CES Self-Help Demand Response Summer Recap for New England Clients

in October 3rd, 2022

By Andrew Price, President & COO

Thursday September 22 marked the official end of summer in the Northern Hemisphere. With the arrival of cooler weather, we can look back and review the CES Self-Help Demand Response program that applies to many of our clients with facilities in New England.

First a bit of background. As New England consumers are aware, the Independent System Operator New England (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 electric load in New England during that hour represents that account's share of the roughly $2 billion in capacity payments ISO-NE makes each year to the region's electricity generators. CES clients that predict the hour when the annual system peak occurs, and are able to reduce load that hour, 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 electricity suppliers with a lower capacity tag resulting in lower electricity costs the next year.

CES monitors weather and electric load conditions for New England throughout the summer. Using this information, we alert our clients enrolled in our Self-Help New England Demand Response Program on those days, and during those hours, when we believe an annual system peak may occur. In New England we know that peak loads will occur during the summer when air conditioning is operating at its maximum (this will eventually change as the region transitions away from fossil fuel heating systems to electrically driven systems like air and ground source heat pumps). For now, we know that the peak will most likely occur on one of the hottest, most humid days of the year, during the mid-to-late afternoon hours.

So how did the CES Self Help Program perform in 2022? We sent out a total of 15 communications during 2022. Most of these messages were sent in July and August and were early warnings about upcoming weather systems and post event recaps.

We provided a strong curtailment recommendation for only four different days: July 20 (4pm to 8pm), August 4 (5pm to 7pm), August 8 (4pm to 7pm), and August 9 (the August 9 curtailment was called off at 3:30 pm). Unfortunately, the proverbial bar was set relatively low on July 20, and we came very close to exceeding the reported demand level of 24,330 MW on many days throughout July and August. We try to strike a balance between issuing many alerts - improving the odds of calling the correct day and hour but increasing the costs imposed on participants – and providing too few alerts. Given the vagaries of the weather, the large amount of load that is now shifting to avoid the peak hour, and potential after the fact adjustments by ISO-NE we sometimes must be defensive.

After the fact load adjustments by ISO-NE can be particularly relevant in years like 2022 when several hours have very similar loads. We had the following to say in our August 5 recap covering our August 4 curtailment recommendation.

ISO-NE is reporting a peak electrical load yesterday of 24,226 MW during the 6-7 PM hour. This is 100 MW below the peak year-to-date of 24,330 MW reported on July 20, also during the 6-7 PM hour The small 100 MW difference between these two hours is potentially within the range of after-the-fact adjustments that ISO-NE could make to reported real-time loads. As a result, it is too soon to say with complete certainty whether July 20 or August 4 will end up having the peak load hour.“

Although original ISO-NE data indicated that July 20 from 6-7 PM was the peak load hour, ISO has more recently indicated that August 4 during the 5-6 PM has preliminarily been adjusted higher to 24,471 MW, setting the peak load for forward capacity market purposes. We caution that August 4 5-6 PM is still preliminary and subject to change.

We work hard to provide this service for our New England clients as it can have significant financial benefits to those clients that are able to reduce loads during a limited number of peak summer hours. The CES Self-Help program is intentionally different than many others; our alerts are often expository and written by a human. This allows us to convey the nuances and uncertainties that underpin our forecast and provide context about why we did, or did not, recommend curtailment action. We provide as much advance notice as possible, often several days in advance with additional updates as the critical day approaches. There is always a recap on the day following an event. We believe this approach best equips our clients to make decisions about load reductions.

Let us know if you participated in the CES New England Self-Help program and have any feedback – we always appreciate hearing from you and incorporating your suggestions. 

Photo by Lens Traveler


Subscribe to our Market Summary and Insider Newsletter

Sign up with your email address to receive news and updates about energy markets

Your cart

We value your privacy

We use cookies to customize your browsing experience, serve personalized ads or content, and analyze traffic to our site.