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AEICLoadResearchCommittee
DemandResponse
Measurement&
Verification
ApplicationsforLoadResearch
March2009









Demand Response Measurement & Verification
Acknowledgements
TheAEICLoadResearchCommitteewouldliketoacknowledgethecontributionsoftheauthorsofthis
paper: PhilipBartholomew,OklahomaGas&Electric;WayneCallender,CPSEnergy;CherylHindes,
BaltimoreGas&Electric;CliffordGrimm,DTEEnergy;KathyJohnson,DominionVirginiaPower;Mary
Straub,BaltimoreGas&Electric;DaveWilliams,GulfPowerCompany;andMarkWilliamson,DTE
Energy;andrecognizetheassistanceofDebbieHayes,DTEEnergy;WilburJohnson,AlabamaPower
Company;BillyNix,SouthernCompany;JoeLynch,SouthCarolinaElectric&GasCompany;andSusan
Romer,NSTAR.
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Demand Response Measurement & Verification


TableofContents
1 Introduction.....................................................................................................................................5
1.1 DemandSideManagement(DSM).....................................................................................5
EnergyEfficiency(EE)...................................................................................................5
DemandResponse(DR)................................................................................................6
IndividualBasedPrograms...........................................................................................6
MassMarket.................................................................................................................6
EventBased(Dispatchable)..........................................................................................6
NonEventBased(NonDispatchable)..........................................................................6
1.2 DemandResponsePrograms..............................................................................................7
TimeofUse(TOU).......................................................................................................7
DirectLoadControl(DLC) .............................................................................................7
CriticalPeakPricing(CPP).............................................................................................7
PeakTimeRebate(PTR)...............................................................................................8
RealTimePricing(RTP).................................................................................................9
1.3 KeyDriverstoDemandResponse(Dispatchablevs.NonDispatchable)...........................9
1.4 DemandResponseMeasurementandVerification(M&V)..............................................10
1.5 IdentifyStakeholders ........................................................................................................11
2 IndividualMeasurement(ImpactEstimation).............................................................................12
2.1 IntroductiontoMeasurementofIndividualCustomers...................................................12
2.2 BaselineMethodologies...................................................................................................13
DayMatching.............................................................................................................13
PreviousDaysApproach.............................................................................................14
AverageDailyEnergyUsageApproach......................................................................15
ProxyDayApproach...................................................................................................16
2.3 BaselineAdjustment .........................................................................................................16
2.4 RegressionMethods.........................................................................................................17
IndividualCustomerRegressionBaseline..................................................................17
PooledBaselineRegressionAnalysis..........................................................................18
2.5 EngineeringAlgorithms.....................................................................................................19
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Demand Response Measurement & Verification


