GM 2019 - Distributed Demand Response Dilemma: Defect or Engage

Penetration levels of standalone DERs and smart technologies continuously increase, offering consumers an unprecedented set of options to meet their demand for electric energy services. The ability to choose an electricity supplier from a diverse pool with traditional utilities, innovative demand response load aggregators and multiple standalone service providers invigorates competition at the distribution level. As a result of this competition, third-party providers may be able to offer more lucrative incentives for DERs to defect traditional utilities. If the grid operator, market operator and/or regulating bodies fail to provide proper price signals, consumers and standalone DERs may opt to defect from the grid and cease providing grid support services, thus further exacerbating lack of control options at the distribution level. This risk motivates an overhaul in utility-scale DR programs and market designs that would ensure resource adequacy for cost-efficient and reliable system operations. This panel will look into this problem from the perspective of consumers and standalone DERs, and comprehensively weigh in costs and benefits related to defecting utilities or engaging with utilities under new, revisited DR programs. The panel will address how the defect-or-engage dilemma affects the bottom line of utilities and describe necessary changes to their business models.