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DR and Power Delivery

DR and Power Delivery. Setting: Transmission and Distribution present different challenges and opportunities. PD-1: Develop market rules and price signals to reveal the temporal and locational value of electricity

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DR and Power Delivery

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  1. DR and Power Delivery • Setting: Transmission and Distribution present different challenges and opportunities. • PD-1: Develop market rules and price signals to reveal the temporal and locational value of electricity • PD-2: ISO-NE, State PUCs, and utilities should consider adopting PBR plans for T and D companies

  2. Power Delivery: (1) Regional System Planning • PD-3: Conduct a continuing, regional power system planning process to identify system needs and consider alternative strategies to meet them. • PD-4: The regional power system planning process should evaluate on an even-handed basis all feasible, comparable solutions to emerging problems including generation, transmission, and demand-response resources.

  3. Power Delivery (2) Regional Power System Investment Policy • Setting: First, the planning process should identify emerging needs and resource gaps. • PD-5: Market-based responses to regional power system needs should be encouraged to emerge, wherever possible • PD-6: Continue the regional dialogue to explore resource choices, cost allocation, and cost recovery to address problems of reliability and persistent economic congestion

  4. Option A. Limit interventions to transmission alone • Alternative approach A: • Use market-driven approaches to meet regional needs, and avoid subsidies if possible; • Where markets do not fully address system needs, the planning process should provide a coordinated, regulated transmission plan of upgrades to ensure bulk power reliability; • Costs of such transmission upgrades should be recovered in regulated transmission rates. • NEDRI does not address the cost allocation debate (regional vs. participant vs. zone, etc)

  5. Option B.“Efficient Reliability” test-- transmission and alternatives • Alternative Approach B: • Use market-driven approaches to meet regional needs wherever possible; • Where markets do not fully address reliability needs, apply an “Efficient Reliability” test; • Resource neutrality – both transmission and non-transmission investments eligible for cost recovery • Cost minimization – choose lowest cost, reliable solution for support and cost recovery

  6. Option C. Transmission provider invests in alternatives • Alternative approach C: Same approach as in B, but non-transmission options supported by transmission tariffs only when they are selected and supervised by transmission providers • Transmission planners apply Efficient Reliability test; • Resource neutrality – both transmission and non-transmission investments eligible for cost recovery • Cost minimization – choose lowest cost, reliable solution for support and cost recovery • Performance-based ratemaking may be used to create least-cost and reliability incentives for transmission providers

  7. Power Delivery (3) Distribution System Planning • PD-7: New England’s electric distribution companies should seek out and acquire cost-effective demand-side resources that would improve the reliability, operation, and economics of the local distribution system • Distribution-level pilots and experience are needed; • State PUCs should study rules to support the use of DR as part of distribution company operations; • State PUCs should study tariffs to provide credits to customers who lower demands in critical locations; • State PUCs should consider PBR plans that would reward reliable service and de-link distribution profits from throughput.

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