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June 12th, 2015

Self-Help Demand Response Program

by Andrew Price, President & COO

As we are approaching the summer season in New England, we thought it a good time to review the reason for the CES Self-Help Demand Response Program, how we will alert our customers when we think action would be helpful and how we weigh whether or not a given day might be an annual peak day across all of New England.

The CES Self-Help Program

  • As you are probably aware, ISO-NE assigns every retail electricity account in New England a capacity tag based on its load during the hour of annual peak the prior year. This value (measured in MW) divided by the total load that hour represents that account's share of the $1.1 billion in capacity payments ISO-NE makes each year to the region's generators. If you were able to predict the hour when the annual system peak occurs and are able to reduce your load that hour, you will have a smaller capacity tag  and therefore be responsible for a smaller share of the total amount paid to generators. This is taken into consideration by suppliers in quoting prices to serve your account, so a lower capacity tag will result in lower electricity costs the next year.
  • It is difficult to predict with certainty when the annual system peak will occur. We know that it will be during the summer when commercial air conditioning is operating at its maximum. This means that the peak will most likely occur on the hottest, most humid day of the year, during the mid- to late-afternoon hours.
  • CES tracks weather conditions and past loads in New England, and using this information, CES alerts customers on those days and during those hours when we believe an annual system peak may occur.
  • This alert provides information to customers to enable them to voluntarily reduce electric loads if they are able and thereby lower their capacity tag, should the peak occur during one of those hours. The CES Self-Help program is always voluntary and without fees. There is never any obligation to respond to our notifications and, if you are able to respond during the hour of the ISO-NE system peak, 100% of the savings are yours to keep.

CES Self-Help Program Alerts

  • CES monitors weather forecasts and load conditions in New England. When we see a forecasted stretch of hot, humid weather in the 5-day forecast where we think loads are likely to be high, we send out an email Alert to all of our customers in our Self-Help Program.  This is an informational alert - it is not an Action Alert.
  • In the morning of a day that we believe could be a peak load day, we will send out an email alerting customers that we could see a peak load that day and telling customers to stay tuned for more specific Action Alerts later in the day.
  • If loads build during the morning and look like they may be peaking later in the afternoon, we will send out Action Alerts recommending that those customers that are able reduce loads during specific time windows, usually 2-4 hours.  If loads do not appear to be peaking, we will send out a notice by early afternoon advising customers that we do not think the peak will occur that day.

CES Assessments

  • CES uses statistical analysis to determine how high system loads are expected to be during the upcoming summer, assuming that the region faces one or more heat waves over the summer.  (A heat wave is a high temperature of above 90 degrees for three consecutive days.)
  • We set the threshold at the lower range early in the season and based on actual loads, adjust the range over the course of the summer
  • Our effort is to achieve a reasonable balance between false alerts, where we advise you to reduce loads on days when loads are not high enough to achieve a peak, and failing to send an alert on a day that turns out to be a peak.

Success Under the Program

  • The annual peak load is only known after-the-fact when ISO-NE reviews all of its loads and makes adjustments in actual loads called for under its rules.
  • As more and more electricity customers attempt to reduce during those hours where loads are projected to be high and if they are successful, the actual peak load may shift to another hour. The problem is that peak avoidance works only when the number of customers reducing load is relatively small and the amount of load actually reduced is also small. Large reductions will simply move the peak to the next highest hour and so on, making it more difficult to predict loads and therefore the hour of system peak.
  • To date, CES' track record has been good; however, past success is no guarrantee that we will be able to predict this summer's peak. In fact, we did not predict last summer's peak load in large part because the actual peak load was more than 2,000 MWs (about 10%) below peak loads in prior years.
  • The CES Self Help program is unrelated to any formal ISO-NE demand response programs that may be offered. If you are also enrolled in the Real Time Demand Response, Real Time Emergency Generation Program, or any other demand response program offered by ISO-NE, you should also respond to official notices from your Demand Response Provider.

Next Steps:

  • If you are a client, please let us know via email if:
    • There are people within your organization that you would like us to add to our notification list.
    • You no longer wish to be notified by CES of a possible peak load condition on the grid. If so, CES will remove you from our contact list.
  • Consider the actions you might be able to take to reduce electrical load upon receipt of the first CES Self Help notice.
  • Wait for our first email notification, as summer is just around the corner.

If you have any questions about this matter, please contact your CES representative or call us at our corporate office (866) 408-4591.

We hope you find this voluntary program valuable.

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