Draft for Comment of the National Action Plan on Demand Response The Federal Energy Regulatory Commission Staff DOCKET NO. AD09-10 Prepared with the support of The Brattle Group GMMB Customer Performance Group David Lineweber, Ph.D. March 11, 2010 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. Table of Contents EXECUTIVE SUMMARY........................................................................................................................................ 1 INTRODUCTION ............................................................................................................................................ 1 STRATEGIC VISION ........................................................................................................................................ 2 STRATEGIES AND ACTIVITIES ........................................................................................................................... 2 INTRODUCTION.................................................................................................................................................. 5 LEGISLATIVE MANDATE.................................................................................................................................. 6 BACKGROUND ON DEMAND RESPONSE ............................................................................................................ 7 Defining Demand Response................................................................................................................. 7 The Geography of Demand Response ................................................................................................. 8 SIDEBAR 1: DEMAND RESPONSE IN ORGANIZED MARKETS ................................................................................ 10 THE OBJECTIVE OF THE NATIONAL ACTION PLAN.............................................................................................. 11 PROCESS FOR DEVELOPING THE NATIONAL ACTION PLAN .................................................................................. 12 OVERVIEW OF STAKEHOLDER FEEDBACK ......................................................................................................... 13 STRUCTURE OF THE NATIONAL ACTION PLAN .................................................................................................. 15 PART 1: STRATEGIC VISION OF THE NATIONAL ACTION PLAN ............................................................................ 17 1.1 THE COALITION .................................................................................................................................... 17 Why Should a Coalition Be Involved in Implementing the National Action Plan? ............................ 17 Who Should Be Involved?.................................................................................................................. 18 What Elements Make a Coalition Successful?................................................................................... 18 How Should the Coalition Be Established?........................................................................................ 19 1.2 EXAMPLES OF THE COALITION APPROACH ................................................................................................. 21 The National Action Plan for Energy Efficiency ................................................................................. 21 The Air Bag and Seat Belt Safety Campaign....................................................................................... 21 SIDEBAR 2: COORDINATION OF ENERGY EFFICIENCY AND DEMAND RESPONSE ..................................................... 23 PART 2: STRATEGIES AND ACTIVITIES................................................................................................................ 25 2.1 TECHNICAL ASSISTANCE TO STATES .......................................................................................................... 26 Introduction....................................................................................................................................... 26 Technical Assistance Actions ............................................................................................................. 28 Establish a National Forum................................................................................................................ 28 Conduct Informational and Educational Sessions for Policymakers and Regulators ........................ 29 Conduct Communications Training for State and Local Governing Officials..................................... 31 Build a Panel of Demand Response Experts ...................................................................................... 32 Sponsor Technical Papers .................................................................................................................. 33 Establish a Program for Technical Assistance for Demand Response ............................................... 34 Establish a Demand Response Grant Program .................................................................................. 35 2.2 NATIONAL COMMUNICATIONS PROGRAM................................................................................................. 36 Introduction....................................................................................................................................... 36 Objectives of the National Communications Program ...................................................................... 41 National Communications Program Structure .................................................................................. 42 2.3 TOOLS AND MATERIALS FOR USE BY CUSTOMERS, STATES AND DEMAND RESPONSE PROVIDERS ....................... 59 Develop a Web‐based Clearinghouse of Demand Response Materials ............................................ 60 Develop or Enhance Demand Response Estimation Tools and Methods.......................................... 68 SIDEBAR 3: THE DRIVE MODEL ................................................................................................................... 78 i National Action Plan on Demand Response – DRAFT – APPENDIX 1: COALITION EXAMPLES..................................................................................................................81 THE NATIONAL ACTION PLAN FOR ENERGY EFFICIENCY ..................................................................................... 81 THE AIR BAG AND SEAT BELT SAFETY CAMPAIGN............................................................................................. 82 APPENDIX 2: RESEARCH GAPS...........................................................................................................................85 SOCIAL SCIENCE RESEARCH ISSUES................................................................................................................. 85 TECHNICAL RESEARCH ISSUES ....................................................................................................................... 86 APPENDIX 3: EXAMPLES OF EXISTING DEMAND RESPONSE PROGRAMS ............................................................89 RETAIL PROGRAMS ..................................................................................................................................... 90 Arizona............................................................................................................................................... 90 California............................................................................................................................................ 90 Connecticut........................................................................................................................................ 91 Delaware............................................................................................................................................ 92 Florida ................................................................................................................................................ 92 Georgia............................................................................................................................................... 94 Illinois................................................................................................................................................. 94 Massachusetts ................................................................................................................................... 95 Michigan ............................................................................................................................................ 96 Washington, D.C. ............................................................................................................................... 98 WHOLESALE PROGRAMS............................................................................................................................ 100 APPENDIX 4: LIST OF COMMENTERS............................................................................................................... 103 ii Executive Summary Introduction The Federal Energy Regulatory Commission (FERC or Commission) is required to develop the National Action Plan on Demand Response (National Action Plan) as outlined in section 529 of the Energy Independence and Security Act of 2007