Experts say U.S. demand response implementation plan is missing money and vision

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By Jesse Berst

The third leg of the American demand response (DR) initiative was finally released last week. Part one was a national assessment of DR potential. Part two was a national action plan. Part three is the Implementation Proposal for the National Action Plan on Demand Response.

From where I sit, the plan is tepid and uninspired. It is full of platitudes – "a coalition... should build on DOE's work" –  without any of the explicit steps needed in an implementation roadmap. A bit like releasing an "implementation" plan for Mideast peace that says nothing more than "groups should form and those groups should build on previous efforts."

But I'm not a specialist on this issue and I don't track all the ins and outs. To bring more perspective, I invited brief comments from two expert insiders. They have a more positive take, but they still see things missing.

Chris King, Chief Regulatory Officer, eMeter, on the missing vision

As a board member of the National Action Plan Coalition, I would like to see one significant change in the Implementation Proposal: a federal vision for demand response.

The Implementation Proposal is appropriately modest – in these fiscally constrained times – and calls for no new federal investment in the smart grid.  It rightly points out the extensive work already funded and underway on the “details” of demand response – yet more dynamic pricing and customer behavior pilots, additional technical papers, further resource databases.  This is all good.

EISA specifically called for FERC to develop a NAP that has “a national communications program that includes broad-based consumer education and support.” That’s missing here.  What the federal government can and should do – and it costs nothing – is become the drum major.  The states have created the parade, by adopting demand response-friendly energy policies, approving major smart meter deployments (over half), and committing to renewable portfolio standards (over two-thirds).

The federal government needs to get in front of the parade and communicate the meaning of demand response to the average American.  It should communicate that demand response means pricing options, energy information feedback, plus convenient, automated thermostat and appliance control.  It should communicate that the benefits of demand response include lower energy expenses (at least slower cost increases), reduced air emissions, fewer and shorter power outages, expanded renewable energy, and more efficient and lower cost electric vehicle charging.

Demand response will never be top of mind for Americans, but many of these potential benefits already are.

Judith Schwartz, President, To the Point, on the missing money

The good news is that the federal proposal recognizes that the original idea of a single campaign doesn’t make sense in light of the diversity of consumer attitudes and regional variances across the country.  It encourages parties to engage and listen to the consumer directly.  It recognizes the value of cross-stakeholder collaboration that is being encouraged by several public/private partnerships including the  National Action Plan Coalition on Demand Response (NAPC), the Smart Grid Consumer Collaborative (SGCC) and the Critical Consumer Issues Forum (CCIF). It suggests there has been enough research and experimentation by enlightened utilities to provide a basis for a solid and adaptable message framework as evidenced by the Communications Action Guide issued.

What the Proposal misses is a realization of the tremendous reach that would be possible with even a minimal amount of new seed funding from the federal government. There is a cultural roadblock when it comes to paying for the integrated consumer education programs required to make huge smart grid technology investments most effective.  Underwriting energy literacy programs delivered through community-based organizations is a worthwhile investment that would pay big dividends for all stakeholders and consumers in the long run.

Do Chris and Judith have it right? What would you like to see from the implementation plan in particular and the federal government in general? Please use the comment form.

Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory's Energy & Environment directorate.

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