First-Ever 'Click On' Load Response Program Set to Begin in New England; Pilot Program Endorsed by Massachusetts Division of Energy Resources

Business Wire, Oct 31, 2000

Business/Energy Editors

HOLYOKE, Mass.--(BUSINESS WIRE)--Oct. 31, 2000

The operator of New England's bulk electric power grid today announced the launch of a pilot program for New England that will provide quantifiable load response capabilities with the click of a computer mouse.

The voluntary pilot program, initiated by ISO New England Inc., and endorsed by the Massachusetts Division of Energy Resources (MA DOER), will use the Internet to enable ISO New England to rapidly interrupt power blocks of participating industrial/commercial customers to decrease demand on the region's six-state power grid. Retx.com's Internet-based Load Management Dispatcher (LMD) will serve as the pilot program's application service provider and EFI, a Boston-based energy consulting firm, will serve as program consultant to ISO New England.

The pilot project will run from November, 2000 to March, 2001 for 10-15 Megawatts (MW) of load from certain customers of New England Power Pool (NEPOOL) companies including suppliers such as NewEnergy Inc. and Select Energy Inc.; utilities such as: National Grid and NSTAR; and large customer buying groups such as PowerOptions.

The pilot's objectives are twofold: to demonstrate that a load response program can increase reliability on the electric power grid and give industrial and commercial customers the ability to respond to price signals in the wholesale electricity marketplace. If the pilot proves successful, a larger Group Load Response Program would be implemented by next summer, New England's peak season for electricity consumption. ISO New England's grid is the interconnected bulk generation and high voltage transmission system that serves 6.5 million electric customers in six-state region.

When the cost of power is high, or in the event of a capacity deficiency, these interruptible customers will be paid to curtail their use of power from the grid--either by cutting back on their use of electricity or by obtaining power from their own on-site generation.

"Voluntary load response programs have long been used as a power system management tool," said Philip J. Pellegrino, President and CEO of ISO New England Inc. "What is different with this pilot program is that via the Internet, ISO New England will be able to manage load, in virtually real-time, with the click of a mouse. In addition, the ISO will have the ability to measure the amount of MWs interrupted, which, eventually, will enable the ISO to decrease power system operating reserve requirements, which could amount to millions of dollars in savings. This pilot program marks the first time larger retail customers will be able to respond to price signals within the market."

By being able to quantify the amount of load reduction through the pilot program, ISO New England will ultimately be able to lower operating reserve requirements used to operate the region's power grid safely and reliably - and also reduce air emissions that would have come from the plants that would have provided operating reserve.

This will be accomplished by treating the amount of interruptible MWs as ten-minute non-spinning reserves, one of the NEPOOL wholesale market products that provides for system reliability. By acting as ten-minute non-spinning reserve, these interruptible MWs will reduce the amount of generation resources committed for reserves. ISO New England planning studies indicate that with a 500MW subscribed load reduction, savings in electricity production costs could run upwards to $30 million per year and reductions in air pollution could total up to 280 tons of NOx, 200 tons of SO2 and 230 thousand tons of CO2.

"This pilot program is a triple-win situation," said Commissioner David O'Connor of the Massachusetts Division of Energy Resources. "The retail customer can respond to prices in the market, the ISO helps assure system reliability and lowers production costs, and the environment wins with lower air emissions."

How it Works

The pilot program will utilize Load Management Dispatcher(TM), an Internet application service developed and supplied by Retx.com of Atlanta, Georgia. The LMD will track ISO New England market prices and provide automated notification to the energy service or load provider, or customer, when predetermined opportunities become available in the market.

The LMD will be integrated into the ISO New England' s hourly energy trading platform, which will then stream real-time electronic price signals to the energy company. This information is combined with the commercial customer's energy usage and load management strategies to establish an economic dispatch opportunity.

ISO New England will begin notification of a potential interruption with a click of the mouse. Once notification is received, the customer can then decide whether or not to interrupt its load based on whether the spot energy price exceeds the customer's desired dispatch point.

Once the interruption is completed, LMD collects end-use customer usage data via a meter data recorder installed at the customer's site. LMD then provides customer-specific hourly performance data that is matched with the hourly clearing price. This information will allow the ISO to properly credit the customer financially and will have metered data on the amount of interrupted MWs that can be measured against the operating reserve requirement.