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Enron Mail |
Rick,
Here's what I mentioned. Thanks for the v-mail, let me know what I can do. Regards, Ozzie ---------------------- Forwarded by Ozzie Pagan/HOU/EES on 05/30/2001 07:18= =20 PM --------------------------- Elizabeth Howley 05/29/2001 12:45 PM To: Ozzie Pagan/HOU/EES@EES cc: =20 Subject: Reliant Pushes for "Negawatt" Plan Ozzie - Here is an article talking about Reliant's effort to do what we were=20 discussing last week, regarding negawatts - getting wholesalers to pay for= =20 them like they were actual generated power instead of the absence of. ---------------------- Forwarded by Elizabeth Howley/HOU/EES on 05/29/2001= =20 12:37 PM --------------------------- STACEY BOLTON@ENRON 05/29/2001 12:14 PM To: Jeff A. Brown/HOU/EES@EES cc: Heather Mitchell/HOU/EES@EES, Elizabeth Howley/HOU/EES@EES, Mary=20 Schoen/NA/Enron@Enron=20 Subject: Reliant Pushes for "Negawatt" Plan This is the Reliant program I mentioned in our meeting. ----- Forwarded by Stacey Bolton/NA/Enron on 05/29/2001 12:13 PM ----- =09Lynnette Barnes =0905/29/2001 11:58 AM =09=09=20 =09=09 To: Tom Chapman/HOU/ECT@ECT, Marchris Robinson/NA/Enron@Enron, Bill= =20 Moore/NA/Enron@Enron, Howard Fromer/NA/Enron@Enron, Frank=20 Rishe/NA/Enron@Enron, Steve Montovano/NA/Enron@Enron, Daniel=20 Allegretti/NA/Enron@Enron, Jeff Ader/HOU/EES@EES, Mark Bernstein/HOU/EES@EE= S,=20 Pearce W Hammond/HOU/EES@EES, Brad J Snyder/HOU/EES@EES, Gloria=20 Ogenyi/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert Frank/NA/Enron@Enron, Ma= ry=20 Schoen/NA/Enron@Enron, Ron McNamara/NA/Enron@Enron, Harry=20 Kingerski/NA/Enron@Enron, James D Steffes/NA/Enron@Enron, Stacey=20 Bolton/NA/Enron@Enron, Patrick Keene/NA/Enron@Enron, Leslie=20 Lawner/NA/Enron@Enron, Stella Chan/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT,=20 Robert Neustaedter/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kevin=20 Kuykendall/Enron@EnronXGate, Roy Boston/HOU/EES@EES, Barbara A=20 Hueter/NA/Enron@Enron, Becky Merola/HOU/NewPower@NewPower, Susan M=20 Landwehr/NA/Enron@Enron, Janine Migden/NA/Enron@Enron, Kerry=20 Stroup/NA/Enron@Enron, Donald Lassere/NA/Enron@Enron, bmerola@newpower.com,= =20 Geoff Duda/HOU/NewPower@NewPower, kathleen.magruder@newpower.com,=20 pbray@newpower.com, sbertin@newpower.com, scovino@newpower.com,=20 treichel@newpower.com, cynthia.sandherr@newpower.com, Kathleen=20 Sullivan/NA/Enron@ENRON =09=09 cc:=20 =09=09 Subject: Reliant Pushes for "Negawatt" Plan FT Energy Article By Rick Stouffer rstouffer@ftenergy.com The electricity supply-demand equation is simple: Match supply to demand an= d=20 things are dandy. Demand overwhelms supply: build more supply. Throughout the country, but particularly in California, there is no questio= n=20 more supply is mandated=01*NIMBY (not in my backyard) be hanged. But what a= bout=20 the demand side of the issue? What about getting customers involved in the= =20 solution by allowing them to sell their excess power back into the system?= =20 'Negawatts' nothing new Granted, the concept of negawatts is nothing new; it was coined roughly a= =20 quarter-century ago by the founder of the Boulder-based consulting firm E= =20 Source: Amory Lovins. Many utilities today use customer curtailment to get= =20 them through wattage rough spots from time to time.=20 All the existing independent system operators have actively considered=20 demand-side bids at one time or another, according to Richard Rudden,=20 president of the consulting firm R.J. Rudden Associates in Hauppauge, N.Y.= =20 But what about a negawatt program serving the entire Western Interconnectio= n?=20 Rather than a supply exchange, aka an independent system operator, put in= =20 place a "demand exchange" where customers could make a choice: Do I produce= =20 widgets, run my milling machines, build product or take the power I would= =20 have used, bid it out and see what happens?=20 Just such a demand exchange within the Western Interconnection is being=20 championed by an unlikely proponent: Reliant Energy Inc.=20 The Houston-based energy giant already has testified in Washington, D.C.,= =20 concerning the proposal, has had meetings with key Western state government= =20 leadership and pitched its idea to trade associations and environmental=20 groups.=20 The scorecard: Thus far, no one has laughed, no one has walked away from th= e=20 conversations=01*no one has said "no," according to Reliant's John H. Stout= ,=20 senior vice president of asset commercialization.=20 "You're taking forced, rotating outages and prioritizing the interruption,= =20 with the customer (that) can take the outage doing so," said Stout.=20 Much of what Reliant proposes is included in Texas Republican Congressman J= oe=20 Barton's Electricity Emergency Assistance bill, but no big generator is=20 pushing from the industry side like Reliant.