Notes from this weeks Demand Side
Response Symposium.
1) Demand Response is being pushed to become part of the capacity planning process. This may sound small but it's not. Today, when utilities do transmission capacity planning, they have not 'counted on' DR. However in the future they may very well do so. This means that DR has "grown up" in the utility's minds and more importantly, if they count on it instead of it being "upside" then they will continue to support it and demand for DR will go up over time.
2) Emergency DR pricing drops may be offset by short spiking LMP prices: As DR supply comes to the market in response to strong price signals, there is an 'over the horizon' concern that prices will ultimately drop. PJM has what the call the 'lost revenue' which is now going to be opened up to DR. I don't have all the specifics but will post them when I do, or please offer them in the comment section if you have them.
Net Net: PJM and FERC are interested in seeing price signals stay up so that more DR is brought to the market to help satisfy the long term planning needs for both peak generation and transmission capacity.
All this is BULLISH for ENOC.
Some progress is being made on a "NEW DR" program that we are ardent proponents of. FERC really seems to be on the ball. The 'industry inside' folks are smarter than people give them credit for. Stay tuned.
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