Fostering economic demand response in the Midwest ISO

The Midwest Independent System Operator (MISO) runs the power grid in 14 states and one Canadian province and has a peak demand of some 116,000 MW. Its operational area is richly supplied with reliability-triggered demand response programs such as direct load control of residential appliances and curtailable/interruptible rates for commercial and industrial customers. However, economic demand response programs are lacking. This paper discusses three different ways in which such programs can be introduced in the wholesale energy markets run by MISO. These include, first, an approach in which utilities and load serving entities move retail customers to dynamic pricing and other time-based pricing rates; second, an approach in which these same entities and possibly third-parties bid price responsive demand curves into the wholesale market; and third, an approach in which demand response is bid as a supply resource into the wholesale market. (C) 2009 Elsevier Ltd. All rights reserved.