3 MassMarketMeasurement(ImpactEstimation) ........................................................................20
3.1 DevelopmentofCBLProfiles............................................................................................20
UsingaControlGrouptoDevelopaCBL....................................................................21
LeveragingExistingLoadResearchSamples..............................................................21
ComparisonTechniques.............................................................................................22
PercentShiftfromPeakPeriod(AverageDemand) ................................................... 22
AverageHourlyVariationEvaluation(DemandEstimation)......................................23
DevelopingCBLsfromEstimationofParticipantsResponse....................................23
UsingbothControlGroupandCustomerTimeSeriesData......................................24
3.2 DiscussionontheEffectsofIndividualCustomersonMassMarketResults...................24
Ensurethemetersanalyzedbelongtothepopulationbeingestimated...................24
Knowwhichcustomerschoosenottoparticipateinanevent.................................. 24
Ensureallavailableinformationisused.....................................................................24
3.3 OperabilityStudies............................................................................................................25
4 Conclusion.....................................................................................................................................26
5 Glossary.........................................................................................................................................27
6 Acronyms.......................................................................................................................................29
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Demand Response Measurement & Verification
WhitePaperFocus
TheprimaryfocusofthispaperistostandardizeterminologyusedinassociationwithDemandResponse
andMeasurementandVerificationasitappliestoLoadResearchpractices. Inaddition,thispaperwill
defineandcontrastthevariousmethodologiesusedinboththeMeasurement(impactevaluation)and
VerificationprocessofdemandresponseincludingthedevelopmentandapplicationofBaselines. This
paperdealsexclusivelywiththemeasurementofdemandreduction(kW)achievedbyDemand
Responseprograms,andwhilerecognizingthatdemandresponsemayreducebothdemandandenergy,
makesnoattempttodescribe/definemeasurementreductionsinenergy(kWh)attributedtoeither
DemandResponseorEnergyEfficiencyprograms.
TheauthorshighlightanddiscussmanyofthemoreprominentDemandResponseprogramscurrentlyin
usebutmakenoattempttodescribeordiscussallexistingorpotentialprogramsthatmayreducepeak
demand. Theprogramsusedthroughoutthispaperareusedtohelpdefinebroadgroupingsof
programsandtheMeasurementandVerificationmethodsthatapplytothesegroupings.
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Demand Response Measurement & Verification
1 Introduction
1.1 DemandSideManagement(DSM)
Intheelectricindustry,thetermDemandSideManagement(DSM)referstoprogramsthatattemptto
influencecustomerconsumptionpatternsofelectricitytomatchcurrentorprojectedcapabilitiesofthe
powersupplysystem(adaptedfrom:AEICLoadResearchManual). DSMconsistsoftwomajor
components:DemandResponse(DR)andEnergyEfficiency(EE),whichisalsoreferredtoas
conservation.
Figure1.1ComponentsofDSM
EnergyEfficiency(EE)
AccordingtotheNationalActionPlanforEnergyEfficiencypublishedbyU.S.DepartmentofEnergy
andEnvironmentalProtectionAgency(EPA),EnergyEfficiency(EE)referstousinglessenergytoprovide
thesameorimprovedlevelofservicetotheenergyconsumerinaneconomicallyefficientway. The
termEnergyEfficiencyasusedhereincludesusinglessenergyatanytime,includingattimesofpeak
demandthroughDemandResponseandpeakshavingefforts.
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Demand Response Measurement & Verification
DemandResponse(DR)
ThedefinitionofDemandResponse(DR)asusedbytheU.S.DepartmentofEnergy(DOE)initsFebruary
2006reporttoCongressandsubsequentlyadoptedbytheFederalEnergyRegulatoryCommission
(FERC)isstatedas:
Changesinelectricusagebyendusecustomersfromtheirnormalconsumptionpatternsinresponseto
changesinthepriceofelectricityovertime,ortoincentivepaymentsdesignedtoinducelowerelectricity
useattimeofhighwholesalemarketpricesorwhensystemreliabilityisjeopardized.
ThispaperwilladdressanddiscusssomeofthemoreprominentDemandResponseprogramscurrently
inusewithintheUnitedStates. Theprogramsdiscusseddonotcompriseanexhaustivelistofthe
programsortypesofprogramscurrentlyinuse,orbeingdesigned,butwillservetohelpdefine
groupingsofprogramsandapplicablemeasurementandverificationmethods.
IndividualBasedPrograms
ForthepurposesofthispaperindividualbasedDemandResponseprogramsreferstoprogramsthat
empowercustomerstomaketheultimatedecisionsonwhen,andtowhatamount,theywillcurtail
usage. CriticalPeakPricing(CPP)andRealTimePricing(RTP)areexamplesofindividualbasedDemand
Responseprograms.
MassMarket
MassmarketDemandResponseprogramstypicallyrefertoprogramsthatareofferedwiththesame
tariff/incentivecharacteristicstoalargesetofrelativelyhomogeneouscustomerssuchastheresidential
Class,allTimeofUse(TOU)commercialcustomers,orallresidentialcustomerswithcentralair
conditioning. ExamplesofmassmarketDemandResponseprogramsincludeInterruptibleAir
ConditioningDirectLoadControlprograms,TimeofUseratesandRealTimePricing(ifitisarateclass
tariff).
EventBased(Dispatchable)
Demandresponseprogramsthathavethecapabilitytorespondtoemergencyreliabilityeventsand/or
peakloadreductioneventsareEventBasedprograms. Typically,EventBasedprogramsqualifyas
dispatchablepowerresourcesbecausetheyareachievable,reliable,verifiableandcapableof
respondingwithinISO/RTO(ISOisIndependentSystemOperator,RTOisRegionalTransmission
Organization)timeguidelines. DirectLoadControl(DLC),callableDemandResponseprogramsand
measurableCriticalPeakPricingprogramsareeventbased.
NonEventBased(NonDispatchable)
DemandResponseprogramsthatareeconomicbasedorprovideloadreductionsthatarenot
necessarilyavailableduringsystempeakhoursareNonEventBasedprograms. Thesetypeprograms
arealsoconsiderednondispatchablebecausetheyarenotdeemedasreliableorverifiableduring
systempeakloadingperiods. ProgramssuchasTimeofUse(TOU)andRealTimePricing(RTP)thatare
difficulttoascertainhourlycustomerparticipationvaluesareexamplesofNonEventBasedprograms.
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Demand Response Measurement & Verification
1.2 DemandResponsePrograms
DemandResponse(DR)programsarecontinuouslygrowingandevolving. Severalofthemoretypical
programshavebeenmentionedabove. Thissectionwillexpandontheseexamplestogivethereadera
betterunderstandingofeachprogramsgoalsandchallenges.
TimeofUse(TOU)
TimeofUse(TOU)tariffsareDRprogramsthatsegmenteachbillingmonthintosmallerhourlywindows
eachwithaseparatepricinglevelrelatedtoproductioncosts. Participantsareprovidedpricesignalsto
reduceloadduringhighercosthours. ThesimplestformofaTOUtariffsegmentsadayintotwo
productioncostsegments(usuallyreferredtoasonpeakandoffpeakhours). Forexample,aLoad
ServingEntity(LSE)maysegmentallweekdaysas:Onpeakhoursequalto1:01pmthrough6:00pm
(inclusive)andallotherhours,includingweekends,asoffpeak. Furthersegmentationmayinclude
seasonalrates.
DirectLoadControl(DLC)
DirectLoadControl(DLC)programsaredesignedtoreduceloadduringextremeevents(e.g.high
productioncosts,systemreliability,etc.). Participantsreceivesubstantialcreditsfordecreasing
(shedding)loadwhenaneventisinitiatedbytheLSE. SomeDLCprogramsprovidetheLSEwithdirect
controloversheddingcustomerloads(i.e.airconditioningcyclingorsetbackprograms). Other
programsallowtheparticipanttochoosehowtheywillshedload(i.e.interruptibleorloadcurtailment
programs). Penaltiesareusuallyassessedfornonperformance.
CriticalPeakPricing(CPP)
CriticalPeakPricing(CPP)tariffsareoftendesignedwithtwostandardTOUperiods(onpeakhoursand
offpeakhours)andathirdoptionalcriticalpeakperiod. Typically,thetwostandardTOUperiodshave
specifictimeframesandprices. ThethirdcriticalpeakTOUperiodisafloatingtimeframe(anevent)
whichmayormaynotbeineffectonanygivenday. AdvancenotificationbyanLSEsintentiontocalla
CPPeventistypicallygiven(upto24hours).
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Demand Response Measurement & Verification
Figure1.2TOUwithCriticalPeakPricingPeriod
WhentheLSEinitiatesaCPPevent,customersreceivesignalsindicatingtheexpectedenergypricesfor
thenextday. Pricesignalscanbeassimpleasrelativepricelevels(low,medium,high)orspecific
(tomorrowsCPPpricewillbe$0.435). CustomersonCPPtariffsreceivediscountedonpeakandoff
peakpricingastariffincentivescreatingtheopportunityforcustomerstoreducetheirenergycosts.
However,muchofthesecostsavingsdisappearifacustomerdoesnotreduceconsumptionduringCPP
eventsasstipulatedinthesetariffs.
PeakTimeRebate(PTR)
PeakTimeRebate(PTR)programsofferrebatestocustomerswhouselesselectricityduringcriticalpeak
events. SimilartoCPP,ifsucheventsareplanned,advancednoticecanbeprovided. Inaddition,some
eventsmayoccuronanemergencybasis,withcustomernotificationgivenshortlybefore,oratthe
initiationoftheevent. PTRcustomersmayremainonatraditionalflatrateorTOUtariff. Duringa
criticalevent,customerdemandmustbecomparedtobaselineusagetodeterminetheamountof
hourlykWreduction. Forexample,ifacriticalpeakperiodisplannedonagivenweekdaybetweenthe
hoursof2and7p.m.,customersmaybenotifiedthepreviousday. Thecustomersactualhourly
demand(kW)duringtheeventwouldbecomparedtobaselinedemandforthesamehours. The
customerwouldbepaidarebatebasedontheamountofdemandreduction. Customersmayhavethe
optionofobtainingenablingdevices,suchassmartswitchesorthermostatsorinhomedisplays,tohelp
themsaveduringcriticalevents.
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Demand Response Measurement & Verification


