1. The Regulatory Assistance Project 110B Water Street Hallowell, Maine USA 04347 Tel: 207.623.8393 Fax: 207.623.8369 50 State Street, Suite 3 Montpelier, Vermont USA 05602 Tel: 802.223.8199 Fax: 802.223.8172 27 Penny Lane Cedar Crest, New Mexico USA 87008 Tel: 505.286.4486 Fax: 773.347.1512 Website: http://www.raponline.org Regional Demand Resource Policy Development: MWDRI and MADRI Demand Response Town Meeting June 3, 2008 Richard Sedano

2. Introduction Regulatory Assistance Project RAP is a non-profit organization, formed in 1992, that provides workshops and education assistance to state government officials on electric utility regulation. RAP is funded by the Energy Foundation, US EPA & US DOE. Richard Sedano was Commissioner of the Vermont Department of Public Service, 1991-2001

3. The Regulatory Assistance Project RAP Mission: RAP is committed to fostering regulatory policies for the electric industry that encourage economic efficiency, protect environmental quality, assure system reliability, and allocate system benefits fairly to all customers.

4. Midwest Demand Resources Initiative -- MWDRI The retail demand response committee within Organization of MISO States (OMS) –Bob Lieberman (IL) is lead commissioner Complements MISO DR working group –DR program attribute education for all Bring demand response beyond direct load control Connect demand side to resource adequacy

5. MWDRI Activities Established Principles for demand response http://misostates.org/DRPrinciplesApproved8November20 07.pdf http://misostates.org/DRPrinciplesApproved8November20 07.pdf Coordinating with OMS Resource Adequacy WG Experimental Economics Dynamic Pricing –States want models to consider More education

6. Experimental Economics MISO has asked George Mason University to develop a wholesale market model –Model allows players to make strategic investments in resources in an accelerated way –The experiment is getting motivated individuals to demonstrate how a market works, rather than relying solely on theory –Reveals insights, unexpected outcomes –Expect it will show value of demand side to OMS members and others

7. MWDRI Experimental Economics opportunities will emerge later in the year Next MWDRI meeting will be scheduled post-NARUC Smart Grid workshop for OMS in September Distribution list maintained by OMS (contact bill@misostates.org)bill@misostates.org

8. Mid-Atlantic Distributed Resources Initiative - MADRI MADRI focuses on five states, DC, MD, DE, PA, NJ –Allen Freifeld (MD) is lead commissioner –Other states informed and can get involved. –Focus on PJM-state interface Focus areas: –regulation (throughput incentive solutions, dynamic pricing), –advanced meter infrastructure, –small gen interconnection, –environmental issues, and –business models to support DR

9. MADRI MADRI website is www.energetics.com/madriwww.energetics.com/madri MADRI website has an updated AMI toolbox. More than 40 new documents have been added. MADRI states have collaborated on a filing at FERC. The states are concerned that FERC should reconsider its DR incentive policy. –FERC allowed a system of incentives to expire at the end of 2007.The MADRI states are concerned about resource adequacy

10. MADRI agenda Using PJM demand resources roadmap –MADRI's focus is on what states can do to implement or support elements of the DR roadmap that are valuable. –One PJM level issue that MADRI expects to spend more time on later this year is the proposal to include energy efficiency in the PJM supply market. –MADRI is expecting to stage a webinar for the states on decoupling and incentives for energy efficiency, using new material that RAP has developed.

11. MADRI agenda MADRI is also expecting do more work on dynamic pricing, and To resume discussions with environmental regulators on the prospect of utilizing back up generators in the PJM emergency operation plan in order to avoid rotating blackouts and the potential for using these back up machines for longer periods while the system recovers.

12. A Regional DR Goal? MADRI states had been considering endorsing a regional goal for demand response -- it seems that the success and the urgency of these issues may have overtaken the states, and it remains to be seen if the MADRI states get back to this idea.

13. MADRI -- near future The next MADRI meeting will be in Trenton NJ on Friday, June 27. Dynamic pricing will be discussed. –More information about the meeting will be sent to the e-mail list when it is available. Anyone not on the distribution list can send a message to Rich Sedano (rapsedano@aol.com) to get on.rapsedano@aol.com

14. Thanks for your attention rapsedano@aol.com http://www.raponline.org