NEPOOL Files Summer Power Conservation Plan with FERC
The New England Power Pool (NEPOOL) has filed an energy conservation program with FERC that is designed to encourage reduced consumption of electricity during peak demand periods and help moderate price fluctuations in the wholesale electricity market. The program could reduce the daily energy requirement in the region by 300-600 MW and produce annual savings of $30 million.
The load response program allows large electricity users to actively monitor the hourly price fluctuations in the wholesale electricity market, and provides financial incentives for them to reduce their usage when prices begin to rise. The program is expected to go into effect by the middle of May.
"This load response program is another important step in making the New England electricity market more robust," said William W. Berry, CEO of ISO New England, the regional electric transmission grid operator. "It creates an opportunity for certain users - those customers capable of 100 kW interruption or more - to have more control over their energy costs, promote conservation and efficiency, and help ensure the continued reliability of the system."
ISO New England predicts that the program's savings will enable it to reduce the level of reserve capacity from the 3,500 MW it currently requires from northeastern generators. Maintaining a large reserve margin "overcommits" the system, the ISO said, and results in tens of millions of dollars in payments to various plants to run at low levels so that they are available to produce power on short notice to meet peak demand.
Under the proposed conservation program, customers would be free to enter into agreements with a NEPOOL member of their choosing, subject to state regulatory policy, regardless of whether the company is the customer's current electricity supplier. Atlanta-based Retx will serve as the program's application service provider and will supply its Internet-based Load Management Dispatcher (LMD) to participating customers. Customers would be equipped with the LMD software that allows them to monitor the cost of electricity each hour of the day.
For some customers, the cost of the software will be subsidized by NEPOOL. If the price of electricity begins to climb, these customers can elect to reduce their consumption until the price drops again. Other customers can also reduce their consumption for system reliability purposes. Either way, the customers will be eligible to be paid for reducing their consumption. All compensation is paid through the NEPOOL member that signed up the customer.
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