Dual Environmentalism: Demand Response Mechanisms in Wholesale and Retail Energy Markets

This note argues that a dual jurisdictional approach to demand response programming is better suited to mitigate environmental harms than an “either-or” regulatory model. Through an exploration of FERC’s authority over wholesale demand response, state authority over retail-level demand response, and implications for electricity and capacity markets arising out of the Court’s decision in FERC v. EPSA, this note will offer effective legal mechanisms for mitigating environmental costs, while fostering environmental benefits. The next section of this note analyzes the strengths and weaknesses of state and federal regulatory approaches to demand response in isolation. Based on this assessment, this note suggests the policy mechanisms most conducive to environmentally-conscious electric energy regulation. This note concludes with a model regulatory scheme that utilizes demand response to mitigate global climate change and advance environmental sustainability

Customer Engagement Plans for Peak Load Reduction in Residential Smart Grids

In this paper, we propose and study the effectiveness of customer engagement plans that clearly specify the amount of intervention in customer's load settings by the grid operator for peak load reduction. We suggest two different types of plans, including Constant Deviation Plans (CDPs) and Proportional Deviation Plans (PDPs). We define an adjustable reference temperature for both CDPs and PDPs to limit the output temperature of each thermostat load and to control the number of devices eligible to participate in Demand Response Program (DRP). We model thermostat loads as power throttling devices and design algorithms to evaluate the impact of power throttling states and plan parameters on peak load reduction. Based on the simulation results, we recommend PDPs to the customers of a residential community with variable thermostat set point preferences, while CDPs are suitable for customers with similar thermostat set point preferences. If thermostat loads have multiple power throttling states, customer engagement plans with less temperature deviations from thermostat set points are recommended. Contrary to classical ON/OFF control, higher temperature deviations are required to achieve similar amount of peak load reduction. Several other interesting tradeoffs and useful guidelines for designing mutually beneficial incentives for both the grid operator and customers can also be identified

Incentive Design for Direct Load Control Programs

We study the problem of optimal incentive design for voluntary participation of electricity customers in a Direct Load Scheduling (DLS) program, a new form of Direct Load Control (DLC) based on a three way communication protocol between customers, embedded controls in flexible appliances, and the central entity in charge of the program. Participation decisions are made in real-time on an event-based basis, with every customer that needs to use a flexible appliance considering whether to join the program given current incentives. Customers have different interpretations of the level of risk associated with committing to pass over the control over the consumption schedule of their devices to an operator, and these risk levels are only privately known. The operator maximizes his expected profit of operating the DLS program by posting the right participation incentives for different appliance types, in a publicly available and dynamically updated table. Customers are then faced with the dynamic decision making problem of whether to take the incentives and participate or not. We define an optimization framework to determine the profit-maximizing incentives for the operator. In doing so, we also investigate the utility that the operator expects to gain from recruiting different types of devices. These utilities also provide an upper-bound on the benefits that can be attained from any type of demand response program.Comment: 51st Annual Allerton Conference on Communication, Control, and Computing, 201