NYISO Industrial Load Response Opportunities: Resource and Market Assessment — Task 2 Final Report

This report examines the ability of responsive loads to reduce energy costs and increase power system reliability by selling ancillary services (regulation, contingency reserves, and dynamic reactive support) to the power system while purchasing power to perform the basic functions the loads were designed to do. A basic understanding of power system ancillary services is provided including definitions and characteristics of each service. Preliminary examination of ancillary service prices in NY, Texas, California, and New England indicate that regulation prices are particularly attractive, and have been for years. Studying the hourly energy and ancillary service market prices provides a sound basis for determining the genuine value of response to the power system and the revenue responsive loads can likely capture. Load response is examined as it relates to power system needs in general and as it relates to the specific requirements of the power system operated by the New York Independent System Operator. The various current opportunities for load response within the New York Independent System Operator market structure are discussed. A modeling effort to determine the optimal mix of energy and ancillary service response capabilities for individual loads is outlined.