RealTimePricing(RTP)
RealTimePricing(RTP)istypicallyanhourlymarketbasedpricingDRprogramwithoutspecificdemand
responseeventscalledbyLSEs. ThebasictenetofRTPisthatpricewilldetermineusageandthatthe
priceelasticitywithinthemarketwilldrivecustomerbehaviortoreduceload.Pricespaidforenergy
consumedaretypicallyestablishedandmadeavailabletocustomersadayahead(dayaheadpricing)or
anhourahead(houraheadpricing)permittingcustomerstheopportunitytovarydemandandenergy
useinresponsetoprice. Participantsareassignedabaselineloadshape(sometimesknownasa
CustomerBaselineorCBL). IfthecustomerusesmoreenergyinanyhourthantheirCBLforthathour,
thenthecustomerischargedforenergyatthathoursmarketprice. Theconverseisalsotrue. Ifthe
customeruseslessenergyinthathourtheLSEwillcreditthecustomerforenergynotused. Itshouldbe
notedthatsomeLSEsseteveryparticipatingcustomersCBLtozerousage(aonepartRTPprogram). In
thiscase,nocreditsaregivensincethereisnoCBL. Othermarketbasedratesmayalsobeapplied.
1.3 KeyDriverstoDemandResponse(Dispatchablevs.NonDispatchable)
AkeydriverformanyLSEsisdeterminingifaDRprogramisconsidereddispatchable. AdispatchableDR
programwillhaveaonetimeeffectontheLSEssystemloadshape. Ananalogycanbemadethat
dispatchableDRprogramsarelikeaBigRedButtonthatLSEscaninitiate(anevent)todecreasesystem
demandinarelativelyshorttimeframe. Dispatchableprogramsaregenerallyregardedasprograms
thatreducedemandwithahighdegreeofcertainty.
1
DRprogramsnotdesignedtoaltertheshortterm
systemloadshapearedeemednondispatchable.
CertaindispatchableDRprograms,likeDirectLoadControl(DLC),canquicklydecreasethesystemload
shape. Theseprogramsareespeciallyefficientwhenunexpectedreliabilityorhighcostanomaliesoccur
duetoforcedoutagesorweather. TheireffectissimilartoanLSErampingupspinningreserveor
peakergeneration.
Otherdispatchableprogramswillalterasystemloadshapebutnotasquickly. Forexample,RTPand
CPPprogramstypicallyprovidepricesignalsupto24hoursinadvanceofwhentheyaretotakeeffect.
Therelationshipbetweenpriceandcustomerloadscanbeestimated. Theseestimatesareusedby
generationplannerswhenpreparingthenextdaysdispatchmodel.
Lastly,nondispatchableprogramslikeTOUaretypicallydesignedyearsinadvanceandprovide
historicaldatathatpermitstherelationshipbetweentheTOUpricesandcustomerloadstobe
estimated. However,theseprogramsrarelyaffectshorttermdispatch. Thesetariffsaremorelikelyto
changeannualsystempeakgrowthratesascustomerschangetheirbehaviorsdecreasingtheironpeak
usagehabits.
RegardlessofthetypeofDRprogramemployed(dispatchablevs.nondispatchable)allrequireanalysis
toestimatethedemandreduction. Theestimateisthedifferencebetweenwhatthecustomeractually
usedandwhatthatcustomerwouldhaveusedhadtheprogramnotbeenenacted. Whatthecustomer
wouldhaveusedisreferredtoasthebaselineandiskeytoeffectiveMeasurementandVerification.
1
NERC (NorthAmericanElectricReliabilityCorporation,DataCollectionforDemandSideManagement,
December2007
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Demand Response Measurement & Verification


Baselinegenerationisanevolvingprocesswithalimitingfactorbeingdataavailability. Althoughmany
ofthecurrentandmostwidelyacceptedbaselinegenerationprocessesarediscussedinthiswhite
paper,newmethodsofestablishingbaselinesandmeasuringtheiraccuracieswillcontinuetogrowas
DemandResponseevolvesutilizingtheadvancedtechnologiesthatwillbeenabledbyAdvanced
MeteringInfrastructure(AMI).
1.4 DemandResponseMeasurementandVerification(M&V)
MeasurementandVerification(M&V)referstotheapplicationofappropriatestatisticalandload
researchtechniquestomeasureandverifytheloadreductionimpactresultingfromtheutilizationofa
DemandResponseprogram. Simplystated,M&Visaprocesstoquantify,withstatisticalconfidence,the
valueofaDemandResponseloadreductionthroughoutthedurationofaDemandResponseevent.
Eventsmaylastforoneormorehours;themeasurementtypicallyquantifiestheentireeventperiod,
andmayalsoquantifythereductionduringthepeakhour. MeasurementcanbereportedinMW,
hourlykW,peakkW,etc.andmayfurtherbereportedinavarietyofintervalsincluding15,30,60
minuteandtotaleventduration. MeasurementquantifiesthisloadreductionandVerificationprovides
evidencethatthereductionisreliable.
Figure1.3M&VQuantifiesLoadReductionValue
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Demand Response Measurement & Verification
1.5 IdentifyStakeholders
Stakeholdersarepartieswhohaveeitheraloadreduction,ormonetaryinterest,inthemeasured
demandreductions. Stakeholdersinclude:
Regulatorsandpolicymakers: bothstatePublicUtilityCommission(PUC)and
federal(FERCandDOE)levels
Aggregators
Interveners
Stateandlocalagencies(AttorneyGeneral/municipalities)
SystemOperators:utilityorISO/RTO
Utilitymanagement
Programadministrators
Thirdpartyprogramproviders,vendors,consultants
Customers
Generation,transmission,anddistributionplanners
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Demand Response Measurement & Verification


2 IndividualMeasurement(ImpactEstimation)
2.1 IntroductiontoMeasurementofIndividualCustomers
DRprogramsoffercustomerstheopportunitytoreducedemandinresponsetoapricesignalor
financialincentive. Typically,therequesttoreducedemandismadeforaspecifictimeperiodona
specificday,whichisreferredtoasaDemandResponseevent(DRevent). ADReventisdefinedas,
Thetimeperiods,deadlinesandtransitionsduringwhichDemandResourcesperform.
2
ThefigurebelowdepictstheperiodsofaDRevent. ItalsodescribespointsduringtheDReventwhere
thecustomerreceivesnotificationofthebeginningandendoftheeventandillustratesthepointat
whichacustomershouldtakeaction.
Figure2.1 DemandResponseEventPeriods
Source:NewYorkIndependentSystemOperator
TheprocesstomeasuretheloadreductionwhenDemandResourcesperformbeginswithcollectingor
calculatingthefollowingtwokeycomponents:
Baseline(CBL)Theamountofenergythecustomerwouldhaveconsumedabsentasignaltoreduce.
Thishourlyusagecurve(Figure2.2)iscreatedusingmethodologiesexplainedlaterinthissection.
ActualUseTheamountofenergythecustomeractuallyconsumedduringtheDReventperiod.
LoadReduction ThemathematicaldifferencebetweentheBaselineandtheActualUse.
BaselineActualUse=LoadReduction
2
BusinessPracticesforaFrameworkforMeasurementandVerificationofWholesaleElectricityDemand
Response,ProposedStandardsapprovedbytheNAESBDSMEESubcommitteeforQuadrantWEQ,December2,
12
2008









