand resources to meeting peak 

demand fell to 5.7 percent in 2016, down from 6.6 percent in 2015. Since 2009, demand 

resource participation in wholesale markets has increased by approximately six percent, but has 

been outpaced by an approximately 16 percent increase in peak demand.

This decrease in demand resource participation across the RTO/ISO regions was primarily due to 

an approximately 24 percent (3,030 MW) drop in demand resource enrollment in PJM 

Interconnection (PJM), which in turn was due to an almost 2,900 MW decrease in demand 

response capacity enrolled in PJM’s reliability program (Limited, Extended Summer and Annual 

DR), and a 900 MW decrease in economic program enrollments.

88 These changes were offset by 

approximately 600 MW of new enrollment of demand response in PJM’s Capacity Performance

product.89 

Demand resource participation also fell in CAISO, by eight percent or 163 MW, due to 

decreased enrollment in price-responsive demand programs administered by the three investorowned utilities.90 Participation in utility-sponsored programs has been gradually declining over 

the last several years, while participation in CAISO’s wholesale demand response products has 

been growing. In 2016, demand resource enrollment in CAISO’s two wholesale products totaled 

1,480 MW.91 

In addition, demand resource participation in ISO New England (ISO-NE) and New York 

Independent System Operator (NYISO) decreased by approximately four percent, compared to a 

year earlier. In contrast, net demand response participation rose in MISO in 2016, due to an 

increase in demand resource capacity registered as Emergency Demand Response and Type I 

Demand Response Resources. This was offset by a decrease in resources registered as other 

 88 Some resources participate in both the reliability and economic programs.

89 Based on comparison of data from PJM 2015 Demand Response Operations Markets Activity Report (May 2016), 

at 3-4; and PJM 2016 Demand Response Operations Markets Activity Report (May 2017), at 3-4.

90 Price-responsive demand programs in California are triggered on a day-ahead or day-of basis in response to 

market or system conditions that indicate relatively high prices. Specific programs include critical peak pricing, airconditioning cycling, and load reductions aggregated through curtailment service providers. Price-responsive 

demand programs administered by the investor-owned utilities include programs that are integrated into CAISO’s 

wholesale products (see infra note 88) and are therefore dispatched by CAISO, as well as programs triggered based 

on utility-specific indicators such as temperature forecasts. See CAISO, 2016 Annual Report on Market Issues and 

Performance (2017) at 32, 

http://www.caiso.com/Documents/2016AnnualReportonMarketIssuesandPerformance.pdf. 91 In 2016, the proxy demand response (PDR) capacity totaled 160 MW and reliability demand response resource 

(RDRR) capacity was 1,320MW. See CAISO, 2016 Annual Report on Market Issues and Performance (2017) at 

30-31, http://www.caiso.com/Documents/2016AnnualReportonMarketIssuesandPerformance.pdf.
Assessment of Demand Response and Advanced Metering December 2017

Federal Energy Regulatory Commission Page 19

types of demand response in Midcontinent Independent System Operator (MISO).

92 Demand 

resource participation also rose slightly in Electric Reliability Council of Texas (ERCOT).

Table 3-3: Demand Resource Participation in U.S. ISO and RTO Demand Response Programs

RTO/ISO

2015 2016

Demand 

Resources

(MW)

Percent 

of Peak 

Demand 8

Demand 

Resources

(MW)

Percent of 

Peak 

Demand 8

California ISO (CAISO) 2,160 1 4.4% 1,997 9 4.3%

Electric Reliability Council of Texas (ERCOT) 2,100 2 3.0% 2,253 10 2.9%

ISO New England (ISO-NE) 2,696 3 11.0% 2,599 11 10.2%

Midcontinent Independent System Operator (MISO) 10,563 4 8.8 % 10,721 12 8.9%

New York Independent System Operator (NYISO) 1,325 5 4.3% 1,267 13 3.9%

PJM Interconnection (PJM) 12,866 6 9.0% 9,836 14 6.5%

Southwest Power Pool (SPP) 0 7 0% 0 7 0%

Total ISO/RTO 31,710 6.6% 28,673 5.7%

Sources:

1 CAISO, 2015 Annual Report on Market Issues and Performance, Table 1.4, at 33 (May 2016). 2 ERCOT Quick Facts (Dec. 2015). 3 ISO-NE, ISO-NE Demand Resource Statistics, presented at Demand Resources Working Group Meeting (Jan. 20, 2016) (data 

as of Jan. 1, 2016), at 2. 4 2015 State of the Market Report for the MISO Electricity Market (June 2015), Table 5, at 76. 5 2015 Annual Report on Demand Side Management Programs of the New York Independent System Operator, Inc., ER01-3001 

(Jan. 12, 2016), Attachment I, Table 1, at 7. 6 PJM 2015 Demand Response Operations Markets Activity Report (May 2016), at 3-4. Figure represents “unique MW.” 

Based on PJM data, this figure has been updated since the publication of the 2016 staff report, which reported 12,910 MW. 7 No load-reduction demand response activity has occurred in the Integrated Marketplace since it was established on March 1, 

2014. See SPP Compliance Filing, Docket No. ER12-1179-024, at 4 (May 24, 2016). 8 Sources for peak demand data include: California ISO 2015 and 2016 Annual Reports on Market Issues and Performance; 

ERCOT 2015 & 2016 Demand and Energy Reports; ISO-NE Net Energy and Peak Load Report (May 2016 & May 2017); 2015

and 2016 State of the Market Reports for the MISO Electricity Markets; NYISO Power Trends Reports 2016 and 2017; 2015

and 2016 PJM State of the Markets Reports, Vol. 2; SPP Fast Facts (Feb. 2016) and 2016 Annual Report. 9 CAISO, 2016 Annual Report on Market Issues and Performance, Table 1.3, at 33 (May 2017). 10 ERCOT Quick Facts (May 2016). These are the latest data available. 11 ISO-NE, Demand Response Enrollment Statistics, presented at Demand Resources Working Group Meeting (Jan. 9, 2017) 

(data as of Jan. 1, 2017), at 2. 12 2016 State of the Market Report for the MISO Electricity Market (June 2016), Table 8, at 72. 13 2016 Annual Report on Demand Side Management Programs of the New York Independent System Operator, Inc., ER01-

3001 (Jan. 12, 2017), Attachment I, Table 1, at 7. 14 PJM 2016 Demand Response Operations Markets Activity Report (May 2017), at 3-4. Figure represents “unique MW.” 

Note: Commission staff has not independently verified the accuracy of the RTO, ISO and Independent Market Monitor reports. 

Values from source data are rounded for publication. 

 92 Potomac Economics, 2016 State of the Market Report for the MISO Electricity Markets (2017) at 72, 

https://www.misoenergy.org/Library/Repository/Report/IMM/2016%20State%20of%20the%20Market%20Report.p

df.
December 2017 Assessment of Demand Response and Advanced Metering

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2017 summer demand response deployments

High temperatures during the summer of 2017 led grid operators and utilities in several regions 

to issue notices for economic demand response, critical peak pricing, voluntary conservation, and

delayed maintenance. There was no reported dispatch of emergency demand response. 

On July 20-21, 2017, economic demand response in PJM responded to high load caused by high 

temperatures. The estimated hourly economic demand response reached levels of approximately 

140 MW and 850 MW on each day, respectively.93 No emergency resources were called on to 

respond during this period.

94

In response to high temperatures in California, CAISO issued state-wide Flex Alerts95 calling for 

voluntary electricity conservation on June 20 and 21, August 29 and 31, and September 1, 

2017.96 CAISO also issued several calls for restricted maintenance operations97 in June, July, 

and August.

98 Pacific Gas & Electric (PG&E) called fifteen critical peak pricing days, the 

maximum allowed, over the course of the summer, most recently during record high 

temperatures in the Bay Area at the beginning of September.99 Southern California Edison 

(SCE) also called critical peak pricing days throughout the summer, from mid-June to midSeptember.100 In addition, more than 41,000 residential customers in SCE’s territory gave 

permission for makers of smart thermostats to remotely adjust home temperatures during high 

expected peak demand at the end of August and in early September. Participation in this Save 

Power Day program increased from 5,000 customers in 2016.101

On August 25, 2017, ERCOT issued an Emergency Notice due to transmission outages caused 

by Hurricane Harvey. Transmission owners were advised to be prepared to lose load and to 

 93 PJM Estimated Demand Response Activity July 20-21, 2017, at 3-4, http://www.pjm.com/-/media/marketsops/demand-response/pjm-hot-days-report-for-july-20-21-2017.ashx?la=en. 94 Id. at 2.

