Demand Response Under EWPC Part 2

Reference: The Potential for Residential Demand Response on Transmission and Distribution Assets

I was conducting a generative dialogue with Len that resulted in the posts shown below. To follow very well this post, I suggest reading them:

Playing With Fire and Collapse Part 22 -- Playing With Fire and Collapse Part 21 -- Playing With Fire and Collapse Part 20 -- Playing With Fire and Collapse Part 19 -- Playing With Fire and Collapse Part 17 -- Playing With Fire and Collapse Part 16 -- Playing With Fire and Collapse Part 15

In response to posts sequence, Len wrote on 12.26.06: “Jose Antonio: Your cogent discussion raises some issues with IMEUC which I hope to clarify in a third article in the series here on EnergyPulse in perhaps a couple of weeks, provided I can submit it up to the high standards of the editorial staff. Thank you.”

I am adding some new insights for Len as a result of an effort to comprehend his posts related to the gasoline analogy and to make it easy to update his IMEUC with a third article:

1) It is impractical to have a switchboard between refineries and customers. So, it is also impractical to have a switchboard from generators and customers. The wholesale market’s engineering criteria, including maintenance programming, contingency runs, energy commitment and dispatch procedures, locational marginal prices, real time operation, etc., do not allow for a switchboard between generators and customers.

2) The wholesale market of gasoline, where gasoline is produced at refineries, is similar to wholesale electricity market; that is where retailers purchase their gasoline and electricity. Natural gas retailers could have similar situations.

3) At the gasoline market, customers go to the best retailers to get the best short run deals. So, instead of designing a switchboard on the wholesale market, which is impossible, there is a need to first develop EWPC retailers and second to implement the switchboard between retailers and customers. I am no expert on gas retailing, but assume it will be similar process.

4) Short run retail competition will result in several market segments.

a. One of those segments, for example, could be under the switchboard. For example, in that segment will have to auto finance resources like demand response, energy efficiency and energy storage or find alternative financing means or just do not investment whatsoever. In this case, customers will get a “continuous choice of several suppliers at time intervals comparable to my gasoline or other purchases.”

b. In an extreme segment, customers could not be under the switchboard. For example, customers getting full financing deals in resources like demand response, energy efficiency and energy storage may not be able to switch so easily.

5) T&D is a natural monopoly that competes with gas pipelines monopolies, not in the short run, but in the long run.

The above suggestions are not to be taken without considering the posts mentioned above. EWPC is then one generic and open market architecture and design that doesn’t does not impose any restriction whatsoever to the revised IMEUC retailing switchboard.