UNITED STATES OF AMERICA
BEFORE THE

FEDERAL ENERGY REGULATORY COMMISSION

National Action Plan on Demand ResponseDocket No. AD09-10-000

COMMENTS OF

THE NEW YORK INDEPENDENT SYSTEM OPERATOR, INC.

The New York Independent System Operator, Inc. (“NYISO”) respectfully submits these
comments in response to the Draft for Comment of the National Action Plan on Demand
Response released by the Federal Energy Regulatory Commission Staff on March 11, 2010
(“Draft Plan”)1. The NYISO strongly supports the Commission’s and Staff’s efforts in this
proceeding and continues to support and rely on demand response as a valuable supply resource
that plays an essential role in the operation of efficient wholesale energy markets. These
comments seek to emphasize the critical importance and need for standards development for
measurement and verification protocols for demand response. In addition, these comments
support Staff’s strategic vision for a stakeholder coalition envisioned in the Draft Plan to assist
the federal government in implementation of the final action plan, and suggest that it take shape
under a more formal organizational structure than discussed in the Draft Plan.

I. Background

Congress has required the Commission to develop a National Action Plan on Demand

Response (“National Action Plan”) in section 529 of the Energy Independence and Security Act

1 Draft for Comment of the National Action Plan on Demand Response (March 11, 2010), available at
http://www.ferc.gov/legal/staff-reports/03-12-10-demand-response.pdf

of 2007 (“EISA”), entitled “Electric Sector Demand Response.”2 To this end, the Commission
Staff issued a Discussion Draft on Possible Elements for the National Action Plan3 and held a
Technical Conference on November 19-20, 2009 to provide a framework for the public comment
and stakeholder input in developing the Draft Plan. The NYISO participated in the Technical
Conference, which provided the opportunity for many industry stakeholders to learn and share
the diverse perspectives on the issues addressed in Draft Plan. Staff has taken into account this
diversity in setting out its strategic vision in the Draft Plan. Staff’s vision calls for the formation
of a stakeholder Coalition that would assist the federal, state and local governments with the
implementation of three strategic activities: 1) provide technical assistance to the States; 2)
conduct a national communications program that encompasses broad-based customer education
and support; and 3) establish a platform for the development, enhancement and dissemination of
the tools, materials, methods and standards needed to assess the performance and impacts of
demand response programs. The NYISO fully supports these actions and the Commission’s
overall objective to maximize the effectiveness of demand response resources by enabling price-
responsive resources and facilitating market penetration of developing “smart grid” technologies
and programs.

II. Comments

NYISO supports the goals, strategies and actions set out by the Commission in the Draft
Plan in its efforts to craft an effective National Action Plan that realizes the potential for demand
response resources throughout the nation. Demand response resources continue to play an

2 Energy Independence and Security Act of 2007, Pub. L. No. 110‐140, § 529, 121 Stat. 1492, 1664 (2007) (to be codified at National Energy Conservation Policy Act, 42 U.S.C. §§ 8241, 8279).

3 Discussion Draft on Possible Elements for the National Action Plan (Oct. 2008), available at
http://www.ferc.gov/EventCalendar/Files/20091028124306‐AD09‐10‐000‐Discussion.pdf

important role in the NYISO markets. The NYISO offers two demand response programs that support system reliability: The Emergency Demand Response Program (“EDRP”) and the
Installed Capacity-Special Case Resource Program (“ICAP/SCR”). In addition, the NYISO has also established a Day-Ahead Demand Response Program (“DADRP”) and a Demand Side
Ancillary Services Program (“DSASP”) that allow demand response resources to participate in the NYISO’s ancillary services markets.

The NYISO fully supports the Draft Plan’s call for a coordinated communication and
outreach program to customers — and state and local governments — in support of the
deployment of emerging smart grid technologies for use in demand response programs. In
developing the NYISO’s demand response programs listed above, the NYISO held multiple
outreach meetings with Transmission Owners and potential demand response providers to
explain program benefits, administrative costs, and participation requirements. The NYISO has
also collaborated with the New York State Energy Research and Development Authority
(“NYSERDA”) to prepare primers and other communication materials that present the NYISO’s
demand response programs to New York consumers. The NYISO also works with the New
York State Public Service Commission and Transmission Owners to coordinate retail demand
response programs in New York with the existing NYISO-administered programs. In addition to
these efforts, the NYISO continually works with its own stakeholders at the Price Responsive
Load Working Group to support, refine and improve its demand response programs. As noted
below, the NYISO is also actively participating in several initiatives to develop the tools,
standards and infrastructure necessary to expand on market opportunities for demand response
resources.

