FERC ruling: Demand response providers to be paid for services

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Quick Take:  In light of the FERC ruling outlined below, prospects for Comverge look even better (see my interview with Comverge CEO Blake Young published Tuesday). But it also may attract even more competition, which could speed up the battle for leadership in demand response. – Jesse Berst

Demand response providers are to be paid for their services if they benefit the operation of the electric grid, according to a new ruling from the Federal Energy Regulatory Commission (FERC).

The ruling mandates that organized wholesale energy market operators pay DR providers the market price for power when those resources can balance supply and demand as an alternative to additional power generation, and when it's cost-effective.

"The approach to compensating demand response resources as we require here will help to provide more resource options for efficient and reliable system operation, encourage new entry and innovation in energy markets, and spur the deployment of new technologies. All of this contributes to just and reasonable rates," said FERC Chairman Jon Wellinghoff.

In response to the new rule, distributed energy resource management company Viridity Energy gave an enthusiastic thumbs up. "The Commission's decision recognizes the value demand response provides to the nation's electric grid and to customers, said Audrey Zibelman, Viridity president and CEO. "The decision empowers customers to take control of their electric bills and to provide a service that enhances the reliability of the grid while improving the competitiveness of electric markets."

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