95 Flex alerts are voluntary calls for consumers to conserve electricity or shift demand to off-peak hours during heat 

waves or unexpected system contingencies. See CAISO, Flex Alert, http://flexalert.org/what-is-flex-alert. See also

CAISO, Alerts, Warnings and Emergency Notice Archive, 

http://www.caiso.com/informed/Pages/Notifications/AWENoticeLog.aspx. 96 CAISO, California ISO issues statewide Flex Alert due to heat wave (Aug. 29, 2017), 

http://www.caiso.com/Documents/FlexAlert-CaliforniaISOIssuesStatewideFlexAlertDuetoHeatWave082917.pdf. 97 This type of notice requires transmission and generator operators to postpone planned routine maintenance 

outages until further notice. 98 CAISO, Alerts, Warnings and Emergency Notice Archive, 

http://www.caiso.com/informed/Pages/Notifications/AWENoticeLog.aspx. 99 PG&E’s Peak Day Pricing program is an “optional rate that offers businesses a discount on regular summer 

electricity rates in exchange for higher prices during nine to 15 Peak Pricing Event Days per year, typically 

occurring on the hottest days of the summer.” See PG&E, Review Peak Day Pricing Day Event History, 

https://www.pge.com/en_US/business/rate-plans/rate-plans/peak-day-pricing/event-day-history.page. 100 Southern California Edison, Event History, https://www.sce.openadr.com/dr.website/scepr-event-history.jsf. 101 Edison International, SCE Crew Stands Ready for Late-August Heat Wave (updated Aug. 29, 2017), 

http://insideedison.com/stories/sce-crews-stand-ready-for-late-august-heat-wave?utm_source=scehomepage; and 

89.3 KPCC, Thousands give up control of home thermostats during a heat wave (Aug. 28, 2017), 

https://www.scpr.org/news/2017/08/28/75111/thousands-give-up-control-of-home-thermostats-duri/.
Assessment of Demand Response and Advanced Metering December 2017

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expect high voltage conditions.

102 There were no calls for emergency demand response in 

ERCOT.

2017 solar eclipse

Leading up to the total solar eclipse on August 21, 2017, the EIA estimated that approximately 

22 GW of utility-scale solar photovoltaic capacity (about 1,900 plants) would be partially or 

completely obscured nationwide.103 A NERC study evaluating potential consequences of the 

eclipse did not predict any effect on reliable operation of the bulk power system.104 There were 

no reports of reliability issues due to the eclipse, and emergency demand response was not 

dispatched.105

In California, which hosts 40 percent of utility-scale solar PV capacity in the U.S., CAISO 

estimated that it would experience a loss of approximately 4.2 GW of utility-scale and 1.4 GW of 

rooftop solar capacity during the eclipse. 106 In actuality, utility-scale solar output fell by 3,400 

MW, less than expected.

107 In preparation for the eclipse, CAISO had procured approximately 

1,000 MW of regulation resources for each hour of the eclipse, much more than the typical 

hour’s 350 MW. As solar generation dropped off after the start of the event, hydropower and 

natural gas resources ramped up to compensate.108 CAISO also relied on imports from its 

Energy Imbalance Market.

109 Although CAISO had previously identified Flex Alerts110 as one 

of a number of potential measures to mitigate the effect of the eclipse,

111 neither a Flex Alert nor 

dispatchable demand response were called to meet system needs during the event. However, as 

part of its “Do Your Thing for the Sun” campaign leading up to the eclipse, the CPUC received

pledges from various organizations and technology providers to help end-users take at least one 

action during the event to reduce electricity usage, such as replacing light bulbs with LEDs or 

turning up the thermostat by several degrees.

112

 102 ERCOT, Public Notices, http://www.ercot.com/services/comm/mkt_notices/notices/2017/08. 103 EIA, Solar eclipse on August 21 will affect photovoltaic generators across the country (Aug. 7, 2017), 

https://www.eia.gov/todayinenergy/detail.php?id=32372. 104 NERC, A Wide-Area Perspective on the August 21, 2017 Total Solar Eclipse (Apr. 2017), at iv, 20, 

http://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/Solar_Eclipse_2017_Final_4-25-17.pdf. 105 Utility Dive, US grid untroubled by total eclipse despite plunge in solar output (Aug. 22, 2017), 

http://www.utilitydive.com/news/us-grid-untroubled-by-total-eclipse-despite-plunge-in-solar-output/503156/; ISO 

Newswire, New England power grid operations during August 21 partial eclipse (Aug. 22, 2017), 

http://isonewswire.com/updates/2017/8/22/new-england-power-grid-operations-during-august-21-partial-e.html; 

Megawatt Daily, Incident-free eclipse offers lessons for 2024 (Aug. 22, 2017). 106 CAISO, FAQ: Solar Eclipse, http://www.caiso.com/Documents/SolarEclipseFAQ.pdf. 107 Utility Dive, US grid untroubled by total eclipse despite plunge in solar output (Aug. 22, 2017), 

http://www.utilitydive.com/news/us-grid-untroubled-by-total-eclipse-despite-plunge-in-solar-output/503156/. 108 EnergyWire, Grid operators take a stunning event in stride (Aug. 22, 2017), 

https://www.eenews.net/stories/1060059019. 109 SNL, Eclipse effects on grid less than expected, US system operators say (Aug. 21, 2017), www.snl.com. 110 See supra note 93. 111 CAISO, 2017 Solar Eclipse Report (May 1, 2017), https://www.caiso.com/Documents/Briefing_SolarEclipseISOReport-May_2017.pdf. 112 Greentech Media, Looking Beyond the Eclipse: How the Historic Event Tested Customer Engagement on the 

Electric Grid (Aug. 21, 2017), https://www.greentechmedia.com/articles/read/looking-beyond-eclipse-historicevent-consumer-engagement; CPUC and CEC, Solar Eclipse, https://ia.cpuc.ca.gov/caleclipse/.
December 2017 Assessment of Demand Response and Advanced Metering

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In PJM, grid-scale solar generation fell by 520 MW during the eclipse, but the region maintained 

system reliability in part due to a net decrease in demand of 5,000 MW from lower cooling 

loads, increased cloud cover, and changes in behavior related to the eclipse.113 Like in 

California, some of these energy saving behaviors—turning off lights, unplugging appliances—

were the result of eclipse-themed marketing and promotional efforts.114

ISO-NE, which has approximately 2,000 MW of mostly distributed solar capacity in its footprint, 

did not experience any reliability issues as a result of the eclipse. Cloud cover before the eclipse, 

and lower-than-expected temperatures and changes in consumer behavior during the event, 

lessened the impact of the eclipse on solar generation.115 

MISO, whose footprint fell within the band of 80-100 percent solar obscuration, has a limited 

amount of solar capacity—180 MW of utility-scale and 350 MW of distributed solar. As a 

result, although generation from the utility-scale solar plants dropped almost to zero during the 

eclipse, MISO was not affected by the eclipse, and took no extraordinary measures to prepare for 

the event.116 Likewise, ERCOT and SPP currently have relatively little solar capacity—

approximately 700 MW and 325 MW, respectively—and did not experience any reliability 

issues related to the eclipse.117

 113 Utility Dive, US grid untroubled by total eclipse despite plunge in solar output (Aug. 22, 2017), 

http://www.utilitydive.com/news/us-grid-untroubled-by-total-eclipse-despite-plunge-in-solar-output/503156/. 114 Greentech Media, For US Grid Markets, an Eclipse Day is Like Any Other Day for Managing Solar Power (Aug.

23, 2017), https://www.greentechmedia.com/articles/read/for-u-s-grid-markets-an-eclipse-day-is-like-any-other-day. 115 ISO Newswire, New England power grid operations during August 21 partial eclipse (Aug. 22, 2017), 

http://isonewswire.com/updates/2017/8/22/new-england-power-grid-operations-during-august-21-partial-e.html. 116 Megawatt Daily, Incident-free eclipse offers lessons for 2024 (Aug. 22, 2017); see also RTO Insider, MISO 

Revisits Eclipse Ops, Prepares for 2024, https://www.rtoinsider.com/miso-caiso-solar-eclipse-48321. 117 Id.; and SPP, The August 21, 2017 Total Solar Eclipse: SPP Impact (2017), 

https://www.spp.org/documents/53556/analysis%20of%20august%20eclipse%20final_v2.0%20(002).pdf.
Assessment of Demand Response and Advanced Metering December 2017

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Chapter 4: Potential for demand response as a quantifiable, reliable 

resource for regional planning purposes

NERC oversees the reliability of the North American bulk power system, provides an 

independent assessment of bulk power system reliability, and measures system performance with 

established sets of reliability indicators (i.e., metrics).118 NERC notes that the bulk power 

system is integrating more demand response resources, as well as other distributed and 

renewable energy resources,

119 and states that it considers visibility of distributed resources by 

system operators crucial to system planning, forecasting, and modeling.120 NERC is working to 

improve the quality of the demand response data it collects to provide a better perspective on 

how demand response is being used to support planning and operations of a reliable bulk power 

system.