Demand Response Measurement & Verification
Figure2.2 BaselineExample
Source:NewYorkIndependentSystemOperator
ManyDRprogramsbaseincentivesonwhetheracustomercurtailedduringtheDReventandifso,how
muchtheycurtailed. Thecalculationofthebaselineisacriticalpieceoftheseparticularprograms. If
thebaselineforacustomeriscalculatedtoohigh,theelectricutilitywillpayincentivesinexcessofthe
customerresponse. Ifthebaselineistoolow,lessornoloadreductionwillberecordedwhichcanlead
tocustomernonparticipationinfutureDRevents. Itmayalsoeliminateincentivestoparticipate,
resultinginacustomerrequestingtoberemovedfromtheDemandResponseprogram. Therefore,itis
inthebestinterestofboththeutilitiesandthecustomerstohaveasaccurateabaselineestimationas
possible.
2.2 BaselineMethodologies
Twocommontechniquesforcalculatingbaselinesaredaymatchingandregressionanalysis. Day
matchingattemptstoselectabaselinedaythatmostaccuratelymatchestheDReventday. Regression
analysissimplyinvolvesusingstatisticalregressionmethodstocreateamodel.
DayMatching
Daymatchingconsistsoftakingashorthistoricaltimeperiod(whichcanbeanywherefromoneweekto
sixtydaysinlength)andattemptingtomatchwhattheusageforaneventdaywouldhavebeenbased
ontheusageduringthehistoricalperiodchosen. Thisusuallyinvolveschoosingasubsetofdaysfrom
thehistoricalperiodandaveragingthem,oftenwithanadjustmentforthecurrentdaysconditions
appliedtothecalculatedbaseline. Forexample,iftheDReventdayoccursonaweekday,hourlydata
fromweekdaysareusedinthecalculationofthebaseline. Thefollowingapproachesareexamplesof
specificusesofdaymatching.
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Demand Response Measurement & Verification
PreviousDaysApproach
3,4
ThisapproachcalculatesabaselineforaDReventdaybyaveraginghourlyloaddatausingasubsetof
daysfromahistoricalperiod
5
. Thesmallsubsetofdaysandthehistoricaldaysarethesametypeofday
astheDReventdaysuchasaweekdayorweekend. Thisresultsinabaselineloadcurveofaverage
hourlyvaluescalculatedfromacustomerspreviousactualuse. InFigure2.3below,threeequivalent
dayspriortotheDReventdayareselectedtobeaveragedtogethertocreateabaseline.
Figure2.3 PreviousDayApproachExample
Hour
DaysAveragedtoCreateBaseline Hourly
Baseline Day1 Day2 Day3
1 1.81 1.20 1.14 1.38
2 1.64 1.08 0.98 1.23
3 1.49 0.97 0.92 1.13
4 1.41 0.91 0.88 1.07
5 1.34 0.93 0.83 1.03
6 1.30 0.96 0.83 1.03
7 1.29 1.02 0.89 1.07
8 1.45 1.05 1.04 1.18
9 1.53 1.10 0.99 1.21
10 1.59 1.31 1.09 1.33
11 1.75 1.52 1.10 1.46
12 1.86 1.58 1.14 1.52
13 2.06 1.83 1.23 1.71
14 2.11 1.98 1.39 1.83
15 2.21 2.16 1.47 1.95
16 2.29 2.22 1.62 2.04
17 2.30 2.25 1.76 2.11
18 2.41 2.37 1.75 2.17
19 2.41 2.43 1.89 2.24
20 2.29 2.24 1.75 2.09
21 2.26 2.24 1.71 2.07
22 2.37 2.34 1.71 2.14
23 2.27 2.24 1.65 2.05
24 1.99 1.88 1.45 1.77
Hourlybaseline=AverageofDay1,Day2,Day3
3
CAISODemandResponseResourceUserGuide,GuidetoParticipationinMRTURelease1,November29,2007,
Version3.0
4
ISONewEnglandManualforMeasurementandVerificationofDemandReductionValuefromDemandresource,
MMVDR,Revision:0,February28,2007
5
ISONewEngland(ISONE)usesfiveequivalentdayspriortoaDReventdayintheirbaselinecalculationwhile
CaliforniaISO(CAISO)usesthreeequivalentdayspriortoaDReventday. ThenumberofdaysusedbybothISONE
andCAISOarespecifictotheirserviceterritoriesandnotnecessarilytranslatabletootherserviceterritories.An
analysisspecifictoaparticularserviceareashouldbecompletedtodeterminetheoptimumnumberofdays
neededinabaselinemethodology.
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Demand Response Measurement & Verification
AverageDailyEnergyUsageApproach
6,7
Thisapproachusesdailyenergy(thesumofthe24hourlyenergyvaluesforaday)tochoosewhichdays
areincludedinthebaselinecalculation. Suitabledaysareselectedbasedontheirdailyenergybeing
comparable(75%orgreater)tothedailyenergyofaselectedday,priortotheDReventday. The
selecteddayischosenbecause;a),itisthemostrecentnonDReventdayand,b)itisthesametypeof
dayastheDReventday. Additionally,adailyenergyratioiscalculatedbycomparingthedailyenergy
ofthesuitabledaystothedailyenergyoftheselecteddaypriortotheDRevent. Inthefollowing
example(Figures2.4and2.5),thebaselineiscreated,similartoPJMandNYISOmethods,byaveraging
thefivehighestratiodailyenergydays.
Figure2.4 AverageDailyEnergyUsageApproachExample
Acceptable
Date DayOfWeek DailyEnergy Ratio Day
7/31/2006 Monday 39.792 1.307 Yes
7/28/2006 Friday 31.226 1.026 Yes
7/27/2006 Thursday 30.511 1.002 Yes
7/26/2006 Wednesday 30.647 1.007 Yes
7/25/2006 Tuesday 29.899 0.982 Yes
7/21/2006 Friday 28.995 0.952 Yes
7/20/2006 Thursday 29.373 0.965 Yes
7/19/2006 Wednesday 28.798 0.946 Yes
7/18/2006 Tuesday 32.707 1.074 Yes
7/17/2006 Monday 40.264 1.323 Yes
Average 32.221
SelectedDay 30.445
6
NYISODayAheadDemandResponseProgramManual,July2003
7
AmendedandRestatedOperatingAgreementofPJMInterconnection,L.L.C.
15







Demand Response Measurement & Verification
Figure2.5 AverageDailyEnergyUsageApproachExample
Hour
DaysAveragedtoCreateBaseline Hourly
Baseline 07/17/06 07/31/06 07/18/06 07/28/06 07/26/06
1 1.49 1.20 1.34 1.14 1.12 1.26
2 1.46 1.08 1.18 0.98 1.01 1.14
3 1.29 0.97 1.07 0.92 0.95 1.04
4 1.21 0.91 1.00 0.88 0.87 0.97
5 1.11 0.93 0.97 0.83 0.86 0.94
6 1.08 0.96 0.97 0.83 0.88 0.95
7 1.10 1.02 1.02 0.89 0.90 0.99
8 1.18 1.05 1.06 1.04 1.03 1.07
9 1.29 1.10 0.99 0.99 1.15 1.10
10 1.46 1.31 1.12 1.09 1.26 1.25
11 1.61 1.52 1.22 1.10 1.24 1.34
12 1.65 1.58 1.23 1.14 1.33 1.39
13 1.68 1.83 1.39 1.23 1.40 1.51
14 1.94 1.98 1.63 1.39 1.50 1.69
15 2.00 2.16 1.62 1.47 1.50 1.75
16 2.01 2.22 1.74 1.62 1.50 1.82
17 2.02 2.25 1.80 1.76 1.63 1.89
18 2.23 2.37 1.80 1.75 1.66 1.96
19 2.22 2.43 1.87 1.89 1.68 2.02
20 2.29 2.24 1.82 1.75 1.56 1.93
21 2.03 2.24 1.60 1.71 1.42 1.80
22 2.18 2.34 1.59 1.71 1.55 1.87
23 2.07 2.24 1.46 1.65 1.45 1.77
24 1.64 1.88 1.22 1.45 1.23 1.48
Hourlybaseline=AverageofDay1,Day2,Day3,Day4,Day5
ProxyDayApproach
Theproxydayapproachselectsthehourlyloadsofasingledaytorepresentacustomershourlyloads
onaDReventday. AproxydayisonethathasthesamecharacteristicsasaDReventday.
Characteristicstypicallyusedtoselectaproxydayincludemaximumtemperature,dayofweek,
weekdayvs.weekend,etc. Mostmethodscurrentlyinuselimitthetimeperiodthatmaybeconsidered
whenselectingtheproxyday.
2.3 BaselineAdjustment
Anadjustmenttothecalculatedbaselinemightbeneededtofactorintheweathereffectsona
customersloadontheDReventday. Thisadjustmentconsistsofdeterminingthedifferencebetween
thecalculatedbaselineandtheactualcustomerloadduringtherampperiodoftheDReventday(Figure
2.6). Theadjustmentvalueismathematicallydeterminedandappliedtothecalculatedbaselineduring
thehoursofthedeploymentperiodoftheDRevent.
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Demand Response Measurement & Verification
Figure2.6 BaselineAdjustmentExample
ExampleofaWeatherSensitiveCustomerModeled
Better withaTemperatureAdjustment
600
550
500
450
400
350
300
8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
k
W

