(Comment period ended February 7, 2003. See comment from PNGC Power.)
This issue paper examines demand response in the retail market for electricity. It begins by explaining why demand response is important, why it has been deficient in the past, and how that deficiency has become more serious with the current electrical industry structure.
The paper then explains that "demand response," as it is used here, is not "conservation" as the Council has used the term. It discusses how the difference affects the kinds of policy goals we can consider.
The paper describes and evaluates the main options for increasing demand response. It begins with real-time pricing, which offers a number of advantages in principle, but faces a number of obstacles that rule out quick and widespread adoption. It examines time-of-use pricing, which faces somewhat fewer obstacles and offers somewhat less promise. The paper then moves to a number of forms of payment for reductions in use, which have been adopted fairly widely in our region and elsewhere. The payment for reductions options are more familiar and enjoy more acceptance, but have transactions costs and limited participant pools.
Next, the issue paper proposes to estimate the potential amount of demand response in the region, and the value of achieving that potential.
Finally, the paper invites comments on the issue in general and some aspects of the issue in particular.