121 In addition to collecting and presenting reliability demand response data and results, 

NERC continues its efforts to integrate economic demand response within the DADS 

database.122 

Utilities and wholesale market operators that administer demand response programs are required 

to report demand response registration, event, and market participation information into the 

DADS database. NERC demand response program data is collected for summer (April 1 

through September 30) and winter (October 1 through March 31) seasons. Using available 

DADS data through September 2016, NERC reports that total registered summer capacity 

increased slightly since 2013 but remained relatively flat from 2015, and total registered winter 

capacity experienced a 12.7 percent increase from 2015, due largely to changes in program rules 

and implementation of new programs.123 NERC also advises, but for the summer of 2013, the 

realized demand reduction rate continues to be above 90 percent during both summer and winter 

periods, and that the variability at which demand response is deployed throughout the country is 

more of “a function of the demand response programs’ designs rather than an indication of 

extensive reliability issues within a region.”124

 118 NERC, State of Reliability 2017 (Jun. 2017) at vi, 

http://www.nerc.com/pa/RAPA/PA/Performance%20Analysis%20DL/SOR_2017_MASTER_20170613.pdf. 119 NERC, Distributed Energy Resources: Connection Modeling and Reliability Considerations, February 2017, 

http://www.nerc.com/comm/Other/essntlrlbltysrvcstskfrcDL/Distributed_Energy_Resources_Report.pdf. 120 NERC, State of Reliability 2017 (Jun. 2017) at 2-3, 

http://www.nerc.com/pa/RAPA/PA/Performance%20Analysis%20DL/SOR_2017_MASTER_20170613.pdf. 121 Id. at 24-25, 136. 122 NERC Demand Response Availability Data System Working Group (DADSWG), DADSWG Agenda, June 28, 

2017.

123 NERC, State of Reliability 2017 (Jun. 2017) at Appendix D, 

http://www.nerc.com/pa/RAPA/PA/Performance%20Analysis%20DL/SOR_2017_MASTER_20170613.pdf. 124 Id. at 25.
December 2017 Assessment of Demand Response and Advanced Metering

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Chapter 5: Existing demand response programs and time-based rate 

programs and steps taken to ensure that, in regional transmission 

planning and operations, demand resources are provided equitable 

treatment as a quantifiable, reliable resource relative to the resource 

obligations of any load-serving entity, transmission provider, or 

transmitting party

This chapter provides information on incentive-based and time-based rate demand response 

programs in 2014 and 2015, and summarizes recent federal, regional, state, and industry demand 

response actions. Tables 5-1 and 5-2 present customer enrollments in incentive-based125 and 

time-based126 demand response programs for 2014 and 2015. Enrollment in these types of 

programs remains close to its highest level.

As shown in Table 5-1, in 2015, the number of customers enrolled in incentive-based demand 

response programs nationwide decreased by two percent to approximately 9.1 million customers, 

slightly below a high in 2014 of 9.3 million customers. On a regional basis, customer enrollment 

increased by nearly 60 percent in NPCC from 2014 to 2015, reaching almost 81,000 customers, 

although this total is still relatively small compared to other regions. According to EIA data, this 

increase was primarily due to higher reported enrollment in programs run by Con Edison, Green 

Mountain Power, and New Hampshire Electric Cooperative. Enrollment in WECC rose by 12 

percent, or approximately 320,000 customers, due to higher reported enrollment in programs run 

by PG&E, City of Glendale, San Diego Gas & Electric (SDG&E), and PacifiCorp; these gains 

were offset by lower reported enrollment in SCE’s programs, among others. In contrast, 

enrollment fell by more than 20 percent, or more than 420,000 customers, in RelibilityFirst due 

to large reported decreases in enrollment in programs run by Delmarva Power, PEPCO, Duke 

Energy Indiana, and Delaware Electric Cooperative. Likewise, enrollment in FRCC fell by 15

percent, or approximately 220,000 customers, primarily due to lower reported enrollment in 

programs run by Withlacoochee River Electric Cooperative.

 125 Incentive-based demand response programs include direct load control, interruptible, demand bidding/buyback, 

emergency demand response, capacity market, and ancillary service market programs. See EIA, Form EIA-861 

Instructions, Schedule 6-Part C. 126 Time-based rate programs include real-time pricing, critical peak pricing, variable peak pricing, and time-of-use 

rates administered through a tariff. See EIA, Form EIA-861 Instructions, Schedule 6-Part C.
Assessment of Demand Response and Advanced Metering December 2017

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Table 5-1: Customer Enrollment in Incentive-based Demand Response Programs, by Region 

(2014 & 2015)

Region

Enrollment in 

Incentive-based Programs Year-on-Year Change

2014 2015 Customers %

AK 2,428 2,431 3 0%

FRCC 1,490,073 1,271,487 -218,586 -15%

HI 36,102 36,008 -94 0%

MRO 1,227,445 1,205,568 -21,877 -2%

NPCC 51,227 80,884 29,657 58%

RF 2,012,846 1,591,730 -421,116 -21%

SERC 1,303,339 1,410,799 107,460 8%

SPP RE 175,146 204,020 28,874 16%

Texas RE 302,913 307,089 4,176 1%

WECC 2,651,163 2,972,779 321,616 12%

Unspecified 12,947 11,343 -1,604 -12%

Total 9,265,629 9,094,138 -171,491 -2%

Sources: EIA, EIA-861 Demand_Response_2014, Utility_Data_2014, Demand_Response_2015, 

and Utility_Data_2015 data files. 

Note: Although some entities may operate in more than one NERC Region, EIA data have only 

one NERC region designation per entity. Commission staff has not independently verified the 

accuracy of EIA data. 

As Table 5-2 below indicates, nationwide enrollment in time-based programs increased 

approximately 10 percent in 2015, continuing a trend since 2012. The bulk of this increase 

occurred in the ReliabilityFirst region, with almost 370,000 new customer enrollments, and the 

WECC region, with approximately 266,000 new customer enrollments. EIA data indicate the 

increase in time-based program enrollments for the ReliabilityFirst region is due to a significant 

increase in enrollment in existing residential programs run by Delmarva Power, Baltimore Gas &

Electric, ComEd, and PEPCO. Taken together, the decrease in enrollment in Delmarva Power’s 

and PEPCO’s incentive-based programs, and the corresponding increase in these utilities’ timebased program enrollment, may in part reflect a shift from one program type to the other.

The increase in enrollment for the WECC region is primarily due to significant enrollment 

increases in existing residential and commercial programs run by PG&E, and residential 

programs run by Salt River Project and SDG&E. In addition, Marin Clean Energy, a community 

choice aggregator, reported new program enrollment. In MRO, increased enrollment in the 

region primarily reflects a significant increase in reported enrollment in residential and 

commercial programs run by Otter Tail Power. In contrast, in Texas RE reported enrollment 

decreased significantly, as a result of TriEagle Energy no longer reporting participation in a 

residential program it had administered in 2014. Entities without a specified NERC region also 
December 2017 Assessment of Demand Response and Advanced Metering

Page 26 Federal Energy Regulatory Commission

reported growth in time-based customer participation, primarily reflecting an increase in

residential time-based program enrollment for Family Energy, a New York power marketer.

127

Table 5-2: Customer Enrollment in Time-based Demand Response Programs, by Region 

(2014 & 2015)

Region

Enrollment in 

Time-based Programs Year-on-Year Change

2014 2015 Customers %

AK 53 53 0 0%

FRCC 20,069 21,444 1,375 7%

HI 466 538 72 15%

MRO 94,176 129,558 35,382 38%

NPCC 252,323 262,030 9,707 4%

RF 2,553,434 2,923,239 369,805 14%

SERC 203,954 198,627 -5,327 -3%

SPP RE 1,188,004 1,198,489 10,485 1%

Texas RE 49,481 1,867 -47,614 -96%

WECC 2,416,960 2,683,400 266,440 11%

Unspecified 115,906 169,815 53,909 47%

Total 6,894,826 7,589,060 694,234 10%

Sources: EIA, EIA-861 Dynamic_Pricing_2014 and Dynamic_Pricing_2015 data files.

