On December 22, 2020, the FERC released its Assessment of Demand Response and Advanced Metering. Issuance of this annual report, now in its fifteenth year of publication, is required under section 1252(e)(3) of the Energy Policy Act of 2005. The details presented in the report were drawn from the latest publicly available data (2018 data for retail markets and 2019 data for wholesale markets) that is used to gauge demand response potential. The report also contains FERC staff findings using non-public data to assess demand response activity in California during the summer 2020 when the state experienced four out of its five hottest August days since 1985.
Advanced meters are meters that measure and record usage data at a minimum, in hourly intervals. They provide usage data daily to energy companies and may also offer data to consumers. Information is used for billing and other purposes. Advanced meters range from hourly interval meters to real-time meters with built-in two-way communication allowing for the ability to record and transmit data instantaneously.
The publication covers the six components set forth in section 1252(e)(3) of Energy Policy Act 2005, which instructs the agency to address the following:
the potential for demand response as a reliable and quantifiable resource for regional planning purposes
penetration and saturation rate of advanced meters and communications technologies, systems, and devices
time-based rate programs and current demand response programs
regulatory obstacles that hinder customer participation in demand response, peak reduction, and critical period pricing programs
the annual resource contribution of demand resources
measures taken to guarantee that, in regional transmission planning and operations, demand resources are provided equal treatment as a proven, reliable resource relative to the resource obligations of any load-serving entity, transmitting party, or transmission provider
According to FERC staff findings, 2018 marked the first time the estimated nationwide advanced meter penetration rates for each of the commercial, industrial, and residential customer classes were consistently at least 50%. The report also noted that in 2018, enrollment in retail dynamic pricing programs increased by 722,149 customers, while enrollment in retail incentive-based demand response programs grew by 311,300 customers.
From 2018 to 2019, demand resource participation in the wholesale markets increased to 32,408 MW, rising approximately 2,734 MW, or 9%. In 2019, for the first time since 2015, Southwest Power Pool reported demand response capability in its markets and introduced tariff changes to allow for behind-the-meter generation and demand response resources to meet resource adequacy requirements.
Additionally, the annual report asserts the following:
advanced meters remained the most common type of metering used nationwide
from 2017 to 2018, the number of operational advanced meters in the United States rose to 86.8 million, an increase of 7.9 million
based on Energy Information Administration (EIA) data, the 86.8 million advanced meters installed and in operation nationwide, out of the 154.1 million meters in the United States, signifies a 56.4% penetration rate
in 2018, utilities in ReliabilityFirst reported 21.6 million advanced meters in operation
from 2013 to 2018, the number of advanced meters installed by utilities in ReliabilityFirst nearly tripled
Since the 2019 report was published, electric utilities in states, including New Mexico, Missouri and New Jersey, introduced new proposals or were permitted to submit proposals for distribution of advanced meters. Overall, state regulators are:
requiring advanced meter plans from utilities to clearly show how advanced meters will generate customer savings, pinpoint and lessen system outages, and facilitate more dynamic rate offerings
requesting or requiring further justification from utilities for investments in advanced meters