FERC last week approved SPP’s May 2016 proposal to change how it measures the net benefits of demand response under Order 745 (ER12-1179).

The 2011 order requires grid operators to pay DR resources full LMPs when they are able to reduce demand and their dispatch is more cost-effective than generation, as determined by a net benefits test.

SPP’s May 2016 compliance filing came in response to an April 2014 FERC order requiring the RTO to re-evaluate its net benefits test methodology using Integrated Marketplace data. The commission also asked SPP to propose any necessary changes to make its methodology compliant with Order 745 and to re-evaluate the appropriateness of its systemwide DR cost allocation mechanism.

The RTO proposed adjusting its net benefits test to use all available offer data and include non-peak hour data in the construction of supply curves. It said it would first average supply curves and then smooth the resulting average curve when performing the net benefits test.

“We agree with SPP that these two design changes to SPP’s net benefits test methodology are appropriate given the greater availability of offer data in the Integrated Marketplace,” the commission said. It ordered SPP to file Tariff revisions by July 5 implementing the two changes.

FERC also accepted SPP’s explanation that it did not need to adjust its DR cost allocation provisions, given there had not been any load-reduction activity in its footprint.

— Tom Kleckner