Note: Although some entities may operate in more than one NERC Region, EIA data have only 

one NERC region designation per entity. Commission staff has not independently verified the 

accuracy of EIA data. 

FERC demand response orders and activities

Since the last staff report, the Commission issued several demand response-related orders. On 

October 17, 2016, the Commission approved PJM’s proposed modifications to the measurement 

and verification of load reductions that occurred during emergency conditions in its Emergency 

Load Response Program.128 These modifications included several changes to the use and 

application of customer baselines during these emergency periods. On February 3, 2017, the 

Commission granted a complaint filed by multiple parties (including the New York PSC) against

NYISO. The Commission found that application of NYISO’s buyer-side market power 

mitigation rules to demand response resources participating in NYISO’s Special Case Resources 

(SCR) capacity program was unjust, unreasonable, unduly discriminatory or preferential because 

those demand response resources had limited or no incentive and ability to exercise buyer-side 

market power to artificially suppress capacity market prices.

129 On February 2, 2017, the 

Commission approved proposed changes to MISO’s tariff to establish measurement and 

verification criteria for certain demand response resources called Load Modifying Resources for 

the purpose of determining whether these resources are meeting their performance obligations.130 

 127 Power marketers are not required to specify a NERC region when responding to the EIA-861 survey. See EIA, 

Form EIA-861, Schedule 2, Part A, http://www.eia.gov/electricity/data/eia861/. 128 PJM Interconnection, L.L.C., 157 FERC ¶ 61,067 (2016).

129 New York Independent System Operator, Inc., 158 FERC ¶ 61,137 (2017). 130 Midcontinent Independent System Operator, Inc., 158 FERC ¶ 61,119 (2017).
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As part of its acceptance, the Commission clarified that the proposal introduced no new 

measurement and verification criteria for resources that do not participate in MISO’s resource 

adequacy determination process.

In addition, under delegated authority, Commission staff approved ISO-NE’s proposal to remove 

from its tariff the two existing active demand response resource types (Real-Time Demand 

Response and Real-Time Emergency Generation), which had certain limitations on the services 

they were allowed to provide. All references to these two resource types will be removed from 

the tariff effective June 1, 2018, when demand response resources are proposed to be fully 

integrated into the ISO-NE markets.131

On April 11, 2016, the Commission issued identical data requests to each RTO/ISO, and a 

separate request for comments to the public, regarding the RTO/ISO market rules for electric 

storage resources.132 In response to the information received from these data requests, the 

Commission issued a Notice of Proposed Rulemaking on November 17, 2016, proposing to 

amend its regulations under the Federal Power Act (FPA) to remove barriers to the participation 

of electric storage resources and distributed energy resource aggregations in the capacity, energy, 

and ancillary service markets operated by RTOs and ISOs (organized wholesale electric 

markets). Specifically, the Commission proposed to require each RTO and ISO to revise its 

tariff to: (1) establish a participation model consisting of market rules that, recognizing the 

physical and operational characteristics of electric storage resources, accommodates their 

participation in the organized wholesale electric markets; and (2) allow distributed energy 

resource aggregators, including electric storage resources, to participate directly in the organized 

wholesale electric markets.133 Comments on the proposed rule were filed on February 13, 2017.

Other federal demand response activities

U.S. Department of Defense

In fiscal year 2016, the Department of Defense (DOD) used approximately 30 million MWh of 

electricity to operate its facilities, over 50 percent of the federal government’s total.134 The 

DOD’s Defense Logistics Agency Energy’s (DLA Energy) primary mission is to provide the 

DOD and other agencies with comprehensive energy solutions,135 including administering 

incentive-based demand response programs. In fiscal year 2016, DLA Energy operated 68 

demand response installations across all four branches of the military, the DOD, and other 

 131 ISO New England Inc. and New England Power Pool Participants Committee, Docket Nos. ER17-925-00 & 

ER17-925-001, at 1-2 (Mar. 15, 2017) (delegated letter order). 132 Electric Storage Participation in Regions with Organized Wholesale Electric Markets, Docket No. AD16-20-000 

(Apr. 11, 2016).

133 Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent 

System Operators, 157 FERC ¶ 61,121 (2016). 134 U.S. DOE, Comprehensive Annual Energy Data and Sustainability Performance: Site-Delivered Energy Use by 

End-Use Sector and Energy Type in FY 2016 (Billion Btu), 

http://ctsedwweb.ee.doe.gov/Annual/Report/SiteDeliveredEnergyUseAndCostBySectorAndTypeAndFiscalYear.asp

x.

135 U.S. DOD, Defense Logistics Agency, Fiscal Year 2016 Fact Book, at 2,

http://www.dla.mil/Portals/104/Documents/Energy/Publications/E_Fiscal2016FactBookWebResolution_170706.pdf

.
December 2017 Assessment of Demand Response and Advanced Metering

Page 28 Federal Energy Regulatory Commission

federal civilian agencies in 16 states and the District of Columbia.136 In that fiscal year, the 

202.3 MW that DLA Energy enrolled in demand response programs netted $5.9 million in 

savings, while the demand response programs have accrued $34.2 million in savings since their 

inception in 2008.

137

Individual initiatives within the DOD are also underway, namely at the Fort Hood Army base 

in Killeen, Texas, which hosts a vehicle-to-grid program with 14 electric vehicle charging 

stations that provides demand response, peak shaving and ancillary services in ERCOT’s 

wholesale market.138

The development of renewable energy systems and potential for microgrids on military 

installations has created an incentive for the DOD’s Environmental Security Technology 

Certification Program (ESTC Program) to develop programs for distributed resources to 

participate in energy markets through demand response and other means.

139 In February 2017, 

the ESTC Program issued a request for proposals140 and held a webinar in April 2017 to develop 

solutions for the DOD’s energy programs.141 In addition, the ESTC Program is funding a project 

that is developing a method for direct, automated participation by DOD installations in demand 

response programs.

142 As part of this project, Camp Pendleton participated in Southern 

California’s Capacity Bidding Program in 2017 and anticipates $67,000 in annual savings from 1 

MW in reductions.

143

U.S. General Services Administration

The U.S. General Services Administration (GSA) provides the Federal government with 

workplaces by constructing, managing, and preserving government buildings and by leasing and 

managing commercial real estate. GSA continued to enable the participation of facilities it 

 136 Id. at 54. 137 Id. 138 U.S. DOD, Strategic Sustainability Performance Plan Fiscal Year 2016, at 62, 

http://www.denix.osd.mil/sustainability/dod-sspp/unassigned/department-of-defense-strategic-sustainabilityperformance-plan-fy-2016/. 139 U.S. DOD, Strategic Environmental Research and Development Program (SERDP) Environmental Security 

Technology Certification Program (ESTCP), Internet of Things (IoT): Opportunities and Challenges for 

Implementation on DoD Installations, https://www.serdp-estcp.org/News-and-Events/Blog/Internet-of-Things-IoTOpportunities-and-Challenges-for-Implementation-on-DoD-Installations. 140 U.S. DOD, Strategic Environmental Research and Development Program (SERDP) Environmental Security 

Technology Certification Program (ESTCP), Installation Energy Solicitation, https://www.serdp-estcp.org/FundingOpportunities/ESTCP-Solicitations/Installation-Energy-Solicitation. 141 U.S. DOD, Strategic Environmental Research and Development Program (SERDP) Environmental Security 

Technology Certification Program (ESTCP), SERDP & ESTCP Webinar Series: Strategic Environmental Research 

and Development Program (SERDP) Environmental Security Technology Certification Program (ESTCP), 

https://www.serdp-estcp.org/Tools-and-Training/Webinar-Series/04-20-2017. 142 U.S. DOD, Strategic Environmental Research and Development Program (SERDP) Environmental Security 

Technology Certification Program (ESTCP), Demonstrating Secure Demand Response in DoD, https://www.serdpestcp.org/News-and-Events/Blog/Demonstrating-Secure-Demand-Response-in-DoD. 143 U.S. DOD, Strategic Environmental Research and Development Program (SERDP) Environmental Security 

Technology Certification Program (ESTCP), SERDP & ESTCP Webinar Series: Solutions for Installations’ 

Participation in Energy Markets (Apr. 20, 2017) at 55, https://www.serdp-estcp.org/Tools-and-Training/WebinarSeries/04-20-2017/Webinar-Slides-04-20-17. 
Assessment of Demand Response and Advanced Metering December 2017

Federal Energy Regulatory Commission Page 29

manages in various demand response programs in 2016 and 2017. In April 2017, GSA 

announced that its Northeast and Caribbean Region demand response programs garnered 

$479,630 in annual rebates by participating in NYISO and PJM demand response programs.