Hour
Baseline Baselinew/TempAdj CustomerUsage
2.4 RegressionMethods
Anothermethodologyistouseregressionmethods
8
tocreateamodeltorepresentthecustomersload
shapeonaneventday. Thedevelopmentofthebaselinecouldbeaccomplishedintwoways. Thefirst
istoincludeonlynoneventdaydataforanindividualcustomer,andtheotheristouseapooleddata
seriesthatdistinguishesbetweeneventandnoneventdays.
IndividualCustomerRegressionBaseline
Peakperiodenergymodel:Ifintervalmeteringisunavailable,amodelcanbespecifiedthatusespeak
periodenergyasafunctionofcoolingdegrees. HourlykWisderivedbyapplyinganaveragehotday
loadshapetotheresultant. Thespecifiedenergymodelmaybeoftheform:
kWh=
0
+
1
*CoolingDegreeDays;
Hourlydemandmodel:Whenintervalmeteringisavailable,ademandmodelcanbespecified. Oneform
ofthemodeluseshourlydemandasafunctionofcoolingdegreehours.
kW=
0
+
1
*CoolingDegreeHours
Tothenestimatetheenergyordemandbaseline,theweatherconditionsoftheeventdaywouldbe
multipliedbytheresultingparameters.
8
SeeAEICLoadResearchManual,SecondEdition,page712formoreinformationonthistopic.
17
















Demand Response Measurement & Verification
PooledBaselineRegressionAnalysis
Formassmarketprograms,intervaldatamaynotbeavailableformostcustomers. Todevelopa
baselineforthistypeofsituation,arandomsampleofprogramparticipantsmustberecruited,metering
installed,andthedataforthesampleisusedtorepresentthepopulation. Amodelisthenspecifiedthat
includesmeteringdataforeachmeteredcustomeranddataforeventandnoneventdays.
Anexampleofsuchasituationcouldbedefinedasfollows:
n1 n1
(1) kW
it
=
0
+

i Custi +
1
Wthi
t
+
2
Cycle
it
+

iCusti * Cycleit +
3
Wthi
t
*Cycle
it
+
it
i=1 i=1
Where: kW
it
=thevalueofthedependentvariableforcustomeriathourt;
Cust
i
=Indicatorvariablesforeachoftheparticipantsand,1forcustomeri,0otherwise;
Wthi
t
=Theweightedtemperaturehumidityindexcalculatedhourly
9
;
Cycle
it
=Indicatorvariablethatis1ifhalfhourisbeingcycled,0otherwise;and,

it
=arandomerrortermforcustomeriathourt.
Thedependentvariableinthisanalysisconsistsofintegrateddemandrecordedduringeachofthehalf
hours. TheparametersfromEquation(1)areusedtoestimatereductionsinhourlydemand.
Reductionsaredefinedastheestimatedusageonnoneventdaysminusestimatedusageoneventdays.
BasedonEquation(1),theaveragebaselinedaycanbeexpressedeitheras:
n1
(2) Baseline
t
=(
0
+

i n

+
1
Wthi
t
).
i =1
Andtheaveragepercustomerreductioninhourlydemandcanbeexpressedas:
n1
(2) Reduction
it
= (
2
+

i n

+
3
Wthi
t
).
i =1
Tothenestimatethedemandbaselineordemandreduction,theweatherconditionsofthedayof
interestwouldbemultipliedbytheresultingparameters.
9
HourlywetbulbanddrybulbtemperaturereadingswereobtainedfromtheNationalWeatherService. These
data are used to produce a halfhourly weighted temperature and humidity index (WTHI). This measure of
weathertakesaccountofboththedrybulbtemperatureandthehumidityconditionscontemporaneouswiththe
hourly period under examination, and also takes account of thedry bulb temperatures and humidity conditions
duringtheprevioustwodays. TheformulausedforTHIis:
THI
t
=17.5+.55*DryBulb
t
+.2*WetBulb
t
ForWTHI,thecurrentdaysTHIgetsaweightof10,thepreviousdaysTHIgetsaweightof3,andtheweightfor
twodaysagois1. Thesedataareamaindriverinexplainingelectricusage.
18



Demand Response Measurement & Verification
Table2.1 ProsandConsofBaselineMethodologies
BaselineMethodology Pro Con
PreviousDay
Mostlikelythesame
usagepatternasthe
eventday
Easymethodfor
customertounderstand
Doesnottakeintoaccounttheeffectsof
weatheronload
Theneedforabaselineadjustment
AverageDailyUsage
Easymethodfor
customertounderstand
Averagingtakesoutthe
variabilityinloadforthe
daysusedtocreatethe
averageday
Anaverageloadshapecreatedfrom
multipledayloadshapeswillnottotally
capturetheusagepatternforanevent
day
Theneedforabaselineadjustment
ProxyDay
Matchesadaybasedon
definedvariablesuniform
witheventday
Findingadaybasedonthedefined
variables
Theneedforabaselineadjustment
Theremightnotbeadaytouseasthe
proxyday
RegressionModel
Conceptofvariable
relationshipiseasyto
understand
Customerunderstandingoftheprocess
used
Selectingthecorrectvariablestousein
themodel
2.5 EngineeringAlgorithms
Engineeringalgorithmsaremathematicalprocessescreatedtomeasureloadrequirementsofelectrical
equipment,suchaselectricmotors. Algorithmscanbeassimpleasanalyzingthedatafromrecording
usagepatternsofelectricalequipmenttobuildingcomplexmodelstodetermineequipmentload
requirements. ThesemeasurementsofloadcanthenbeusedbythecustomerduringaDReventto
basehowmuchloadisbeingreducedoreliminatedbyshuttingdownequipment. Forinstance,Figure
2.7representsthehourlyusagepatternofanelectricmotorcalculatedbyusinganengineering
algorithm. Withthisinformationacustomercanreduceorpoweroffthismotortomeetaload
reductionduringacalledDRevent.
Figure2.7 EngineeringAlgorithmExample
Hour 1 2 3 4 5 6 7 8 9 10 11 12
UseinkW 40 42 43 46 49 51 60 85 92 94 95 97
Hour 13 14 15 16 17 18 19 20 21 22 23 24
UseinkW 97 97 97 97 97 93 85 73 61 55 47 40
19









