This document addresses the business objectives and context for standardizing control and pricing signals for Demand Response (DR) and Distributed Energy Resources (DER) as part of the Smart Grid implementation, which is called for by NIST Priority Action Plan 03 and 09.  The NAESB Smart Grid Task Force and UCAIug OpenSG task forces took the responsibility of consolidating and developing DR use cases that provide requirements for developing DR control and pricing signal standards.  The first step of use case development is this Framework for Integrated DR and DER Models that provides an overall business context.

The key subjects and findings of this document are:

1. DR signals standardization must support all four market conditions, i.e. regions with or without either wholesale or retail open competition.  It must also consider key differences that exist and will continue to exist in all four market types.
2. Wholesale market DR and pricing signals have different characteristic than retail market DR and pricing signals, although commonality in format may be developed.
3. Most customers (with a few exception of C&I customers) will not interact directly with wholesale market when it comes to DR and Pricing signals.
4. Retail pricing models is complex due to the large variety of tariff rate structures that exist in both regulated and un-regulated markets.  Attempts to standardize DR control and pricing signals must not hinder regulatory changes or market innovations when it comes to future tariff or pricing models.
5. New business entities (Energy Service Providers, Curtailment Service Providers (DR Aggregators), Energy Information Service Providers) will play an increasing role in DR implementation.
6. DER will play an increasingly important role in DR, yet tariff and/or pricing models that support DER’s role in DR are still in its infancy.
7. Customer’s perspective and ability to react to DR control and pricing signals must be a key driver to the development of DR standards.

Overall, this framework document provides the necessary business context and reference architecture for the on-going standards development effort around Demand Response.

  smart_grid_ssd100109w1.doc