144

Since 2011, the Northeast and Caribbean region’s net earnings through its 17 federally-owned 

buildings participating in demand response programs has totaled $1.96 million.145 The combined 

savings from existing demand response programs fund infrastructure updates, energy saving 

performance contracts, and new projects that generate revenue through participation in demand 

response.146

Developments and issues in demand response

State legislative and regulatory activities related to demand response

This section highlights developments in retail demand response and time-based pricing activities.

In the past year, there has been movement towards further deployment of time-of-use rates, with 

continued progress in California and Colorado toward making time-of-use rates the default for 

residential customers. In addition, several states have conducted, or propose to conduct, studies 

to assess the potential for demand response to meet resource needs. 

• Arizona. On September 1, 2017, Arizona Public Service Company (APS) filed an 

application with the Arizona Corporation Commission for approval of its 2018 Demand 

Side Management Plan. In its plan, APS proposes a number of measures, including a 

“reverse” (load increasing) demand response pilot, meant to reduce peak demand and 

shift load to mid-day in the non-summer months to allow better integration of solar on the 

grid. The reverse demand response pilot, which APS proposes to implement in 2018, 

would allow the utility to call on non-residential facilities to increase electricity demand 

during periods of negative prices due to over-generation. The pilot is intended to provide 

load flexibility and reduce the need to curtail solar generation. To be eligible, facilities

must have a minimum demand of 30 kW. APS would provide participating facilities 

with the necessary sub-metering and telecommunications infrastructure, but would not 

provide an incentive payment. Instead, program participants would be allowed to use 

electricity at no cost during event periods. APS proposes to cap the budget at $200,000 

in 2018.147

• California. In 2013, the CPUC established a rulemaking to enhance the role of demand 

response in meeting the state’s resource planning needs and operational requirements.148 

 144 U.S. General Services Administration, GSA Striking it Green for Taxpayers (Aug. 2017),

https://www.gsa.gov/portal/content/161982. 145 Id. 146 Id. 147 In The Matter Of The Application Of Arizona Public Service Company For A Ruling Relating To Its 2018 

Demand Side Management Implementation Plan, Docket No. E-01345A-17-0134 (Arizona Corporation 

Commission Sep. 1, 2017) Exhibit A at 19-20, http://docket.images.azcc.gov/0000182484.pdf. 148 Order Instituting Rulemaking To Enhance The Role Of Demand Response In Meeting The State’s Resource 

Planning Needs And Operational Requirements, Docket No. R.13-09-011 (CPUC Sep. 25, 2013); Joint Assigned 

Commissioner And Administrative Law Judge Ruling And Scoping Memo, Docket No. R.13-09-011 (CPUC Nov. 14, 

2013).
December 2017 Assessment of Demand Response and Advanced Metering

Page 30 Federal Energy Regulatory Commission

In Decision 14-12-024, the CPUC provided guidance to the state’s three investor-owned 

utilities (IOUs) concerning their demand response portfolios for 2018 and beyond, 

defining a set of principles for all demand response programs going forward.149 In 

compliance with this order, in January 2017, SDG&E,

150 PG&E,151 and SCE152 submitted 

their 2018-2022 demand response proposals to the CPUC for approval. 

The CPUC had previously required the IOUs to establish Demand Response Auction 

Mechanism (DRAM) pilots to test the viability of using a competitive mechanism to 

procure aggregated demand response resources to provide local, system and flexible 

capacity. Originally a two-year pilot, the DRAM was extended to a third phase.153 

Approximately 40 MW of demand response was procured in the first DRAM auction for 

2016 delivery, and approximately 82 MW for 2017 delivery.154 The CPUC Energy 

Division approved contracts resulting from the third auction, through which the three 

IOUs procured approximately 182 MW of demand response for August 2018 delivery 

and 189 MW for August 2019 delivery. Approximately a quarter of this is aggregated 

residential demand response.155 On October 26, 2017, the CPUC issued a decision 

 149 Among other things, the CPUC established that demand response should be flexible and reliable to support 

renewable integration and emissions reductions, should evolve to meet changing grid needs, should be procured 

from third parties in open markets, and should be dispatched pursuant to wholesale or distribution market 

instructions, superseded only for emergency conditions. See Order Instituting Rulemaking to Enhance the Role of 

Demand Response in Meeting the State’s Resource Planning Needs and Operational Requirements, Docket No. 

R.13-09-011 (CPUC Sep. 19, 2013) at 46, 

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M167/K725/167725665.PDF. 150 Application of San Diego Gas & Electric Company (U-902-E) Requesting Approval and Funding for 2018-2022 

Demand Response Portfolio in compliance with Decision 16-09-056, Application No. A.17-01 (CPUC Jan. 17, 

2017),

https://www.sdge.com/sites/default/files/regulatory/Application_of_SDGE_2018-

2022_Demand_Response_with_attachments_COS.pdf. 151 Application of Pacific Gas and Electric Company (U 39-E) for Approval of Demand Response Programs, Pilots 

and Budgets for Program Years 2018-2022, Application No. 17-01 (CPUC Jan. 17, 2017),

http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M172/K519/172519506.PDF. 152 Application of Southern California Edison Company (U 338-E) for Approval of its 2018 – 2022 Demand 

Response Programs, Application No. 17-01 (CPUC Jan. 17, 2017), 

http://www3.sce.com/sscc/law/dis/dbattach5e.nsf/0/76E43EB7170CC097882580AC000C9B49/$FILE/A1701XXXSCE%202018-2022%20DR%20Application.pdf. 153 Order Instituting Rulemaking to Enhance the Role of Demand Response in Meeting the State's Resource 

Planning Needs and Operational Requirements, Docket No. R.13-09-011 (CPUC Jun. 9, 2016), 

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M163/K467/163467479.PDF; Resolution E-4817, Approval 

with Modifications to Southern California Edison Company, Pacific Gas and Electric Company, and San Diego Gas 

& Electric Company’s Demand Response Auction Mechanism Pilot for 2018-2019, (CPUC Jan. 19, 2017), 

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M172/K765/172765001.PDF. 154 Greentech Media, California’s DRAM Auction Contracts for 82MW of Distributed Energy as Grid Resource

(Aug. 3, 2016), https://www.greentechmedia.com/articles/read/californias-dram-auction-contracts-for-82mw-ofdistributed-energy-as-grid-r. 155 Staff Disposition of: PG&E AL 5109-E- PG&E’s 2018-2019 Demand Response Auction Purchase Agreements, 

Advice Letter 5109-E (CPUC Energy Division Jun. 30, 2017), at 1, 10, 

https://www.pge.com/tariffs/assets/pdf/adviceletter/ELEC_5109-E.pdf; Staff Disposition of: SDG&E AL 3095-ESDG&E’s 2018-2019 Demand Response Auction (DRAM) Results, Advice Letter 3095-E (CPUC Energy Division 

Jun. 30, 2017), http://regarchive.sdge.com/tm2/pdf/3095-E.pdf; Staff Disposition of: SCE AL 3629-E – SCE’s 2018-
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Federal Energy Regulatory Commission Page 31

requiring an additional DRAM pilot auction to be held in the spring of 2018 for contracts 

for delivery in 2019.156 To assess whether to make the DRAM permanent and the 

primary means of sourcing demand response in the state, the CPUC authorized its Energy 

Division staff to conduct an independent analysis of the results from the DRAM auctions,

to be released no later than June 2018.157

Additionally, the CPUC approved PG&E’s,158 SCE’s,159 and SDG&E’s160 proposed 

residential time-of-use pilot programs, which were required under CPUC Decision 15-07-

001. The proposed default time-of-use rates will begin in March 2018 and will have a 

peak period from 4 p.m. to 9 p.m., later in the day than has been the case historically.161

On March 1, 2017, Lawrence Berkeley National Laboratory (LBNL) released its final 

report on Phase II of its 2025 California Demand Response Potential Study, which was 

commissioned by the CPUC. It is the first study to evaluate the technical potential, 

hourly availability, and value relative to other resources, of demand response resources 

for the state’s IOUs.162 Based on customer load profiles developed from smart meter 

data in Phase I of the study, Phase II models the potential size and cost of the state’s 

demand response resources in the future, presents a simplified taxonomy of demand 

response service types,

163 and considers non-traditional technologies.164 A key finding is 

 2019 Demand Response Auction (DRAM) Purchase Agreements, Advice Letter 3629-E (CPUC Energy Division Jul.

7, 2017), https://www.sce.com/NR/sc3/tm2/pdf/3629-E.pdf. 156 Order Instituting Rulemaking to Enhance the Role of Demand Response in Meeting the State’s Resource 

