Authors: Eric Hirst
April 1, 2002
Harvard Electricity Policy Group, John F. Kennedy School of Government
This paper addresses issues of price responsive demand as reliability resources.
Section 1 introduces the topic.
Secton 2 discusses current North American reliability rules and shows how these requirements discriminate against loads in the provision of reliability services.

Section 3 explains the wholesale markets that today's independent system operators (ISOs) run and that tomorrow's regional transmission organizations [RTOs; see FERC (1999)] will likely manage. These markets include day-ahead and real-time energy and congestion management, ancillary services, and long-term markets for installed capability and transmission congestion.

Section 4 proposes a new way to treat involuntary load reductions, for both equity and efficiency reasons. The final section summarizes the findings from this paper and offers suggestions on the use of retail loads to provide bulk-power reliability services.
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