3
Demand Response Measurement & Verification
MassMarketMeasurement(ImpactEstimation)
MassmarketmeasurementreferstoimpactestimationofDRprogramswhereindividualmeasurement
ofcustomerimpactistooexpensiveortimeconsuming. Impactestimationisachievedbyaggregating
allparticipatingcustomersandcomparingtheresultantloadshapesagainstsimilarnonparticipating
customers. TogeneratetheseloadshapesawelldefinedtargetmarketfortheDRprogramisrequired.
Targetmarketsaresegmentsoflargercustomerclassesdefinedbyspecificcharacteristics. Atarget
marketmayintersectmorethanoneutilitycustomerclass.Customersinthetargetmarketthataccept
theprogramofferareclassifiedasprogramparticipants,whilecustomersdecliningtheprogramoffer
areclassifiedasnonparticipants. Thissectionwillfocusonmeasuringtheimpactofaprogramoffered
toatargetmarket.
Figure3.1TargetMarketFlow
ImpactestimationofamassmarketDRprogramissimilartotheprocessformeasuringindividual
customerimpacts. AprofilerepresentingtheCBLisdevelopedandcomparedtoaprofilethathasbeen
developedtorepresentallparticipatingmarketcustomers(theActualUse). Thedifferencebetween
theCBLandActualUseprofilesrepresentstheimpactoftheDRprogramoffer.
3.1 DevelopmentofCBLProfiles
MassmarketCBLsaretypicallydevelopedusingoneoftwooptions. Optiononeusesacontrolgroupto
developaloadshapefornonparticipatingcustomersinthetargetmarket. OptiontwodevelopsaCBL
viaestimationsbasedontheparticipantmarketsresponsetoDRevents. Figure3.2illustrateswhich
optionisgenerallyselectedbasedonDRprogramtype.
Figure:3.2BaselineDevelopmentSelectionGuide
TOU RTP CPP DLC PTR
RealTime CriticalPeak DirectLoad PeakTime
TimeofUse Pricing Pricing Control Rebate
ControlGroup

1

1
Estimationbasedon
ParticipantsResponse

1
Optiondependsonthenumberofdaysinwhichtheprogrammaybeinitiated.
2
ProgrammayseecontrolgroupsutilizedifSamplesaredeployed.
20








Demand Response Measurement & Verification
UsingaControlGrouptoDevelopaCBL
ControlgroupsworkverywellfordevelopingaCBLwhentheprogramhasalargenumberofrepetitive
DRevents. ThisisbecausemanyofthenonCBLestimationtechniquesrequiretheavailabilityofsimilar
days(temperature,dayofweek,etc.)wherenoeventhasoccurred. Forexample,aTOUprogram
whichdefinesseveraltimeperiodsandisavailableonaseasonalbasiswillrequireacontrolgroupto
facilitateimpactestimation.
10
Thisisbecauseeverydaycanbeconsideredaneventdayandnonon
eventdayswillbeavailabletogeneratetheCBL. Acontrolgroupiscomprisedofnonparticipating
customerswithinthetargetmarket. Utilitiesoftenleverageexistingloadresearchsamplestogenerate
acontrolgrouptominimizeadditionalcosts. Ifnopreexistingsampleisavailable,aspecificcontrol
groupsamplecanbedesignedtomeasurenonparticipatingcustomeruse.
11
TheCBListhenon
participants(fromcontrolgroupsample)loadshapeforthesametimeframeastheparticipantsload
shape.
LeveragingExistingLoadResearchSamples
Toleverageanexistingloadresearchsample,participantsitesmustberemovedfromtheoriginal
sampletoeliminatebias. Forexample,autilityoffersanewTOUprogramtoallcustomersinits
Residentialcustomerclass(theTargetMarket). Further,theutilityhasanexistingResidentialsample
thatestimatesthecustomerclass(beforethenewTOUwasoffered). Whenexpandedfromthesample
leveltotheclasslevel,theresultswillincludeboththosecustomersparticipatinginthenewTOU
programandthosethatdonot. Therefore,thegoalistodevelopaCBLthatomitsthenewresidential
TOUparticipants. ThisisachievedbysubtractingParticipantMarketusefromtheTargetMarkettoget
theBaselineLoadShapeforeachhourbyusingthissimpleformula:
TargetMarketParticipantMarket=BaselineLoadShape
Forexample:
T=TargetMarket(existingLRsamplewhichincludesallresidentialcustomers)
P=ParticipantMarket(thosecustomersthatareparticipantsinaDRprogram)and
B=theBaselineLoadShape
h=Hourending
ForHourending17:00 T
h
P
h
=B
h
or,
(800MW) (300MW)=500MW
ThissimpleformulaisappliedonanhourlybasistodeveloptheCBL.
Itisimportanttonotethatthisprocessshouldonlybeusedattheexpandedclasslevel. Attemptsto
useitattheaveragecustomeruselevelmayyieldunexpectedresults.
10
Timeofuseprogramsmayreflectmarginalcostand/orpriceelasticitywhichneedsmuchmoreevaluation.
Analystshouldrefertoprogramdesigncriteriasetbytheirpricingorganization.
11
SeveralchaptersintheAEICLoadResearchManualarededicatedtothedevelopment,implementationand
analysisofsamples.
21











Demand Response Measurement & Verification


ComparisonTechniques
TechniquestoquantifyDRimpactsmayvarybaseduponthemeasurerequired. Inmostcasesthe
measureisdefinedbythejurisdiction,orISO/RTO,establishingtheMeasurementandVerification
requirements. Someofthemorecommonmeasuresinclude:howmuchenergyshiftingoccurredduring
thepeakperiod;thedemandreductionduringthepeakhours;orthedecreaseindemandduringapre
establishedperiod(i.e.coincidentwiththesystempeakorclasspeak). Dependentuponthegranularity
andmagnitudeofdatagatheredfortheMeasurementandVerificationprocess,scalingorunitizingthe
datamayberequiredtoaccuratelycomparetheparticipantloadshapetothenonparticipantload
shapeasdescribedinthefollowingdiscussions. Itisfullyrecognizedthatseveraloptionsexisttoscale
loadshapesandthediscussionsbelowareusedtoillustratesomeofthemorecommonoptions.
PercentShiftfromPeakPeriod(AverageDemand)
Onecomparisontechniqueisthedeterminationoftheaveragedemanddecrease. Thistechnique
estimatesthetotalenergyshiftedfrompeakhourstooffpeakhoursbycalculatingthedifferenceinon
peakenergyusagebetweentheCBLandtheparticipantsloadshape. Forexample,assumingaTOU
classuses1,000MWhinamonth,with60%oftheenergyusedintheonpeakhoursand40%intheoff
peakhours. IftheCBLloadshapeuses65%ofitsenergyintheonpeakhours,thedifferenceis5%(65%
60%=5%). Therefore,TOUcustomersshifted5%oftheirusagetotheoffpeakhours. Thisequatesto
50MWh(5%times1,000MWh). Averagedemandshiftediscalculatedbasedonthisenergyshift
calculation,dividedbytotalhoursfortheevaluationperiod. Inthisexample,averagedemandshiftfrom
thepeakperiodis417kW(50MWh/(6hours*20days)*1000),(Figure3.3).
Figure3.3AverageDemandShift
PercentofPeakComparison
0%
20%
40%
60%
80%
100%
PeakHours
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
DRParticipants NonParticipants CBL
22