Planning Needs and Operational Requirements, Docket No. R.13-09-011 (CPUC Oct. 26, 2017), 

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M167/K725/167725665.PDF. 157 Order Instituting Rulemaking to Enhance the Role of Demand Response in Meeting the State’s Resource 

Planning Needs and Operational Requirements, Docket No. R.13-09-011 (CPUC Sep. 29, 2016) at 66-67, 

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M167/K725/167725665.PDF. 158 Resolution E-4846: Adoption of Pacific Gas and Electric Company’s residential default time-of-use pricing pilot 

pursuant to Decision 15-07-001 (CPUC Aug. 10, 2017), 

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M191/K530/191530523.PDF. 159 Resolution E-4847: Adoption of Southern California Edison’s (SCE’s) Residential Default Time-of-Use (TOU) 

Pilot with modifications (CPUC May 11, 2017), 

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M186/K711/186711908.PDF. 160 Resolution E-4848: Adoption of San Diego Gas & Electric Company’s residential default time-of-use pricing 

pilot pursuant to Decision 15-07-001 (CPUC May 25, 2017), 

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M188/K449/188449503.PDF. 161 Order Instituting Rulemaking to Assess Peak Electricity Usage Patterns and Consider Appropriate Time Periods 

for Future Time-of-Use Rates and Energy Resource Contract Payments, Docket No. R.15-12-012 (CPUC Nov. 1, 

2016), http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M169/K117/169117846.PDF. 162 Alstone, et al. (Lawrence Berkeley National Laboratory), Final Report on Phase 2 Results: 2025 California 

Demand Response Potential Study: Charting California’s Demand Response Future (Mar. 1, 2017) at 2-9, 

http://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=6442452698. 163 Service types include “Shape” (long-term changes to demand through time-varying pricing and behavior change), 

“Shift” (shifting load to non-peak times to reduce over-generation and net load ramps), “Shed” (temporarily 

curtailing load to provide peak capacity during system emergencies), and “Shimmy” (dynamically adjusting demand 

to provide load following and regulation service). See id. at 3-13 and 3-14. 164 In addition to the technologies traditionally used to provide demand response (industrial processes, commercial 

lighting, pool pumps, refrigerated warehouses, agricultural pumping, and wastewater processes), the study also 

considers behind-the-meter storage, electric vehicles, and data centers as potential sources of demand response.
December 2017 Assessment of Demand Response and Advanced Metering

Page 32 Federal Energy Regulatory Commission

that the role for traditional demand response resources (i.e., peak shaving) is declining in 

California, while the need for fast-responding, flexible loads that can provide timedifferentiated and location-differentiated services, is growing.

165

• Colorado. On November 9, 2016, the Colorado PUC approved a settlement agreement 

filed by Public Service Company of Colorado (PSCo) that resolved, among other things,

its 2016 Electric Phase II rate proceeding. In this proceeding, PSCo proposed a new rate 

schedule incorporating, among other things, pilots of two optional time-of-use rates for 

residential customers and a critical peak pricing rate for commercial and industrial 

customers, starting in 2017. One of the residential rate options has three components: a 

monthly demand charge, a time-of-use component, and a charge for services and 

facilities. PSCo will use this rate to assess the effect of a demand charge on customer 

behavior and energy choices. The second residential time-of-use rate option includes 

replacing enrolled customers’ meters with advanced meters to track their energy usage on 

a time-differentiated basis. PSCo must file an advice letter with the Colorado PUC no 

later than December 2, 2019 establishing this rate as permanent and mandatory for all 

residential customers, modifying the rate as necessary based on PSCo’s analysis of the 

pilot results.

166 On March 15, 2017, the Colorado PUC opened a new proceeding to 

serve as a repository for information related to the new pilot rate options.

167 

• Hawaii. The Hawaii PUC approved the HECO Companies’ Power Supply Improvement 

Plan Update on July 17, 2017. The plan forecasts close to 115 MW of demand response 

resources being available by 2021, as part of HECO Companies’ path to meeting the 

state’s 100 percent Renewable Portfolio Standard by 2045. HECO Companies’ proposed 

demand response portfolio includes nine demand response programs providing multiple 

grid services.168 HECO Companies also predict that electrification of transportation

could create new opportunities for demand response to offset utility investments in 

storage or generation that would otherwise be needed.

169 

 165 Alstone, et al. (Lawrence Berkeley National Laboratory), Final Report on Phase 2 Results: 2025 California 

Demand Response Potential Study: Charting California’s Demand Response Future (Mar. 1, 2017), at 1-11, 2-4, 6-

3, http://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=6442452698. 166 In The Matter Of Advice Letter No. 1712 Filed By Public Service Company Of Colorado To Revise Electric Base 

Rates And Changes To Tariff Sheets And Replace PUC No. 7 With PUC No. 8 To Become Effective February 25, 

2016, et al., Proceeding Nos. 16AL-0048E, 16A-0055E, and 16A-0139E (Colorado PUC Nov. 9, 2016), 

http://www.dora.state.co.us/pls/efi/EFI_Search_UI.Show_Decision?p_session_id=&p_dec=23626. 167 In The Matter Of The Commission's Review Of The Residential Time-Of-Use Trial And Demand Rate Pilot 

Implemented By Public Service Company Of Colorado, Proceeding No. 17M-0204E (Colorado PUC Mar. 15, 2017), 

http://www.dora.state.co.us/pls/efi/efi_p2_v2_demo.show_document?p_dms_document_id=861299. 168 These include real-time pricing, and time-of-use, day-ahead load shift, minimum load, PV curtailment, and 

critical peak incentive programs to provide capacity; a fast frequency response program; a regulating reserve 

program to provide regulation up; and non-spin auto response program to provide 10-minute supplemental reserves. 

See For Approval of Demand Response Program Portfolio Tariff Structure, reporting Schedule, and Cost Recovery 

of Program Costs through the Demand-Side Management Surcharge, Docket No. 2015-0412 (Hawaii PUC Dec. 30, 

2015). 

169 Hawaiian Electric Companies Power Supply Improvement Plan Update Report -- Book 1, Dec. 23, 2016, at ES-7, 

https://www.hawaiianelectric.com/Documents/about_us/our_vision/psip_executive_summary_20161223.pdf.
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Delays in HECO Companies’ demand response implementation timeline have led to 

postponement of the planned rollout of its Demand Response Management System 

(DRMS) software until Hawaii PUC approves the timeline. This timeline had established 

milestones for HECO Companies’ integration of its demand response portfolio with an 

original deadline for DRMS integration of December 1, 2017.170

Additionally, Maui Electric Company received approval to expand their Fast Demand 

Response Program to 5.0 MW. The termination of Hawaiian Commercial and Sugar’s 

power purchase agreement, which supplied six percent of Maui’s annual electricity, 

created a need for these additional resources. The Fast Demand Response Program 

utilizes a peak time rebate with event notices indicating requested reductions, and 

requires 10-minute response times.171

• Massachusetts/Rhode Island. National Grid has partnered with curtailment service 

providers CPower, EnerNOC, and IPKeys to offer its first demand response program to 

commercial customers in Massachusetts and Rhode Island. Customers who enroll in the 

program are paid $20 per kW and $0.75 per kWh reduced during events. Electric storage 

resources are eligible to participate.172

• Michigan. In December 2016, Michigan’s governor signed Public Acts 341 and 342, 

which require, among other things, a statewide demand response potential study, as well 

as the promotion of load management programs as part of a new integrated resource 

planning process and energy waste reduction efforts.173 Partially in response to this new 

legislation, in May 2017, the Michigan Public Service Commission (Michigan PSC) 

directed its staff to convene a workgroup tasked with proposing a framework for the 

evaluation and cost recovery of demand response investments, which the Michigan PSC

previously had found were not well served by traditional rate setting processes.174 On 

August 24, 2017, Michigan PSC staff issued a set of options regarding planning and cost 

recovery of demand response programs for the Michigan PSC to consider. Of these 

options, Michigan PSC staff recommended a “three phase plan” in which demand 

response resources would be evaluated alongside traditional supply resources in 

integrated resource planning proceedings and cost recovery for these programs would be 

determined in general rate cases, with an annual reconciliation mechanism to align the 

two processes.175 The demand response potential study, completed at the end of 

 170 Status Update to the Demand Response Portfolio Implementation Update, Docket Nos. 2015-0411 and 2015-

0412 (Hawaii PUC Jul. 12, 2017).

