Major Questions for Creating Demand Bidding Programs (Potential Solutions Appear in Paper)

Western Interstate Energy Board

October 29-30, 2001

Seattle, WA

Todd Davis, SAIC

 

The Major Policy Questions

1.       Direction of state energy policy?  Short-term and long-term?

2.       Direction of wholesale and retail energy markets?

3.       Strengths and weaknesses of electric and gas markets?  Market synergies?

4.       Degree of imbalance between supply and demand?  What are the projected sources of new capacity, imports, IPP’s, hydro, etc.

5.       Wholesale and retail energy market price trends? What are the projected forward prices for new electric supply and how sensitive to gas prices and imports?

6.       Crisis vs. longer term mode of planning?

7.       How big is the demand reduction market?  What is needed:  capacity or energy?

8.       What is the size and potential of the market?

9.       How diverse is the market? 

10.   What has worked and not worked in other markets?

11.   What types of interruptible programs should be considered?  Demand bidding, RTP, TOU prices or multiple pricing strategies?

12.   What is the state’s metering policies and programs?  Do they create barriers and opportunities?

13.   Who should participate in developing the program? 

14.   What steps should PUC’s take in considering demand bidding and RTP?

15.   What rules and regulations are needed? 

16.   What should constitute key rulemaking provisions for supporting demand bidding programs?  Simply tariff change? 

17.   Reporting and monitoring provisions?

18.   How should the PUC, regional ISO and power purchasers interact?

 

Major Tactical Marketing Questions

 

  1. Develop standard program designs
  2. Create a program development schedule
  3. Create draft program design
    1. Define program objectives
    2. How many programs?
  4. Define who should participate in program design and development – suggest collaborative.
  5. Define pricing period length, blocks with periods and price levels
  6. Define minimum bid requirements
  7. Flow chart program
  8. Define bid submission time, review time and acceptance and rejection notice times
  9. Identify inspection and verification requirements
  10. Consider penalties
  11. Develop administrative and processing requirements
  12. Address price disclosure issue
  13. Identify role of third party aggregators
  14. Develop field test protocol of bid submission, approval and verification
  15. Identify customer and sales agent training and sales and marketing programs.
  16. Identify evaluation protocol
  17. Estimate program costs
  18. Complete program cost and benefit analysis pre implementation.
  19. Conduct hearings
  20. Approve final rate design.