A Case Study Review of Technical and Technological Issues for Transition of a Utility Load Management Program to Provide System Reliability Resources in Restructured Electricity Markets

Utility load management programs—including direct load control and interruptible load programs—were employed by utilities in the past as system reliability resources. With electricity industry restructuring, the context for these programs has changed; the market that was once controlled by vertically integrated utilities has become competitive, raising the question: can existing load management programs be modified so that they can effectively participate in competitive energy markets? In the short run, modified and/or improved operation of load management programs may be the most effective form of demand-side response available to the electricity system today. However, in light of recent technological advances in metering, communication, and load control, utility load management programs must be carefully reviewed in order to determine appropriate investments to support this transition.

This report investigates he feasibility of and options for modifying an existing utility load management system so that it might provide reliability services (i.e. ancillary services) in the competitive markets that have resulted from electricity industry restructuring. The report is a case study of Southern California Edison's (SCE) load management programs. SCE was chosen because it operates one of the largest load management programs in the country and it operates them within a competitive wholesale electricity market. The report describes a wide range of existing and soon-to-be-available communication, control, and metering technologies that could be used to facilitate the evolution of SCE's load management programs and systems to provision of reliability services. The fundamental finding of this report is that, with modifications, SCE's load management infrastructure could be transitioned to provide critical ancillary services in competitive electricity markets, employing currently or soon-to-be available load control technologies.