=20 A demand exchange Like generators, including Reliant, bidding load into the independent syste= m=20 operator pool, a demand exchange allows retail customers to determine what= =20 they could spare and bid in a specific load and acceptable price.=20 The negawatt dispatch clearinghouse would develop a bid stack and make it= =20 available throughout the Western Systems Coordinating Council (WSCC). If a= =20 particular system needed more power, it would contact the clearinghouse,=20 which would match the least cost set of bids that could be shipped, keeping= =20 in mind additional transmission charges.=20 Once the bids were identified, the clearinghouse would contact the customer= =20 and its local control area. The customer would interrupt and the host utili= ty=20 would move the curtailed megawatts onto an export schedule.=20 One key to the program's success is that no one loses money. The customer= =20 that gave up its designated electrons would continue to pay its retail=20 supplier for what it didn't actually use, and the customer would receive it= s=20 bid price, times the megawatts curtailed, minus its regular retail charges,= =20 plus any payment to the transmission provider.=20 "The key is it gets the incentives right at the margin," said William Hogan= ,=20 a professor at Harvard University's John F. Kennedy School of Government.= =20 Another key to the Reliant-championed negawatt program is that it is not=20 seasonal; it doesn't lock a potential megawatt-shedder into a long-term=20 contract.=20 "You can bid into the market every day," said Stout.=20 "It offers a tremendous advantage in that it allows distributive decisions = to=20 be made, how much a customer is willing to take for an energy entitlement,"= =20 said Richard Tabors, president of the Cambridge, Mass.-based energy=20 consulting firm Tabors, Carmanis & Associates.=20 As Tabors points out, customers who sell back into the market obviously are= =20 doing so to play the margin, to make money. But their efforts also will hav= e=20 a serious impact on the spot market price.=20 "Every megawatt not consumed is a megawatt which doesn't have to be=20 produced," Tabors reasoned. "That lowers the marginal cost, the spot market= =20 cost. It really comes down to what (specific megawatts) are worth to someon= e=20 and not worth to me."=20 Heavy users thrilled Heavy industrial users already are thrilled with the regional negawatt=20 proposal. "We think it is a well thought-out program. We feel customers hav= e=20 the right to buy power, they should have the right to sell power and ought = to=20 be compensated like the generators," said John Anderson, executive director= =20 of ELCON, the Electricity Consumers Resource Council, which represents larg= e=20 industrial users from nearly every manufacturing sector.=20 Anderson favors this particular plan because it gives the customer choice= =01* sound familiar?=01*allowing it to determine when it shuts down or gives up = its=20 power.=20 "This is voluntary. You know when you will be shut down and thus you won't= =20 incur any damages," said Anderson. "Many proposals tell the customer to cut= =20 usage, but it costs money for industrial users to just shut down. Command a= nd=20 control proposals treat everyone alike=01*and they're not."=20 Stout said at least two vendors have expressed interest in taking part in t= he=20 Reliant proposal, with discussions already taking place with Automated Powe= r=20 Exchange Inc. (APX).=20 "We have had discussions with Reliant; we're in the business of working wit= h=20 generators," said John Melby, vice president for North American marketing f= or=20 Santa Clara, Calif.-based APX.=20 According to Melby, APX represents more than half the demand response in th= e=20 California ISO. He said the company could utilize key computer programs and= =20 systems previously developed to get the region-wide negawatt program up and= =20 running.=20 The down side There could be a number of problems in moving forward with such a large pla= n.=20 Consultant Tabors, for example, pointed to the White House and the Bush=20 administration's seeming preoccupation with supply.=20 Harvard's Hogan said having the power available when needed was key, while= =20 Reliant's Stout said the biggest hurdle was that many states prohibit retai= l=20 customers from selling load back into the wholesale market. An obvious=20 solution to that would be passage of the Barton bill; however, nothing is= =20 certain in such a divided Congress.=20 Thus, Stout continues to travel the West pushing the negawatt program.=20 California Gov. Gray Davis was briefed on the plan some two weeks ago when = he=20 called a meeting of all California's generators.=20 "We thought he (Davis) generally liked the idea," Stout said.=20 Next up on Reliant's hit list is S. David Freeman, former head of the Los= =20 Angeles Department of Water and Power and now Davis' California energy=20 conservation "czar."=20 "We've already raised the issue with him (Freeman), but we're looking to pl= ug=20 him in," Stout said.=20
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