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US Federal Trade Commission: Demand response should compete on equal basis in Texas

Fri, 03/15/2013 - 17:36 -- Editor

The US Federal Trade Commission (FTC) said the Electric Reliability Council of Texas (ERCOT) should be changed to allow demand response, energy storage and generation resources to compete on equal terms.

Platts reported ERCOT’s reserve margin is expected to fall below its target of 13.75% this summer and the FTC suggested "ERCOT configure its [security constrained economic dispatch system] to allow DR, energy storage, and generation sources to participate and compete on equal terms."

The FTC also said that because ERCOT differs from other major independent system operators in that it has no capacity market, curtailment service providers or demand-response aggregators may not be needed if there are sufficient incentives to ensure the market for demand response grows.

As an example of a market-design change that could encourage demand response, FTC said that "market participants in ERCOT should be able to get accurate information about current and expected future market prices and should be able to trade at prices based on that information."

Based on customers' past consumption, load-serving entities could allow consumers to buy the right to use power in the future and either pay or get refunds "at the real-time price for the difference between the amount of power the customer reserved in advance and the amount the customer actually consumed," the FTC said.