Demand Response Measurement & Verification


AverageHourlyVariationEvaluation(DemandEstimation)
Anothercomparisontechniqueisthedeterminationofthetotaldemandsavingsatthetimeofa
particularhourofinterestlikethehourofsystempeak. Thiscomparisontechniqueworkswellwhenthe
averagecustomeruseforboththeparticipantandnonparticipantclassesaresimilar.
Thetotaldemandsavingsisdeterminedbyexpandingthedailyhourlyreductioncoincidentwiththe
systempeakbythenumberofparticipants. Forexample,iftheUtilityssystemtypicallypeaksat5pm
(17:00hours)andthereare1,500participants,thenthetotaldemandsavingsis615kW[0.41kW*
1,500customers=615kW](Figure3.4).
Figure3.4 AverageHourlyVariationEvaluation
kW
ValuesinbarsrepresenthourlyTargetMarket
reductionlevelsduringanevent
DevelopingCBLsfromEstimationofParticipantsResponse
ThesecondoptionistodevelopaCBLfromestimationbasedonparticipantsresponse. Thisprocessis
mostusefulwhenrelativelyfewDReventsareinitiated. Inthismethod,theCBLisdevelopedusingthe
participantsloadshapeandanyoftheprocessespresentedinSection2(IndividualMeasurement).
SomemassmarketDRprogramshavediscreet,nonrepetitiveevents(e.g.DirectLoadControl
residentialairconditioning,orCriticalPeakPricing). Often,theseprogramshavealimitednumberof
callablehoursduringaseason. Inadditiontothepreviouslydiscussedmassmarketprocess,manyof
theevaluationtechniqueslikethoseexamplesdiscussedintheearlierIndividualMeasurementsection
canbeusedindevelopingtheCBL.Thekeyistheabilitytodevelopaneffectiveparticipantloadshape.
23







Demand Response Measurement & Verification
UsingbothControlGroupandCustomerTimeSeriesData
AnotheroptionforestimatingDemandResponseimpactusesacontrolgroupaswellasparticipantdata
duringeventandnoneventperiods. Asanexample,theaveragedemandforboththeparticipant(P)
andcontrol(C)groupsmaybemeasuredduringapretreatmentperiod,priortotheactivationofthe
program. Duringprogramactivation,theaveragedemandfortheparticipantandcontrolgroupscan
againbemeasured. Theimpactsareestimatedusingthisdifferenceofdifferencesapproach:
Imp_kW =(P_kW
t
C_kW
t
) (P_kW
t1
C_kW
t1
)
Imp_kW referstotheestimatedkWimpact
P_kW
t
referstotheaveragekWfortheparticipantgroupattimet
C_kW
t
referstotheaveragekWforthecontrolgroupattimet
t referstoapointintimeduringactivation
t1 referstoanearlierpointintimepriortoactivation
3.2 DiscussionontheEffectsofIndividualCustomersonMassMarketResults
Massmarketprogramsareconstantlyevolvingascustomersfrequentlyenterandexitprograms.
KnowingwhoisinyourprogrambecomesimportantwhendevelopingbothCBLandparticipant
customerloadshapes. Thefollowingarekeyissuesthatshouldbefrequentlyreviewedregardingthe
statusofMeasurementandVerificationprograms.
Ensurethemetersanalyzedbelongtothepopulationbeingestimated
Asparticipantsenterandexitaprogram,theycaninadvertentlybeassignedtothewronganalysis
group. Forexample,assumetheanalysthasgeneratedavalidcontrolgroupsampletoestimatethe
baselinefornonparticipantsofaCPPprogram. Subsequently,ifoneofthesamplepointsisallowedto
entertheCPPprogramandyetremainsinthebaselinesample,thenabiashasbeengeneratedinthe
developmentofthebaselineloadshape. ThisbiascangrowifmoresamplepointsconverttoCPP
participants.
Knowwhichcustomerschoosenottoparticipateinanevent
Someprogramshaveoptout,buythroughoroverrideprovisions. Participantschoosingtooptout
mayaffecttheparticipantsloadshape. TheM&Vplanshoulddefinewhatistobemeasuredandthe
processtobeusedtodetermineresults. Ifthemetricistoprovidetheaverageimpactforallcustomers
enrolledintheprogram,thenoptoutcustomersloadsareincludedintheparticipantsloadshape
analysis. However,ifthemetricistoprovidealoadshapeforallcustomerswhosaidtheywould
performduringtheevent,onlythosecustomerswhohavechosentooptinareincluded.
Ensureallavailableinformationisused
Massmarketdemandprogramstendtobedynamicinnaturewithcustomersenteringandexitingoften.
ParticipantschoosingtooptoutcanbeincludedinnonparticipantCBLloadshapeanalysis. Theseopt
outcustomersmeetthetargetmarketcriteriaandwilltendtoimprovethequalityoftheCBLload
shape. Itisrecommendedthatdevelopingappropriateprocessesisnecessarytoensureeachcustomer
iscorrectlysegregatedbytheiroptout,optincharacteristicsforeachDRevent.
24


Demand Response Measurement & Verification
3.3 OperabilityStudies
MassmarketDLCprogramsmaytendtodegradeinperformanceovertimeduetomechanicalfailuresof
switchesand/orsignalreceptors.Estimatedloadreductionsfrommassmarketloadcontrolprograms
mustbeadjustedaccordingtothepercentageofunitsthatremainoperable,inordernottooverstate
demandreductions.
Plansformassmarketprogramsshouldincludeperiodicoperabilitystudiestoestimateanddetermine
themagnitudeofanyoperabilityproblemsandpotentiallyshedlightontheunderlyingcauses. From
theoperabilitystudy,afailureratecanbecomputedfromthenumberofworkingdevicesdividedbythe
totalnumbertested. Theresultingnettogrossratioisappliedtolowertheloadreductionestimate.
Forexample,oneISOrequiredthateitheranoperabilitystudybeconductedeveryfiveyears,orthe
utilitycouldinsteadelecttouseanoperabilityratioof50%. ThisillustratesthatthecarefulDR
measurementimpactsdescribedinthispapercanbedrasticallyreducedbyoperabilitystudyresults,or
thelackthereof.
Stakeholdersshouldagreeattheoutsetoftheprogramonasampling,testingandreportingprotocol,
acceptableratios,orremediationpendingimprovement
.
Forexampleasimplerandomsampleof250
participanthomeswillgiveaninitialestimatewithanerrorboundof5%atthe90%levelof
confidence. Onceanettogrossratioof90%(orbetter)isdemonstrated,asimplerandomsampleof
100programparticipantswouldachievethesameerrorbound.
12
12
p.37,DeemedSavingsEstimatesforLegacyAirConditioningandWaterHeatingDirectLoadControlProgramsin
PJMRegion,March2007,PreparedforthePJMLoadAnalysisSubcommittee&CharlesGoldman,Lawrence
BerkeleyNationalLaboratory,byRLWAnalytics
http://www.pjm.com/committees/working-groups/lrwg/downloads/20070301-pjm-deemed-savings-report.pdf
25





