|
|
|
|
|
Retail Provider, Others Say Texas REPs Should Be Compelled To Offer Residential Demand Response
The following story is brought free of charge to readers by VertexOne, the exclusive EDI provider of EnergyChoiceMatters.com
In comments in a Texas PUC proceeding on the goal for the average total residential load reduction in ERCOT, Octopus Energy said that the PUC should require that retail electric providers serving residential customers must offer a demand response program to residential customers
PURA 39.919(b)(1) requires that PUC rules implementing the demand reduction goal, "must provide for the adoption of a program that ... provides demand response participation to residential customers where reasonably available."
The draft rule narrowly implements PURA 39.919 by addressing the REP offering of a residential "responsive device program" (e.g. smart thermostat, smart appliance) rather than broadly addressing residential "demand response"
See background on the draft rule for residential DR from REPs here
Octopus argued that if REPs are only permitted, but not required, to offer a residential demand response program (as proposed in a PUC draft rule concerning the goal), then it is possible that no residential demand response programs would be offered by an REP
"The plain reading of
the statute suggests that such an outcome is not the intent of the legislature," Octopus argued
As such, Octopus said that PURA 39.919(b)(1) should be interpreted, "to
mean that any residential customer in the ERCOT region should have the opportunity to opt into
a DR program, if they have installed, or are able to get installed, a smart responsive appliance or
device that can be controlled by a REP."
Octopus further said that PURA 39.919(b)(1) should be interpreted as meaning that, "every REP serving residential customers should be required to offer DR
programs during winter and summer, with customers having the full autonomy to decide whether
to participate in such offerings."
In separately filed comments, the Texas Advanced Energy Business Alliance (TAEBA) similarly said that the PUC should require all REPs to offer demand response programs during both winter and summer
Environmental Defense Fund and Alison Silverstein Consulting jointly suggested, "requiring every REP (including Providers of Last
Resort) to offer demand response programs to all its residential customers."
However, Base Texas REP, LLC supported the proposal for publication which would not mandate that REPs offer residential responsive device programs
"A blanket requirement, as proposed by other
stakeholders within this project, would impose an unnecessary and burdensome mandate on
REPs, particularly those that do not rely on the specific smart appliances or devices required for
traditional DR programs," Base Texas REP said
Base Texas REP said that a mandate for smart responsive device programs would limit innovation and ignore customer choice
Moreover, Base Texas REP said that such a mandate could create an uneven playing field under which REPs who already have a specific type of demand response in place (e.g. responsive smart device DR) would gain a competitive advantage over other REPs with different business models, including those with alternative demand management technologies (such as battery storage)
Proposed ERCOT-Funded Programs
Several REPs and other entities proposed that REPs should be provided incentives from ERCOT to offer residential demand response programs
Staff's draft rule to implement PURA 39.919 would allow REPs to receive funding under the TDUs' energy efficiency programs for the residential demand response programs, but does not propose any ERCOT-funded programs
The Texas Energy Association for Marketers (TEAM) and the Alliance for Retail Markets (ARM) (collectively, the REP Coalition) said that ERCOT should be directed to propose new market products or modify existing products to incentivize the aggregation of residential customers under the REPs' smart responsive device demand response programs envisioned by the draft rule
In separate comments, TAEBA and Octopus likewise suggested creation of ERCOT-based incentive
mechanisms for residential DR
Reporting Burden
Various REPs and other stakeholders expressed concerns with the reporting requirements in the draft rule
Octopus said that the proposed reporting requirements, "punish good actors with additional compliance
obligations without any corresponding benefit or incentive to provide DR services."
Among other things, the proposed rule would mandate that REPs offering a qualifying program shall report, "the date of each demand response event, including each demand response event start time and stop time and the ESI IDs deployed for each event."
Octopus said that this provision is needlessly "intrusive" into a REP’s competitively sensitive operations
Base suggested that the ESI ID requirement in the above-quoted proposed rule section should be replaced with a "total
customers enrolled" reporting requirement
Wholesale-Linked Retail Customer Rates
In its comments, Octopus said that the PUC should advise the legislature to re-think the current ban on residential retail electric rates that are indexed to the wholesale market, adopted after Winter Storm Uri
Octopus said that such a ban resulted from, "one specific
REP’s business model that allowed for full indexed pricing for residential customers." (e.g. Griddy, though not explicitly named by Octopus in its comments)
Octopus said that it was able to implement a wholesale-index retail product with guardrails that prevented, "runaway
pricing".
Octopus said that wholesale-indexed products could be offered with a price cap
Alternatively, wholesale-indexed product participation could be limited to customers with batteries, flexible loads, or on-site generation, Octopus said
Octopus said that the current ban on residential wholesale-indexed products, "has been to completely eliminate the best incentive available to promote
residential demand response: wholesale price transparency."
Modifying the current ban on wholesale-indexed products could serve to incentivize residential demand response, Octopus said
Customer Compensation
The rule does not address or mandate any specific compensation from REPs to customers for DR.
Environmental Defense Fund and Alison Silverstein Consulting jointly recommended that the rule add language to mandate that residential demand response
customers receive "reasonable" compensation that, "reflects the resource adequacy and cost relief
value of their demand response efforts."
Project 56966
ADVERTISEMENT ADVERTISEMENT Copyright 2024 EnergyChoiceMatters.com. Unauthorized copying, retransmission, or republication
prohibited. You are not permitted to copy any work or text of EnergyChoiceMatters.com without the separate and express written consent of EnergyChoiceMatters.com
REP Urges PUC To Discuss With Legislature The Current Ban On Wholesale-Linked Residential Rates, Use Of Retail Plans With Wholesale Pricing To Promote DR
September 27, 2024
Email This Story
Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Director of Policy and Research, Retail Energy
• NEW! -- Director, Load Forecasting
-- Retail Supplier
• NEW! -- Wholesale Markets Analyst -- Retail Supplier
• NEW! -- Origination Analyst
-- Retail Supplier
• NEW! -- Settlements Analyst
-- Retail Supplier
• NEW! -- Billing Supervisor
|
|
|
|
|