Demand response in California will be considered one of the top choices for meeting the state’s resource needs, thanks to the approval of a bill, SB 1414, awaiting the governor’s signature.
Once again, the state leads the way in energy efficiency — and hopefully, other states will follow, focusing on the many benefits of meeting load with demand response, which is undervalued in California and other states, says the Environmental Defense Fund.
The bill sets a precedent because it requires state regulators to place a financial value on different types of demand response. “The bill is very specific about values; demand response’s effect on transmission, power plants, greenhouse gas emissions and the environment,” says Lauren Navarro, senior manager of clean energy for EDF, which sponsored the bill.
In a demand response program, residential, commercial and industrial customers curtail or reduce their usage during peak demand periods, when it’s expensive for the utility to supply power. Demand response not only helps utilities avoid building expensive new power plants; it help prevent them from meeting peak demand with dirty plants, such as coal.
“The statute makes demand response as important a player as generation,” says Navarro.
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The bill directs the California Public Utilities Commission (and electric utilities) to consider demand response, not just fossil fuel power plant investments, as a partner in planning how to balance and ensure reliability for the state’s power grid, says a press release from EDF.
Under the bill, the PUC must “properly value” demand response. The bill establishes a mechanism for the PUC to value certain types of demand response for their ability to help meet energy system and reliability needs — plus support the state’s goals for cutting greenhouse gas emissions.
“What the bill does is require the PUC to develop demand response programs to manage the power grid in real time. The PUC must economically dispatch the ISO has another option to meet California’s energy needs instead of turning on a power plant,” she explains.
The bill, when signed by the governor, will allow for the bidding of demand response directly into energy markets, says Navarro.
“These programs could include programs that are more technology- driven and rely on things like smart phones and smart technologies,” she says. For example, a residential customer might receive a signal from the utility about peak demand, and the customer will turn off his or her dishwasher, she says.
EDF is pushing demand response nationally, and hopes that the California bill will be a model for other states, says Navarro.
Yes, let’s bring on inexpensive, environmentally friendly, and smart demand response programs nationally, once again following in California’s footsteps.