171 For Approval of Expansion of Fast Demand Response Pilot Program and Recovery of Program Costs, Docket 

No. 2016-0232 (Hawaii PUC Jul. 17, 2017). 172 National Grid, Participate in Demand Response, save energy, and receive incentives!,

https://www.nationalgridus.com/media/pdfs/bus-ways-to-save/connectedsolution-ma-ci-dr-info-flier.pdf. 173 Michigan PSC, Energy Law Updates, http://www.michigan.gov/mpsc/0,4639,7-159-80741---,00.html. 174 In the matter, on the Commission’s own motion, initiating a process to address demand response issues for 

regulated electric utilities, Case No. U-18369 (Michigan PSC May 11, 2017), 

http://efile.mpsc.state.mi.us/efile/docs/18369/0001.pdf. 175 In the matter, on the Commission's own motion, initiating a process to address demand response issues for 

regulated electric utilities, Staff Demand Response Regulatory Framework Recommendations, Case No. U-18369 

(Michigan PSC Staff Aug. 24, 2017), http://efile.mpsc.state.mi.us/efile/docs/18369/0011.pdf.
December 2017 Assessment of Demand Response and Advanced Metering

Page 34 Federal Energy Regulatory Commission

September 2017, estimated a realistic achievable potential of 265-849 MW annually in 

2018, rising to 1.3-2.2 GW annually by 2037. More than half of this potential is 

estimated to come from residential customers participating in dynamic pricing 

programs.

176

• New Mexico. On February 22, 2017, the New Mexico PRC approved El Paso Electric 

Company’s application to implement a demand response pilot program. The three-year

pilot will run in the summer months only, and is limited to 3,000 residential and small 

commercial customers with central air conditioning and an eligible smart thermostat

provided and installed by the customer. Participants will receive a $125 enrollment 

incentive and a $25 annual participation incentive to allow El Paso Electric to remotely 

control their thermostat during periods of peak demand.

177 

• New York. On March 9, 2017, as part of New York’s Reforming the Energy Vision 

initiative, the New York PSC released an Order on Net Energy Metering Transition, 

Phase One of Value of Distributed Energy Resources, and Related Matters.178 According 

to the New York PSC, this order is part of the effort to coordinate a transition from net 

energy metering to valuing customer, electric system, and societal benefits, and 

increasing the granularity of value assessment. New values are defined by four 

categories: energy value, capacity value, environmental value, and demand reduction 

value. While Phase I of the program does not include demand response due to 

preexisting tariffs, the New York PSC indicates that this “value stack” compensation will 

be expanded in Phase II to include all distributed energy resources, including demand 

response as defined within the order, as soon as possible.179 An organizational 

conference was held on May 23, 2017 to address the scope of the proposed expanded 

tariff, and a deadline of the end of 2018 has been established for its publication.180

• Texas. Pursuant to HB 4097, enacted in 2015, ERCOT released a study at the end of 

2016 investigating the potential for desalination projects to participate as demand 

response resources in the ERCOT market. The report notes that seawater desalination is 

an energy-intensive process that removes salt and other minerals from seawater to 

produce freshwater for municipal consumption, and that participation in demand response 

could help mitigate electricity costs for future desalination projects in the state while 

 176 Applied Energy Group State of Michigan Demand Response Potential Study (Sep. 2017), at v-vi, 46-48, prepared 

for the State of Michigan, http://www.michigan.gov/documents/mpsc/State_of_Michigan_-

_Demand_Response_Potential_Report_-_Final_29sep2017__602435_7.pdf. 177 New Mexico PRC, Commission Grants EPE’s Application for Demand Response Pilot Program (Feb. 23, 2017), 

http://www.nmnn.net/press/PRC022317.pdf. 178 In the Matter of the Value of Distributed Energy Resources, et al., Case Nos. 15-E-0751 and 15-E-0082, (New 

York PSC Mar. 9, 2017),

http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={FD2886CF-87D6-4F02-A252-

95F9094A2CED}. 179 Id. at 44. 180 In the Matter of the Value of Distributed Energy Resources, et al., Case Nos. 15-E-0751 and 15-E-0082 (New 

York PSC Mar. 9, 2017), at 136,

http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={FD2886CF-87D6-4F02-A252-

95F9094A2CED}.
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providing reliability benefits to the grid. The study looked at the two main demand 

response reliability-based services in ERCOT,181 finding that desalination plants can 

meet the qualification requirements for either service, depending on plant design (which 

determines response time, recovery time, demand predictability, and operational 

flexibility). As such, ERCOT’s study recommends that desalination project developers 

consider whether they will participate in demand response early in the project planning 

stages.182

In addition, on March 21, 2017, El Paso Electric filed an application for approval of a 

demand response pilot for residential and commercial customers similar to the pilot 

earlier approved in New Mexico (discussed above).183

• Utah. On June 28, 2017, the Utah Public Service Commission (Utah PSC) approved 

PacifiCorp’s proposed Electric Vehicle Time-of-Use pilot program and an associated 

study of customer response to time-varying prices under the proposed rates. PacifiCorp 

proposed two time-of-use rate options with different spreads between on-peak and offpeak prices (3:1 and 10:1). The Utah PSC approved both rate options proposed by 

PacifiCorp, but did not approve an alternative proposed by other parties that would have 

included both time-of-use and inclining tiers.184 The pilot program is part of the 

implementation of PacifiCorp’s Sustainable Transportation and Energy Plan, which was 

authorized under a law adopted in 2016 allowing funding for electric vehicle 

infrastructure, battery storage, clean coal, and other programs.185

• Virginia. On June 1, 2017, the Virginia State Corporation Commission approved 

Dominion Energy Virginia’s petition to allow the small number of customers 

participating in an existing dynamic pricing pilot to remain on these rates after the 

planned conclusion of the pilot on July 31, 2017.186

 181 The two services are Responsive Reserve Service in the ancillary service market and Emergency Response 

Service.

182 ERCOT, Demand Response Potential for Seawater Desalination Projects (Nov. 18, 2016),

http://www.puc.texas.gov/industry/electric/reports/scope/2017/2017scope_elec.pdf. 183 El Paso Electric Company’s Amendment to 2016 Energy Efficiency Plan for Pilot Program, Docket No. 46967 

(PUCT Mar. 21, 2017), http://interchange.puc.state.tx.us/WebApp/Interchange/Documents/46967_1_933336.PDF. 184 In the Matter of the Application of Rocky Mountain Power to Implement Programs Authorized by the Sustainable 

Transportation and Energy Plan Act, Docket No. 16-035-36 (Utah PSC Jun. 28, 2017), 

https://pscdocs.utah.gov/electric/16docs/1603536/2949541603536ptrao6-28-2017.pdf. 185 State of Utah, Sustainable Transportation and Energy Plan Act, 

https://le.utah.gov/~2016/bills/sbillenr/SB0115.htm. 186 In Re: Virginia Electric and Power Company's proposed pilot program on dynamic rates, Case No. PUE-2010-

00135 (Virginia SCC Jun. 1, 2017), http://www.scc.virginia.gov/docketsearch/DOCS/3f%23901!.PDF.
December 2017 Assessment of Demand Response and Advanced Metering

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Collaborative industry-government efforts

In 2017, NAESB ratified two recommendations related to demand-side management and energy 

efficiency that created new retail demand response business standards.187 On April 17, 2017, 

NAESB members approved Book 27 – Enrollment, Drop and Account Information Change for 

Demand Response Programs in a Registration Agent Marketplace, which focuses on the 

processes for a demand response service provider to enroll or drop a retail customer from their 

demand response program.188 On July 9, 2017, NAESB members approved Book 28 – SelfDeployment of a Demand Response Program by a Demand Response Service Provider in a 

Registration Agent Model, which deals with a broad variety of interactions among retail 

customers, distribution companies, demand response service providers, and registration 

agents.189 

 187 NAESB, NAESB Bulletin: March – July 2017, Vol. 10, Issue, 1, at 3, 

https://naesb.org//pdf4/naesb_bulletin_vol10_issue1.pdf. 188 NAESB, Quadrant Executive Committee Meeting Announcements & Agendas- Highlighted with Additional 

Materials and Agenda Updates, https://www.naesb.org/pdf4/ec022117a.docx. 189 NAESB, NAESB Bulletin: March – July 2017, Vol. 10, Issue 1, at 3.
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Chapter 6: Regulatory barriers to improved customer participation in 

demand response, peak reduction, and critical period pricing 

programs

The 2009 National Assessment of Demand Response Potential,

190 and previous annual staff 

reports, describe the barriers to customer participation in demand response. Outstanding barriers 

and recent actions taken to address them are presented below.

