On October 29, 2015, ISO New England Inc. (“ISO-NE”) and the New England Power Pool (NEPOOL) Participants Committee (together, the “Filing Parties”) jointly submitted revised ISO-NE tariff provisions proposing three changes related to demand response and its participation in the ISO-NE wholesale markets. 

First, the Filing Parties seek to delay full integration of demand response in the ISO-NE wholesale markets by one year, from June 1, 2017, to June 1, 2018, due to uncertainty arising from litigation of Order No. 745 as to whether FERC has jurisdiction over demand response resources in wholesale energy markets (see October 26, 2015 edition of the WER).  In the joint filing, the Filing Parties explain that “full integration” means enabling demand response resources to (1) fully participate in the Day-Ahead and Real-Time Energy Markets, (2) provide Operating Reserve and participate in the Forward Reserve Market, and (3) receive obligations and compensation in the capacity market that are fully comparable with those of dispatchable generation resources.  The Filing Parties further explain that, if demand response resources cannot integrate into the Day-Ahead and Real-Time Energy Markets, demand response resources also cannot provide Operating Reserves, because Energy Market offers are used to designate and compensate resources providing reserves.  Therefore, if the U.S. Supreme Court upholds the D.C. Circuit’s decision that FERC does not have jurisdiction over demand response, the participation of demand response resources in the Energy Markets as currently reflected in the ISO-NE tariff will not be permitted.

In addition, the Filing Parties propose to replace the current “90/10” Demand Response Baseline with the “mean 10 of 10” methodology.  Under the 90/10 Demand Response Baseline, ISO-NE estimates the expected energy consumption of a demand response asset by simulating a ten-day rolling average of meter data from the most recent days on which the resource was not dispatched.  ISO-NE then takes 90 percent of the previously calculated baseline for each five-minute interval of an Operating Day and adds to each interval 10 percent of the interval meter data from the most recent day on which the resource was not dispatched.  In contrast, the “mean 10 of 10” methodology is an actual ten-day rolling average of meter data from the ten most recent days (of the same type) on which the resource was not dispatched.    The Filing Parties argue that the “mean 10 of 10” methodology is easier to administer and performs as well or better, as measured by accuracy, bias, and variability metrics, as the “90/10” methodology.

Finally, the Filing Parties propose to modify the simultaneous auditing rules for Real-Time Demand Response (“RTDR”) and Real-Time Emergency Generation (“RTEG”) Resources.  The Filing Parties explain that, under their proposal, market participants with RTDR and RTEG Resources have the option to audit their RTEG Resources by simultaneously dispatching only the co-located RTDR Assets at the time of the RTEG Resource audit.  Alternatively, market participants may continue to audit their RTEG Resources by simultaneously dispatching the entire RTDR Resource associated with co-located RTDR and RTEG Assets.

ISO-NE requested an effective date of December 31, 2015 for the delay and baseline changes, and an effective date of June 1, 2016 for the simultaneous auditing changes.  A copy of the filing is available here.