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Overview
A well-known challenge facing system operators on the electric grid is being able to generate enough megawatts to meet peak electricity demand. As the peak electricity demand grows, the traditional way to continue to meet the peak is to build more power plants. Instead of building more generation, an alternative strategy is to slow or prevent the growth of the peak electricity demand via demand side management. One of the many demand-side strategies for managing peak electricity demand is demand response, which targets electricity reductions during the peak hours via responses from all types of consumers. Some programs focus on securing large reductions of electricity usage from commercial and industrial consumers when called upon by the system operator. Other strategies include implementing time-varying pricing for all consumers, including residential consumers. We will discuss the pros and cons of these and other demand response strategies and the tradeoffs facing the different stakeholders when implementing these strategies as a means of producing ?negawatts? instead of megawatts during the peak hours of electricity demand. Please prepare for the discussion by reading the articles provided on the event website. Refreshments will be served.
Key Questions

What are the challenges with implementing and verifying the effectiveness of demand response programs…

• from the utility’s point of view?
• from the consumer’s point of view?
• from the regulator’s point of view?

 When paying a consumer for a reduction in electricity usage during peak hours, how do you estimate ‘business as usual’ for that day (i.e. their baseline) when what they actually do is definitely not business as usual?  One important extension of this is how do you ensure that consumers who respond to a demand response event are paid fairly for their actions while also ensuring that the grid operator is not overpaying for the reduction provided?