• FERC Approves Rules to Improve Compensation to Demand Response in Organized Electricity Markets
  • April 7, 2011 | Author: William L. Massey
  • Law Firm: Covington & Burling LLP - Washington Office
  • On March 15, 2011, FERC approved regulations that require RTOs and ISOs to pay demand resources (DR) that participate in the energy markets the Locational Marginal Price (LMP) if those resources clear the energy market auctions. LMP is the market-clearing price and reflects the marginal value of the last unit of resources needed to balance supply and demand. LMP has been the primary mechanism for compensating generation resources in the RTO and ISO organized markets.