• Implementing Time-based Pricing. As noted above, enrollment in time-based demand 

response programs increased significantly in 2015 (the latest year with complete data), 

continuing a trend since 2012. More recently, according to the Brattle Group, a 

consulting firm, utilities and regulatory bodies around the globe are experimenting with 

an increasing number of pricing options as they contemplate retail rate reform brought on 

by changes in the electricity industry. Pricing options being considered and tested

include time-based rates (time-of-use rates and various types of dynamic pricing), and

customer and demand charges, among others. In the U.S., some growth in existing timebased rate programs has occurred: enrollment in Oklahoma Gas and Electric’s variable 

peak pricing program has grown to 130,000 customers, whose average peak load has 

dropped 40 percent.

191 In addition, enrollment in Baltimore Gas & Electric’s residential 

time-based rate program surpassed 1,000,000 customers in 2015,192 and program 

participants realized an average demand reduction of approximately 16 percent in the 

same year.193

In the last year, as noted elsewhere in this staff report, several state commissions have 

approved small-scale pilots of time-based rates. Other commissions are going further. 

For example, the CPUC is requiring the state’s investor-owned utilities to implement 

residential default time-of-use rates by 2019.194 In mid-2017, the CPUC approved the 

utilities’ proposals for residential time-of-use pilot programs, as a means of testing the 

plans prior to full implementation in 2019.

195 The Colorado PUC also approved a pilot 

 190 FERC, A National Assessment of Demand Response Potential (2009), http://www.ferc.gov/legal/staff-reports/06-

09-demand-response.pdf. 191 Faruqui, A. and Lessem, N. (The Brattle Group), A Global Survey of Customer-Centric Tariff Reforms, presented 

to Commerce Commission Wellington, New Zealand (Aug. 24, 2017) at 7, 9, 

http://www.brattle.com/system/publications/pdfs/000/005/490/original/A_Global_Survey_of_Customercentric_Tariff_Reforms.pdf?1504111043. 192 EIA, EIA-861 Dynamic_Pricing_2015 data file, https://www.eia.gov/electricity/data/eia861/. 193 Faruqui, A. and Lessem, N. (The Brattle Group), A Global Survey of Customer-Centric Tariff Reforms, presented 

to Commerce Commission Wellington, New Zealand (Aug. 24, 2017) at 10, 

http://www.brattle.com/system/publications/pdfs/000/005/490/original/A_Global_Survey_of_Customercentric_Tariff_Reforms.pdf?1504111043. 194 Order Instituting Rulemaking on the Commission’s Own Motion to Conduct a Comprehensive Examination of 

Investor Owned Electric Utilities’ Residential Rate Structures, the Transition to Time Varying and Dynamic Rates, 

and Other Statutory Obligations, Docket R.12-06-013, (CPUC Jul. 3, 2015), 

http://docs.cpuc.ca.gov/publisheddocs/published/g000/m153/k110/153110321.pdf. 195 See supra notes 158, 159, and 160.
December 2017 Assessment of Demand Response and Advanced Metering

Page 38 Federal Energy Regulatory Commission

rate scheme in anticipation of moving to default residential time-of-use rates in the 

future.196

However, the Brattle Group notes that barriers remain to the wide-spread uptake of timebased rates. These include the need to understand how customer bills will change as rates 

are redesigned, to simulate how customers may react to bills based on rate changes, and 

to engage in direct customer outreach to explain why rates are changing. In addition, a 

gradual transition to the new tariffs—with an opt-out for certain populations—and 

appropriately designed pilots to test customer response, may ease the transition.197

• Coordination of Federal and State Policies. A lack of coordination among policies at 

the federal and state levels could slow the development of demand response resources. 

Some states have taken action to coordinate state retail demand response programs with 

organized markets so that programs at the retail and wholesale levels are complementary. 

For example, as discussed above, the CPUC required California’s three IOUs to establish 

Demand Response Auction Mechanism pilots to test the viability of using a competitive 

mechanism to procure aggregated demand response resources outside of utility programs, 

in order to provide local, system and flexible capacity. Participation in CAISO’s two 

demand response products has also grown significantly over the past three years.198 The 

CPUC’s goal is to integrate all supply-side demand into CAISO wholesale markets by 

2018. In addition, the CPUC held a series of workshops in early 2017 to identify policy 

issues related to the new model of demand response outlined in the state’s demand 

response potential study, and to identify remaining barriers to the integration of demand 

response into the CAISO market.199 The CPUC subsequently issued a decision that, 

among other things, established two new working groups to address the identified 

barriers and to integrate new models of demand response into the CAISO market.200

• Demand Response as a Distribution System Resource. Demand response has 

traditionally been used to address operational and planning needs on the bulk power (i.e., 

transmission) system. The growth of distributed energy resources (such as solar PV) and 

efforts to modernize U.S. electric grid infrastructure, have spurred interest in considering 

how demand response and other non-traditional resources may be used to address 

reliability needs on the distribution system. For instance, a survey conducted by the 

 196 See supra note 166. 197 Faruqui, M. (The Brattle Group), Moving forward with tariff rate reform, presented to EEI Webinar on Rate 

Design (Apr. 6, 2017), at 13-14, 

http://www.brattle.com/system/publications/pdfs/000/005/423/original/Moving_forward_with_tariff_reform.pdf?14

91590325. 198 In 2016, proxy demand response (PDR) capacity totaled 160 MW and reliability demand response resource 

(RDRR) capacity was 1,320MW. See CAISO, 2016 Annual Report on Market Issues and Performance (2017) at 

30-31, http://www.caiso.com/Documents/2016AnnualReportonMarketIssuesandPerformance.pdf. 199 Administrative Law Judge’s Ruling Requesting Responses To Questions Regarding The Pathway To New Models 

Of Demand Response, Implementation Of The Competitive Neutrality Cost Causation Principle, And Remaining 

Barriers To The Integration Of Demand Response Into the CAISO Market, Docket No. R.13-09-011 (CPUC May 

22, 2017), http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M187/K328/187328217.PDF. 200 Order Instituting Rulemaking to Enhance the Role of Demand Response in Meeting the State’s Resource 

Planning Needs and Operational Requirements, Docket No. R.13-09-011 (CPUC Sep. 15, 2017).
Assessment of Demand Response and Advanced Metering December 2017

Federal Energy Regulatory Commission Page 39

Smart Electric Power Alliance and Navigant notes that 10 percent of utility survey 

respondents are already using demand response to provide “non-wires grid upgrades” on 

targeted distribution circuits, and that another 60 percent are planning, researching, or 

considering such use.201 

Barriers to the use of demand response as a distribution system resource include the need 

to determine what services it can provide to the distribution grid, and the need to put a 

value on those services. A study by LBNL identifies a set of system requirements that 

distribution system operators monitor and manage to safely and reliably operate the 

distribution grid; these include maximum capacity relief, emergency load transfer, steady 

state voltage management, power quality, phase balancing, and outage recovery.202 

Demand response programs designed to meet bulk power system needs may have a 

limited ability to meet this set of distribution system requirements. For example, 

requiring “all or nothing” rather than partial dispatch of resources based on location, and

using peak periods that do not necessarily coincide with the timing of primary or 

secondary distribution feeder maximum demand may not allow demand response

resources to provide value to the distribution system where and when they are most 

needed.

203 LBNL’s research suggests that re-designing demand response programs to 

allow for resource dispatch that is more targeted to prevailing system needs—such as 

through location-differentiated incentives or program enrollment—may increase the 

value of demand response to the distribution system.204 Distribution system prices that 

vary by location may also allow more targeted demand response. Furthermore, to take 

advantage of some types of demand response programs to manage power quality and 

phase balancing, investments in new sensing technologies and inverter load controls may 

be necessary.205 However, tweaking demand response programs to better meet the needs 

of the distribution system has the potential to affect the operation of the bulk power 

system, suggesting that greater coordination between the operators of the distribution and 

bulk power systems may be beneficial.

 201 Smart Electric Power Alliance, 2017 Utility Demand Response Market Snapshot (Oct. 2017), at 6, 42, 

https://sepapower.org/resource/2017-utility-demand-response-market-snapshot/. 202 Cappers et al. (LBNL), Future Opportunities and Challenges with Using Demand Response as a Resource in 

Distribution System Operation and Planning Activities, LBNL-1003951 (2016) at 4-6, 

https://emp.lbl.gov/sites/all/files/lbnl-1003951.pdf. 203 Id. at 15-17. 204 Id. at 17-19. 205 Id. at 19-20.