Demand Reserves Partnership Program in California Power Market

Demand side management has been widely accepted as an efficient way to provide a clean, flexible power reserve capacity for mitigating price spikes in wholesale energy markets and as a mechanism to enhance system reliability for electricity consumers during peak load periods. The California Consumer Power and Conservation Financing Authority (CPA), on behalf of the State of California, initiated and has managed the Demand Reserves Partnership Program (DRP) since 2002. APX, Inc., as an independent power market service provider was selected to design, implement, and maintain the system used to operate the DRP program. The program provides a mechanism that allows power consumers to benefit financially from their ability to reduce power consumption when called upon. It provides a flexible tool for program participants to offer their capacity into the CAISO energy market, commensurate with their ability to reduce on an hour-by-hour basis. The program recognizes the value to the market for providing this service, and compensates providers accordingly. This paper describes the California DRP system design and the integration with California´s wholesale power market. A program summary for the summer periods of calendar years 2004 and 2005 is also included in the paper