1. NAESB Measurement and Verification Model Business Practice Retail Electric Demand Response
5/29/09 update

2. Activities 11 - Conference calls/WebEx Two day meeting in Baltimore
One every other week
Good participation form group members and industry experts
Two day meeting in Baltimore
Discuss approach and matrix
1 WEQ Leadership/NAESB Board meeting

3. Approach for Retail Standard
Determine that the RTO draft recommendation could apply to the retail draft recommendation with proper wording changes
Determine that the RTO draft recommendation provides a framework for the retail draft recommendation, but more detail is necessary
Determine that the retail draft recommendation needs to be more prescriptive than the wholesale draft recommendation.

4. Model Business Practice
Measurement and Verification (M&V) standards are intended to facilitate Demand Response in retail electricity markets by providing a common framework for the following:
Transparency: accessible and understandable M&V requirements for Demand Response products
Accountability: criteria that will enable the Program Administrator to accurately measure performance of Demand Response resources
Consistency: standards applicable across retail electricity markets
Comprehensive: strives to cover all forms of Demand Response

5. Applicability
Model Business Practices should cover Dispatchable and non-Dispatchable programs
Dispatchable
Capacity Programs:
Direct Load Control
Firm Service Level
Guaranteed Load Drop
Critical Peak Pricing
Ancillary Service Programs:
Spinning Reserve
Non Spinning Reserve
Regulation Services
Energy Service Programs
Dispatched for economic reasons
Non Dispatchable – need to define

6. Coordination Working closely with
Wholesale standards group to maintain consistency with current approved standard
NERC to insure consistency with reliability standards
AEIC as they develop load research standards with regards to M&V
Industry groups and Market Participants involved in providing or evaluating demand response programs such as EPRI, EnerNoc, Comverge, GoodCents

7. Scope Limited to Demand Response programs only:
Does not include Measurement and Verification of energy efficiency programs or for permanent load reductions.
Confined to the retail markets. If a utility has programs that are bid into and operate in the wholesale markets then the wholesale standard will take precedence.
Standards are voluntary across state jurisdictions. They can be adopted by individual state regulators
Program Administrator has significant flexibility to adopt more stringent requirements in most areas to meet regional needs.

8. Product Categories
Wholesale group developed model business practice for each of 4 Product types:
Energy Services
Capacity Services
Reserve Services
Regulation Services
Retail group is developing one model business practice to cover all Demand Resource products in the retail space

9. NERC Diagram

10. Performance Evaluation
A performance evaluation methodology is used to determine the Demand Reduction Value provided by a
Demand Resource. The standards include descriptions
of acceptable Baselines and alternative performance
measurements.
Maximum Base Load
Meter Before / Meter After
Baseline
Metering Generator Output
Note: Eliminated the distinction of Type I and Type II for Baseline

11. Definition of Terms
Definition of Terms was developed to clarify specific meanings of terms while providing consistency and conformance where possible to:
Wholesale Standard
FERC
NERC
AEIC
Currently working through the NAESB glossary committee to adopt definitions – may take several more meetings to complete

12. Demand Response Event Timing

13. Key Definitions
Demand Resource: A Load or aggregation of Loads capable of measurably and verifiably providing Demand Response.
Demand Response: Changes in electric use by demand-side resources from their normal consumption patterns in response to changes in the price of electricity, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.

14. Key Definitions
Program Administrator: An investor owned utility, governmental or cooperative utility or independent aggregator of demand response programs who has responsibility for developing and operating demand response programs identified in this standard. The Program Administrator shall have regulatory reporting responsibility to the utility regulatory body in the jurisdiction of the retail load and reporting responsibility to NERC

15. Key Definitions
Baseline: A method of estimating the electricity that would have been consumed by a Customer or Demand Resource in the absence of a Demand Response Event. It may be calculated using interval metering and/or statistical sampling techniques. The figure below illustrates the concept of Baseline relative to a Demand Response Event.

16. Baseline Conceptualization

17. General Characteristics
Advance Notification (remote switch vs no switch)
Deployment Time
Reduction Deadline
Ramp Period determined by Program Administrator
Release/Recall
Normal Operations
Demand Resource Availability Measurement
Aggregation
Transparency of Requirements

18. After-The-Fact Criteria
After-the-Fact Metering Requirement
Meter Accuracy
Details of Meter/Equipment Standards
Meter Data Reporting Deadline
Meter Data Reporting Interval
Clock / Time Accuracy
Validating, Editing & Estimating (VEE) Method
On-Site Generation Meter Requirement

19. Performance Evaluation Methodologies
Maximum Base Load
Meter Before / Meter After
Baseline
Metering Generator Output

20. Maximum Base Load:
A performance evaluation methodology based solely on a Demand Resource’s ability to reduce to a specified level of electricity Demand, regardless of its electricity consumption or Demand at Deployment.

21. Maximum Base Load:

22. Meter Before / Meter After:
A performance evaluation methodology where electricity Demand over a prescribed period of time prior to Deployment is compared to similar readings during the Sustained Response Period.

23. Meter Before / Meter After:

24. Baseline:
A method of estimating the electricity that would have been consumed by a Customer or Demand Resource in the absence of a Demand Response Event. It may be calculated using interval metering and/or statistical sampling techniques. The figure below illustrates the concept of Baseline relative to a Demand Response Event.

25. Baseline:

26. Metering Generator Output:
A performance evaluation methodology, used when a generation asset is located behind the Demand Resource’s revenue meter, in which the Demand Reduction Value is based on the output of the generation asset.

27. Next Steps
Complete the glossary committee definition review – estimate 2 meetings
Review document for consistency
Move information and graphics in definition section to appropriate section in the document
Remove any unused definitions
Review document flow
Plan is to present Model Business Practice at the next NAESB meeting in July