Opinion on Economic Issues Raised by FERC Order 745, “Demand Response Compensation in Organized Wholesale Energy Markets”

Abstract:

EXCERPT FROM THE INTRODUCTION:

On March 15, 2011, the Federal Energy Regulatory Commission released Order 745. The pur- pose of the Order was to require that demand response (DR) resources participating in RTO or ISO markets are paid at the locational marginal price when such resources contribute to the supply-demand balance as a substitute for generation and when the demand response resources pass a net benefits test defined in the order.