How Energy Customers Can Help Electric Utilities N ow User "Load" Can Be a Resource for Utilities' Ancillary Services

Authors

  • Brendan Kirby Oak Ridge National Laboratory
  • Eric Hirst Consultants ill Electric-Industrv Restructuring Oak Ridge, Tennessee

DOI:

https://doi.org/10.13052/dgaej2156-3306.1434

Abstract

Most of the commercially important ancillary services involve
maintaining or restoring the generation and customer load real-power
balance over varying time frames . Traditionally utilities have addressed
this problem almost exclusively by controlling generation.
It does not have to be this wa y, however . The important concept is
to balance user consumption and generation, which can be done using
either side of the balancing equation. Controlling user load may be the
single largest untapped resource currently available to the electricity
indu str y.
Restructuring is beginning to pro vide a framework within which
this resource could be exploited. Several obstacles exist (primarily re-
lated to aggregation, communications, and economic incentives) but
technical and commercial solutions to these problems also exist.

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Author Biographies

Brendan Kirby, Oak Ridge National Laboratory

Brendan Kirby, P.E., is a senior researcher at Oak Ridge National
Laboratory and a private consultant. He has 23 years of electric utility
experience, has been working on restructuring and ancillary services
since 1994 and spot retail power markets since 1985.
Brendan's interests include electric industry restructuring, ancil-
lary services, distributed resources, demand side response, energy
storage, renewable resources, and advanced analysis techniques. He has
published 33 papers, articles, and reports on restructuring issues. He is
participating on the NERC lOS Working Group, served as staff to the
Department of Energy's Task Force on Electric System Reliability, and
has appeared as an expert witness in FERC litigation. He has conducted
research projects concerning restructuring for the NRC, DOE, EEl, nu-
merous utilities, state regulators and EPRI.
Mr. Kirby holds an electrical engineering degree from Lehigh Uni-
versity.

Eric Hirst, Consultants ill Electric-Industrv Restructuring Oak Ridge, Tennessee

Eric Hirst, Ph.D., has been conducting and managing applied re-
search projects related to a variety of energy issues for more than 25 years. He is a consultant in electric -industry restructuring and a senior
researcher at Oak Ridge National Laboratory (ORNL).
Hirst's consulting practice focuses on five key areas related to re-
cent and ongoing changes in the U.S. electricity industry:
Ancillary services: The amounts of each service (e.g., regulation,
load following, and voltage support) required for commercial transac-
tions and to maintain bulk-power reliability. Industry practices to
unbundle and rebundle services and to establish appropriate metrics for
each service. Factors that determine the costs and prices for these ser -
vice s. Relationship between these services and the functions of
independent system operators.
Transition costs : Analytical and market methods used to determine
the amount of money at risk for individual utility assets and liabilities.
The key factors that affect these estimates. How utilities, regulators,
wholesale power providers, and others can offset these costs. Allocation
of the remaining costs among utility shareholders , retail customers,
wholesale customers, and other groups. Cost-recovery methods that fos-
ter competitive electricity markets.
Env ironmental effects of restructuring: Effects of bulk-power mar-
ket structures and pricing methods on generator retirements, and on the
types of generators constructed and dispatched to meet loads . Alterna-
tive market and regulatory methods to ensure that increased
competition in power supply reduces the adverse environmental effects
of electricity production.
Horizontal market power: Definition of geographic and product
markets, given the characteristics of generating units and the existence
of transmission costs, losses, and constraints. Analytical methods used
to assess the ability of different generators to set time -dependent spot-
market prices and thereby earn "excess" profits. Regulatory tools to
reduce market pow er.
Public-policy benefits : R&D, energy efficiency, renewable re-
sources, and other societal goals. Public-policy functions that may
require special support in a restructured electricity industry.
During the past several months, Hirst has conducted consulting
projects for Enr on Capital and Trade, the Electricity Consumers Re-
source Council, American Electric Power, the Edison Electric Institute,
and the Idaho Public Utilities Commission. The diversity of H irst's past
and present clients attests to his deserved reputation for professional
integrity and even-handedness.

At ORNL since 1970, Hirst is a Corporate Fellow, a distinction
shared by only 1% of the ORNL technical staff. He is also leader of the
Electric-Industry Policy Studies Group, which conducts projects for the
U'S, Department of Energy and Environmental Protection Agency on
electric-industry restructuring. During the past 3 years, the group has
focused on projects that deal with unbundling generation and transmis-
sion services (ancillary services) and transition (stranded) costs. Hirst
and Kirby are the authors of five ORNL reports plus many papers and
presentations at technical conference on ancillary services. In addition to
their work for DOE, they have conducted projects on ancillary services
for Detroit Edison and the National Regulatory Research Institute. Hirst
and Kirby also serve as staff to the Department of Energy's Task Force
on Electric-System Reliability, a topic closely related to ancillary ser-
vices .
Hirst holds a Ph.D. degree in mechanical engineering from Stan-
ford University. He has published more than 300 reports, journal
articles, and book chapters.

References

E. Hirst and B. Kirby, The Functions, Metrics, Costs, and Prices for Three

Ancillary Services, Edison Electric Institute, Washington, DC, October

E. Hirst and B. Kirby, "Cutting Electricity Costs for Industrial Plants

in a Real-Time World," Public Utilities Fortnightly 135(22),42-45, De-

cember 1997.

North American Electric Reliability Council, NERC Operating

Manual, Princeton, NJ, December 1997b.

North American Electric Reliability Council, Policy lO-Intercon-

necied Operations Services, draft, Princeton, NJ, November 1998.

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Published

1999-06-15

How to Cite

Kirby, B. ., & Hirst, E. . (1999). How Energy Customers Can Help Electric Utilities N ow User "Load" Can Be a Resource for Utilities’ Ancillary Services. Distributed Generation &Amp; Alternative Energy Journal, 14(3), 24–38. https://doi.org/10.13052/dgaej2156-3306.1434

Issue

1999: Vol 14 Iss 3

Section

Articles