ISO-NE issues white paper on potential approaches to demand resources in markets pending possible legal and regulatory outcomes

On April 17, ISO New England released the white paper Contingency Plan Addressing the Potential Loss of FERC Jurisdiction Over Demand Resources. It details possibilities for continued demand resource participation in New England, in response to uncertainty surrounding FERC Order No. 745, Demand Response Compensation in Organized Wholesale Energy Markets.

Order No. 745 was vacated in a May 2014 decision by the US Court of Appeals for the District of Columbia Circuit in Electric Power Supply Association v. FERC. An appeal was filed, and on May 4, 2015, the US Supreme Court agreed to review the decision. The Supreme Court’s decision is expected by end of June 2016.

A range of scenarios

The white paper provides different possible scenarios for demand resource participation in the region’s wholesale electricity markets, including:

• Maintaining an approach that is fairly consistent with the status quo
• Allowing demand response participation solely in the capacity and ancillary services markets
• Removing demand resources from the supply-side of the wholesale market platform

Purpose

The ISO seeks to initiate a regional dialogue with the white paper and at stakeholder committee meetings (including the upcoming Markets Committee meetings on May 5 and 6). Market participants and state regulators will have an opportunity to discuss the possible scenarios, introduce additional ideas, and prepare for possible outcomes of the ongoing litigation and regulatory action.

Timing

With a decision from the Supreme Court not expected until spring 2016, full integration of demand resources into the energy and reserves markets must be postponed at least a year from the current planned date of June 1, 2017.