August 21, 2020 Ms. Melanie…

August 21, 2020

Ms. Melanie Torrie
Ministry of Energy, Northern Development and Mines,
Conservation and Renewable Energy Division
77 Grenville St.
5th Floor
Toronto, ON
M7A 2C1
Canada

Dear Ms. Torrie,

My name is Nathan Garner and I am writing on behalf of EnergyHub in response to the ERO 019-2132 proposal for a 2021-2024 CDM Framework.

EnergyHub provides utilities a turn-key solution to manage distributed energy resources (DERs) at the grid edge. With the combination of EnergyHub's Mercury DERMS platform and customer-centric services, we enable utilities to deploy and manage portfolios of DERs at scale. EnergyHub’s bring-your-own-thermostat (BYOT) approach enrolls and dispatches thermostats from the leading brands in the industry, including Nest, Honeywell, Emerson, ecobee, Vivint, Alarm.com, Carrier, Lux Products, Filtrete and Radio Thermostat. EnergyHub’s platform collects and analyzes data from these devices, providing an in depth understanding of system load and available load shed capacity. Load shed is achieved via cycling, temperature offsets, or both, but all devices are capable of providing the expected load for the program season.

EnergyHub's Mercury Distributed Energy Resource Management System (DERMS) is a proven software platform for managing and controlling connected devices, namely internet-connected residential thermostats. Mercury monitors connected devices in near real-time, develops a baseline of predicted load, and precisely dispatches load resources to meet forecasted capacity needs.

BYOT DR represents an innovative approach to peak load management that requires a unique combination of expertise and technology. EnergyHub manages the project from end-to-end including recruiting customers, enrolling them with the IESO, aggregating load for economic dispatch and M&V.

While today EnergyHub would primarily aggregate smart thermostats the future of direct load control and distributed energy resource (DER) management will go beyond the connected thermostat to include additional connected loads in the home. EnergyHub will continue to be at the forefront of aggregating these loads as they come online.

EnergyHub’s aggregated resource can currently provide Demand Response Auction (DRA) capacity. With more significant overhaul of the requirements for participation as outlined below, EnergyHub would potentially be able to provide energy, operating reserve and regulation services as well. We ask for the following changes to the capacity market rules that would allow the IESO to take full advantage of capacity that is affordable, reliable and readily available.

1. Activation testing for Hourly DR resources should recognize weather sensitive resources and call events during peak periods. Chapter 7 describes how the IESO can schedule up to two activation events at any point during the delivery period. The profiles of residential HVAC and heating systems, which represent the largest points of consumption in typical homes, will reflect changes in weather as much or more than human activity patterns. For residential customers, space cooling and heating constitute the largest discretionary load and this cooling and heating load is highly correlated with temperature and other weather characteristics. Therefore, when it is hot, for example, household energy consumption increases, and more load is available to be reduced. On mild days there may be little demand response resource to draw upon. This variability does not mean the resource has no value, because this same pattern of demand tends to dominate the overall demand of the grid as well. Because residential space cooling and heating loads drive the peak demand on the larger system, aggregations of weather sensitive demand response capacity are a logical means to moderate that very tendency. Therefore, the IESO should be sure that if they are to call test events, there is a trigger that coincides with peak days, fully leveraging the ability of these resources to provide load shed and grid reliability.

2. The IESO should automate signals for standby notifications and activation notifications, as opposed to the current method that requires market participants to login each day to check if they have been scheduled for standby and/or activation. Signal automation would improve communication between the IESO and market participants, reduce the chance of a missed notification, and maximize the amount of time that DR market participants have to respond to standby notifications and activation notifications. An automated email or phone call would make a big difference for small aggregators - the manual work required to login to the IESO website every day is significant and discourages new market entrants. EnergyHub suggests the IESO use OpenADR 2.0 signals to communicate any dispatch or standby notifications. Many industry players, including utilities and markets, are moving towards this standards-based protocol for event communication (including California).

3. Data access. The main hurdle to EnergyHub’s participation in the Demand Response Auction is procuring meter data from residential customers who want to participate in EnergyHub’s programs. Residential participation requires relatively easy access to large numbers of customers’ meter data through an automated programming interface (API) to the IESO’s meter data management repository (MDMR) or to a similar system at each utility. Creating a frictionless meter-data platform is the key to making these aggregations cost effective and flexible resources for the wholesale market. The Ministry has recognized this shortcoming, and will soon require all utilities to create a Green Button Connect My Data platform for third parties to access customer data. However, this initiative is not slated to be complete until July 2020 at the earliest, hindering participation in the IESO markets until that time.

4. 1 MW requirement: The requirements to aggregate 1 MW by zone and LDC are unduly burdensome. This minimum size is much too big, especially for new market participants. Additionally, because the current system requires aggregators to create data sharing systems with each utility, it will be very hard for them to be able to aggregate 1 MW, in year one, by zone and LDC.

5. Varying DR capacity obligations. In the current construct, demand response providers must bid the minimum load reduction they are able to achieve for the entire six- month delivery period. Meaning, a seasonal resource that may be able to provide more load drop in August must bid the amount they are able to provide in May. As a result, the IESO is not taking advantage of the entire resource available and resources are not able maximize their revenues.

6. Baselines. The current control group construct says that there must be a minimum of 350 participants. This is much too large, adding significant cost for residential load aggregations, and preventing the IESO from capturing as much load shed as it reasonably can. The control group should be large enough that there are statistically significant limits on the impact that random fluctuations in individual usage can have on the baseline (and hence on reduction estimates). However, it should not be so large as to compromise the ability of the aggregation to provide the most load shed possible, or exclude smaller aggregations from participating. A baseline working group in California proposed a control group baseline that was accepted by the CAISO last year and is now being reviewed by FERC. In the proposal, one hundred and fifty homes (150) is the minimum acceptable control group size and aggregators may create control groups that cover multiple subLAPs (the California equivalent of an IESO zone), even if loads must be bid by sub-lap. If the IESO cannot soon reduce the number of zones or the minimum load required per zone due to system limitations, this simplification of the control group approach would be particularly important.

In addition, participation in the DRA would be more tenable if the IESO adopted alternative baseline methodologies so that smaller aggregations can more easily meet their minimum load response threshold. This same CAISO proposal included two additional baselines based on extensive field data: a 4-day weather matching baseline using maximum temperature with a +/- 40% day-of adjustment and a highest 5/10 day matching baseline with a +/- 40% day-of adjustment.

We hope to continue to work with the government of Ontario to ensure residential customers are able to unlock the full value of their connected devices through wholesale market participation.

Sincerely,
Nathan Garner
Operations Specialist
EnergyHub