4
Demand Response Measurement & Verification
Conclusion
TheMeasurementandVerificationofaDemandResponseeventresultsis,andwillcontinuetobe,a
subjectthatrequiresmorethanasinglemethodologythatcanbeappliedtothewiderangeofDemand
Responseprogramscurrentlyinplace. Itis,however,wellestablishedthatbaselineloadcurvesof
customerusecanprovidetheproxyshapeforwhatacustomersloadwouldhavebeenabsenta
demandresponseevent. TheAEICLoadResearchCommittee,andtheexpertpractitionerswho
authoredthispaper,havedevelopedthispapertopresentthevarious baselineandM&V
methodologiescurrentlydevelopedandbrieflydiscusshoweachisperformedinactualpractice. The
intentistopromoteclarityandproperapplicationofthesemethodologieswhileprovidingasingle
sourcedocumentofdefinitionsanddiscussionbyactualpractitioners. ItisnottheintentoftheAEIC
LoadResearchCommitteetopromoteanygivenmethod.
TheAEICLoadResearchCommitteehasconsistentlydevelopeddocumentationandtrainingprogramsto
promotetheadvancementofhighlyreliableanalysisandtechniquesbyLoadResearchprofessionalsand
industryexpertsfocusedonthestudyofelectricalusecharacteristics. AsMeasurementand
Verificationtechniquesmature,andadditionalmeasurementsrequiredbyAMIandSmartGrid
technologiesareidentified,theCommitteewillcontinuethispractice. Themostrecentstudiesand
paperscanbeviewedatwww.AEIC.org/load.research.
PleasecontacttheAEICLoadResearchCommitteeSecretaryforadditionalinformationortodiscussthe
contentofthiswhitepaper. Contactinformationcanbefoundatwww.AEIC.org/load_research.
26


5
Demand Response Measurement & Verification
Glossary
ActualUseTheamountofenergythecustomeractuallyconsumedduringtheDReventperiod.
AdvancedMeteringorAdvancedMeteringInfrastructure(AMI)
13
Asystemincludingmeasurement
devicesandacommunicationnetwork,publicand/orprivate,thatrecordscustomerconsumption,and
possiblyotherparameters,hourlyormorefrequentlyandthatprovidesfordailyormorefrequent
transmittalofmeasurementstoacentralcollectionpoint
Conservation Conservationincludesconsumeractionsordecisionstouselessenergy,reconsidering
prioritiesandeliminatingsomeenergyuse. Conservationandenergyefficiency(seeseparatedefinition)
areoftenusedasthoughtheyaresynonymous,becausebothreducekilowatthours(kWh)usedby
consumers.
CriticalPeakPricing(CPP)
13
CPPratestypicallychargeamuchhigherpriceduringafewhoursperday
oncriticalpeakdays. Thenumberofcriticalpeakdaysisusuallycappedforacalendaryearandare
linkedtoconditionssuchassystemreliabilityconcernsorveryhighsupplyprices.
CustomerBaseline(CBL) Theamountofenergythecustomerwouldhaveconsumedabsentasignalto
reduce.
DemandResponse(DR)
13
Changesinelectricusagebyendusecustomersfromtheirnormal
consumptionpatternsinresponsetochangesinthepriceofelectricityovertime,ortoincentive
paymentsdesignedtoinducelowerelectricityuseattimesofhighwholesalemarketpricesorwhen
systemreliabilityisjeopardized.
DemandResponseEvent
13
Aperiodoftimeidentifiedbythedemandresponseprogramsponsorwhen
itisseekingreducedenergyconsumptionand/orloadfromcustomersparticipatingintheprogram.
Dependingonthetypeofprogramandevent(economicoremergency),customersareexpectedto
respondordecidewhethertorespondtothecallforreducedloadandenergyusage.Theprogram
sponsorgenerallywillnotifythecustomerofthedemandresponseeventbeforetheeventbegins,and
whentheeventends.Generallyeacheventisacertainnumberofhours,andtheprogramsponsorsare
limitedtoamaximumnumberofeventsperyear.
DemandResources Thesetofdemandresponseandenergyefficiencyresourcesandprogramsthat
canbeusedtoreducedemandorreduceelectricitydemandgrowth.
DirectLoadControl(DLC)
13
Ademandresponseactivitybywhichtheprogram sponsorremotelyshuts
downorcyclesacustomerselectricalequipment(e.g.airconditioner,waterheater)onshortnotice.
Directloadcontrolprogramsareprimarilyofferedtoresidentialorsmallcommercialcustomers
27









Demand Response Measurement & Verification
EnergyEfficiency(EE)
13
Referstoprogramsthatareaimedatreducingtheenergyusedbyspecificend
usedevicesandsystems,typicallywithoutaffectingtheservicesprovided.Theseprogramsreduce
overallelectricityconsumption(reportedinmegawatthours),often,butnotalways,withoutexplicit
considerationforthetimingofprograminducedsavings.Suchsavingsaregenerallyachievedby
substitutingtechnologicallymoreadvancedequipmenttoproducethesamelevelofenduseservices
(e.g.lighting,heating,motordrive)withlesselectricity.Examplesincludeenergysavingappliancesand
lightingprograms,highefficiencyheating,ventilatingandairconditioning(HVAC)systemsorcontrol
modifications,efficientbuildingdesign,advancedelectricmotordrives,andheatrecoverysystems.
PeakTimeRebate(PTR) Programsthatofferrebatestocustomerswhouselesselectricityduring
criticalpeakevents.
RealTimePricing(RTP)
13
Aretailrateinwhichthepriceforelectricitytypicallyfluctuateshourly
reflectingchangesinthewholesalepriceofelectricity. Realtimepricingpricesaretypicallyknownto
customersonadayaheadorhouraheadbasis.
RegionalTransmissionOrganization(RTO)
13
Anorganizationwitharolesimilartothatofan
independentsystemoperatorbutcoveringalargergeographicalscaleandinvolvingboththeoperation
andplanningofatransmissionsystem.RTOsoftenrunorganizedmarketsforspotelectricity.
TargetMarket Segmentsoflargecustomerclassesdefinedbyspecificcharacteristics.
TimeofUse(TOU)Rate
13
Aratewhereusageunitpricesvarybymorethanonetimeperiodwithina
24hourday.TOUratesreflecttheaveragecostofgeneratinganddeliveringpowerduringthosetime
periods.Dailypricingblocksmightincludeanonpeak,partialpeak,andoffpeakpricefornonholiday
weekdays,withtheonpeakpriceasthehighestprice,andtheoffpeakpriceasthelowestprice.
13
2008AssessmentofDemandResponseandAdvancedMeteringStaffReport,FederalEnergyRegulatory
Commission,December2008,AppendixC:GlossaryfortheReport
28






























Demand Response Measurement & Verification
6 Acronyms
AMI AdvancedMeteringInfrastructure
CBL CustomerBaseLine
CPP CriticalPeakPricing
DLC DirectLoadControl
DOE DepartmentofEnergy
DR DemandResponse
DSM DemandSideManagement
EE EnergyEfficiency
EPA EnvironmentalProtectionAgency
FERC FederalEnergyRegulatoryCommission
ISO IndependentSystemOperator
LSE LoadServingEntity
M&V MeasurementandVerification
NERC NorthAmericanElectricReliabilityCorporation
PUC PublicUtilityCommission
RTO RegionalTransmissionOrganization
RTP RealTimePricing
PTR PeakTimeRebate
TOU TimeofUse
29