1

Demand Reduction in the Forward Capacity Market:

Expectations & Reality

Kathryn Parlin, West Hill Energy & Computing

Jennifer L. Chiodo, Cx Associates

2

Overview

ISO NE FCM Vermont’s Custom Commercial Portfolio

• Sampling• M&V• Findings

Recommendations

3

Demand Markets

What?• ISO capacity procurement includes demand savings

from efficiency programs Where?

• ISO NE Forward Capacity Market (FCM)• PJM Reliability Pricing Model (RPM)

4

Grid Reliability

Generation Extensively Metered Concentrated Real time data Accurate Dispatchable Known operating schedule Operators – few, known and

knowledgeable

Energy Efficiency Not Metered Aggregated

• Widely dispersed• Diverse• Not individually metered• Varying schedule and output

Operators – many, unknown and unaware of project interaction with market

5

Process

ISO M-MVDR VT M&V Plan VT FCM Bid DPS Verification Contract Sampling Project level M&V Analysis and Report Reviews Annual Realization Rates Established

6

VT Portfolio Verification

Demand Savings Calculation Paper verification of kWh IPMVP

methods Baseline changes Round 1: January 2007 – December 2008 Round 2: 2009 Round 1 RR applies to savings from June 2010 Capacity payments began in 2008

7

Round 1 Sampling

Stratification Variables• End use: HVAC, Lighting, Other• Type: Retrofit, MOP/NC• Size: Large, Medium, Small

“Real Time” Measure Sampling• Retrofit projects• No metering planned by program• Evaluation team pre/post metering

8

Real Time Sampling Redux

Dynamic Sample Frame Size threshold established before population

known Project tracking and reporting issues Timing – projects completed prior to sampling Customer issues 7 of 23 sampled projects completed

9

Project Verification

M&V Plans developed for each project All IPMVP Options used

• Option A (Partially measured) typically for lighting • Option B (Metered equipment) HVAC, refrigeration,

compressed air, etc.• Option C (Whole facility) 15 minute interval data,

large kW, consistent measure performance• Option D (Calibrated Modeling) New Construction

Excellent customer participation

10

Project Approach

Scheduling

Sampling group description

Summer CF - Weekdays In Session

ON timeAS METERED

Summer CF - Weekdays Staff Only

ON timeAS METERED

Summer CF - Holidays ON time

AS METERED

ISONE Summer

Peak Weekdays in

Session

ISONE Summer

Peak Weekdays Staff Only

ISONE Summer

Peak Holiday and

ShutdownsBlended

Summer CFCorridor-General 1.000 0.625 0.000 46.75 7 1 0.787Corridor-General 1.000 0.863 0.201 46.75 7 1 0.815Corridor-General 1.000 0.330 0.200 46.75 7 1 0.758Corridor-General 1.000 0.604 0.800 46.75 7 1 0.797School Classroom 0.114 0.036 0.000 26.25 7 1 0.050School Classroom 0.373 0.045 0.000 26.25 7 1 0.155School Classroom 0.146 0.036 0.000 26.25 7 1 0.063School Classroom 0.541 0.000 0.000 26.25 7 1 0.218School Classroom 0.539 0.000 0.000 26.25 7 1 0.218School Library 0.949 0.109 0.147 36.5 7 1 0.547School Library 0.840 0.110 0.147 36.5 7 1 0.486School Gymnasium 1.000 0.415 0.358 26 7 1 0.450School Gymnasium 1.000 1.000 1.000 26 7 1 0.523School Offi ces 0.773 0.000 0.000 57 7 1 0.678School Maintenance Rooms 0.953 0.038 0.000 57 7 1 0.840

• Safety

11

Project M&V

Metering Equipment Seasonality of Weather

• Temperature• Daylight

Regressions/Schedules

0.0

0.5

1.0

1.5

2.0

2.5

65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89

Ave

rage

Pow

er (k

W)

Outside Air Temperature (°F)

kW vs Temperature

0

0.5

1

1.5

2

2.5

3

3.5

4

kW

12

00.10.20.30.40.50.60.70.80.9

Realization Rates by Stratification Variable

Winter Summer

TYPE SIZE END USE

13

0

2

4

6

8

10

12

14

16

18

20Co

unt o

f Re

aliz

ation

Rat

esWinter Realization Rate Distribution

0

5

10

15

20

25

Coun

t of

Real

izati

on R

ates

Summer Realization Rate Distribution

14

Conclusions

+ 80/10 Confidence/Precision Level of rigor essential for ensuring reliability High degree of planning and flexibility required Real time sampling infeasible Benefits have broad potential

• IRP• T&D Constraints