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FERC backs DR supporters in NYISO complaint

By: Restructuring Today |

A FERC order issued Friday agreed with a group of DR supporters that NYISO’s prohibition of using backup generators in its day-ahead DR program (DADRP) is unjust and unreasonable. But the commission did not put the complaining DR group’s proposed fix in place.

Instead, the commission told NYISO to make appropriate changes to the program — the only one of four DR programs that bans generation.

Comverge, EnergyConnect, EnerNOC, Viridity and Walmart Stores filed the complaint against NYISO, arguing its prohibition of behind-the-meter generation in the DADRP was unfair. Before the latest order, FERC often held DR based on generation was functionally no different from DR based on load reductions.

NYISO’s ban on generation, which was in place well before Order 745, went against the practice in other ISO/RTOs. FERC specifically prohibited MISO in its Order 745 case from not paying DR based on using generators and the resource is allowed to take part at full compensation in other energy markets.

The ISO countered that behind-the-meter generation DR is different from DR based on load cuts and raises particular market and reliability concerns that justify its exclusion from the DADRP.

Behind-the-meter generators are not subject to metering or reporting requirements. The ISO has limited operational control over them and limited visibility into their availability and performance.

FERC rejected the ISO’s claims that due to technological requirements and calculation complexities, DR facilitated by generation was not similarly situated to other DR. From the perspective of the grid, DR produces a load cut in the wholesale market from a validly set baseline whether or not it is facilitated by a backup generator.

Order 745 does not require ISOs to allow generation-backed DR but it also does not ban them, the commission noted. FERC based its finding — that the current system is discriminatory — on the record in the complaint case, it said.

The commission approved the rule blocking generators from the program in 2003 but since that time, NYISO developed rules in other programs that allow behind-the-meter generation to take part in DR.

The complainants wanted FERC to direct a change to two definitions to allow behind-the-meter generation into the program, but NYISO argued it needed more changes than that if it were forced to do so. FERC agreed with the ISO that the changes would have to be more complex and allowed 180 days for proposed revisions to be filed.