Demand Response in

MISO Markets

NASUCA Panel on DR

November 12, 2012

About MISO

• MISO is an independent, non-profit organization and is committed to the safe, cost-effective delivery of electric power

• MISO’s Three Primary Roles:– Reliability - keeping the lights on throughout the Midwest– Wholesale Market Management - allowing the sale and transfer

of wholesale electricity to reduce costs and promote reliability– Regional Transmission Planning - working with all transmission

stakeholders to develop the region’s transmission grid in a way that promotes public interest; reliability, and enables lowest-cost delivery of electricity and implementation of public policies

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Market Based Demand Response

• MISO operates an open wholesale energy market where Market Participants can buy or sell energy in a fair, efficient and non-discriminatory manner

• Markets work best when there is vigorous and voluntary participation by both buyers (demand response) and sellers

• Demand response can:– reduce the need for new generating capacity– address real-time reliability issues– mitigate peak prices and price volatility– limit supplier market power

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Demand Response Participation

• MISO’s markets provide opportunities for demand to participate on a comparable basis to supply side resources (generation)

– Provides price signals for demand resources to make flexible energy use decisions

– Provides for full cost recovery of the flexibility offered by demand resources

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MISO Services for Demand Resources

• Energy and Ancillary Services Markets– Day ahead Energy– Real time Energy– Ancillary Services Markets

• Emergency Procedures• Resource Adequacy• Ancillary Service Markets• Resource Planning

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Day-Ahead Energy Market

• Participation in Day Ahead Market provides a hedge against real-time congestion

• Offer types

– Fixed Demand Bid – Loads indicate the amount to be purchased, regardless of price (~85% of market demand on a daily basis)

– Price Responsive Demand (PRD) – Loads submit PRD bids, either “physical” or “virtual,” to manage price risk (~15% of market demand on a daily basis)

– Demand Response Resources (DRRs) – Treated in all respects like generation; DRRs are evaluated and cleared based on offer components, including start, notification, minimum run times and availability

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Real-Time Energy Market

• Participation in Real-Time Market provides price signals for supplying real-time energy

• Offer types– Price Responsive Demand (PRD) – Load Serving

Entities manage load by responding to Real-Time clearing prices

– Demand Response Resources (DRRs) – DRRs can be dispatched based on economics, in the same manner as a supply-side resource

• Including ability to participate in 5-minute balancing market

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Ancillary Services Markets

• Enables demand resources to provide Ancillary Services– Spin and Regulation services

• Offer types– Demand Response Resources Type I

• Capable of supplying a specific quantity of Energy to the market through physical load interruption

• Committed in the same manner as a Supply Resource

– Demand Responsive Resource Type II• Capable of supplying dispatchable Energy to the market

through behind-the-meter generation or controllable load• Can be Committed and Dispatched in the same manner as

Generation Resources

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Emergency Procedures

• Demand Resources during emergency conditions are used to avoid load interruptions during Real-Time generation emergencies

• Needed infrequently in MISO to date

• Demand Resources provided – 3,000 MW of relief on August, 2006 – 300 to 500 MW in February 2007

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Resource Adequacy

• Provides a mechanism for Demand Resources to be counted as capacity similar to generation resources by MISO Load

• Approximately 9,000 MW of Demand Response in MISO is eligible to count towards capacity by MISO Load

– Today most of this 9,000 MW is registered as Emergency Demand Response

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Resource Planning

• Enables MISO to plan the transmission system for use of demand resources– MISO conducts long-term reliability planning to

determine the need for and to coordinate new investment in generation and transmission in each region

– MISO, through its MISO Transmission Expansion Planning (MTEP) process, has committed more than $5b for new transmission investment

– In MTEP planning studies, demand resources compete against generation or transmission to address internal resource deliverability

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Questions?

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