A. Development of Standards for Demand Response

The NYISO believes in the paramount importance of standard, replicable methods and

protocols for the measurement and verification of demand response performance. Measurement
and verification is particularly critical when developing a customer’s energy consumption
baseline, which is needed to represent the load that would have been consumed absent a load
reduction triggered by a demand response program. Such standards and methods, however, must
allow for the wide variations in customer types and energy consumption patterns as well as
account for the interaction of both retail and wholesale demand response programs. These
standards also have to be developed to meet the reliability requirements of the grid operators and
be of comparable rigor to the performance measurement standards in place and applicable to
other energy suppliers participating in the competitive energy markets. While measurement and
verification standards development is a crucial component of the Draft Plan, the Commission
correctly points out that currently these methods vary significantly across the country.4 The
National Action Plan, however, must not dictate a single one-size-fits-all approach for standards
development. The Draft Plan correctly points out that a single message may not be applicable to
all customers or electricity stakeholders; instead the Draft Plan should establish a framework for
standards development that allows broad-based implementation as to each region’s specific
needs and technical requirements. A single, inflexible standard may not be applicable to all
customers or adequately serve the needs of the states or electricity stakeholders in the region. As
the Draft Plan points out: implementation should not be tied to a single edict, but “instead, it
should provide a framework of messages that universally appeals to customers, but which can be
employed in part or whole - as deemed appropriate by local demand response implementers - to

4 Draft Plan, p.67.

each region, state or locality.”5 This need to allow for flexibility in implementation is critical
with regard to developing measurement and verification standards and protocols.
The NYISO welcomes the consideration and attention the Commission has given to this subject in the Draft Plan as it continues to work with its stakeholders and industry groups to develop and evaluate the tools, methods and protocols that are needed to further support its
demand response resources and resolve the market, operational and reliability issues associated
with further growth and development of these resources in New York. Through the ISO/RTO
Council (“IRC”), the NYISO is involved with several standards development organizations that
are intent on developing technical standards for demand response resources. These include: 1)
the development of standards for the measurement and verification of demand response through
North American Energy Standards Board (“NAESB”) and continued participation in the Phase 2
efforts underway for measurement and verification; 2) participation in NIST Smart Grid
standards efforts through NAESB’s Smart Grid Task Force and Organization for the
Advancement of Structured Information Standards (“OASIS”) where standards for demand
response signals are being developed; and 3) the North American Electric Reliability
Corporation’s (“NERC”) Demand Response Data Task Force, where the NYISO is participating
in the development of the process and reporting mechanisms for NERC’s Demand Response
Availability Data System (“DADS”).

B. Formation, Leadership and Participation of a Coalition to Assist in the Implementation of the National Action Plan

The Draft Plan recommends the formation of a Coalition to assist the federal government

in implementing the National Action Plan because it will likely yield greater reach and depth

than would otherwise be accomplished by ad hoc stakeholder participation. The NYISO agrees.

5 Draft Plan, p.67.

The Coalition is an effective way to bring together the diverse group of industry stakeholders,
state and local regulators, and the end use consumer that will need to implement the National
Action Plan. Criteria for a successful Coalition are discussed in section 1.1 of the Draft Plan: 1)
clear goals; 2) a clearly organized structure; 3) good leadership; and 4) clear funding. This will
be a tall order considering the complexity of the electric industry, which is made more complex
by the local, state and regional variations in regulatory structure and market design. The NYISO
believes that a clearly organized structure and mission for the Coalition is critical to success, but
effective and transparent leadership is equally important. The Coalition leadership must be
representative of and be accountable to all stakeholders groups, whether they are defined by
region or state or by their role in the electric industry. However, a clear organizational structure
that welcomes volunteer participation and leadership will not be sufficient to address these
concerns adequately. The Coalition’s charter, by-laws and other governing documents must be
put in place to ensure that the goals and activities of the Coalition are transparent and represent
the needs and interests of the majority of the stakeholders.

While the Draft Plan proposes that the Coalition will be made up of volunteer

stakeholders it does not establish how the Coalition leadership will be selected. This process
needs to be established in advance and must ensure that the varied stakeholder interests are
represented in the Coalition’s leadership and governing processes. One organizational model
the NYISO recommends was recently employed for the National Institute of Standards and
Technology’s (“NIST”) Smart Grid Interoperability Panel (“SGIP”), a similar stakeholder panel
effort taking place to promote smart grid applications. The SGIP has a Governing Board that is
made up of industry representatives and other stakeholders that provides oversight and direction.

This would ensure that the leadership has the support of stakeholders when the activities and objectives of the Coalition are defined.

III. Communications and Correspondence

All communications and services in this proceeding should be directed to:

David Lawrence, Manager, Auxiliary Market Products

Robert E. Fernandez, General Counsel

Elaine D. Robinson, Director of Regulatory Affairs *David Allen, Attorney

New York Independent System Operator, Inc.

10 Krey Boulevard

Rensselaer, NY 12144
Tel: (518) 356-7656
Fax: (518) 356-8825
dlawrence@nyiso.com
rfernandez@nyiso.com
erobinson@nyiso.com
dallen@nyiso.com

* Persons designated for receipt of service.

IV. Conclusion

WHEREFORE, the New York Independent System Operator, Inc. respectfully requests that the Commission consider these comments and act or elect not to take action in accordance with the NYISO’s comments above.

Respectfully submitted,

/s/ David Allen

David Allen
Attorney

New York Independent System Operator, Inc.

CERTIFICATE OF SERVICE

I hereby certify that I have this day served the foregoing document upon each person

designated on the official service list compiled by the Secretary in this proceeding in accordance
with the requirements of Rule 2010 of the Rules of Practice and Procedure, 18 C.F.R.
§ 385.2010.

Dated at Rensselaer, NY this 8th day of April, 2010

By:/s/ Joy A. Zimberlin

Joy Zimberlin

New York Independent System Operator, Inc

10 Krey Blvd

Rensselaer, NY 12114 (518) 356-6207