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Electricity Markets: Demand-Response Activities Have Increased, but FERC Could Improve Data Collection and Reporting Efforts
Frank Rusco (au)
Electricity demand fluctuates throughout the day and year and is generated first at U.S. power plants with the lowest operating costs, and, as demand rises, at more costly plants. Prior to being sold to retail consumers such as households and businesses, electricity is traded in wholesale markets. Regulation of electricity markets is divided; states oversee retail markets, and the Fed. Energy Regulatory Comm. (FERC) oversees wholesale markets. In 2004, GAO reported on the benefits of encouraging consumers to reduce demand when the cost to generate electricity is high. These activities are known as ńˇýdemand-response activities,ńˇŁ which can reduce the costs of producing electricity, improve market functions, and enhance reliability. This report provides an update on demand-response activities since 2004. It discusses: (1) federal efforts to facilitate demand-response activities; (2) FERC efforts to collect and report data on demand-response activities; (3) changes in the extent of demand-response activities; and (4) key benefits and challenges of current efforts. Tables and figures. This is a print on demand report.
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