Is DR a charge, or is it an incentive. I am of the opinion that
it is an incentive.
Last week I contracted with my supplier to get apples at a given
price each week. Based upon that price I ran store specials and pre-sold apple
pies for Christmas. This week my supplier alerts me that he cannot fulfill his
contract, and I start looking for liquidated damages…
Instead of merely stiffing me, the supplier calls all the apple
stands and bakeries in the city and sees which ones are willing to sell back
the apples they have contracted for. The initial contract was for $1 a bushel,
and he needs to buy them back for $1.50 a bushel, but it is worth it to keep
the customers happy with the supplier., and to avoid liquidated damages.
Alternately the supplier could find another source of apples in
Washington State and pay extraordinary shipping charges to make the original
contract
I would argue that in traditional GAAP, the sales are still at a
dollar a bushel. I could chose to add the shipping charges to Costs of Goods
Sold, or I could create some sort of extraordinary cost line to hold the
emergency buy-backs.
If I understand the various market operation DR scenarios…
-
Supplier could send around a notice of willingness to buy out of
previous contract.
-
Supplier could have a Dutch auction until the clearing market
for additional buyers is found
-
Supplier could exercise existing call options on certain
customers to get the apples to meet the contracts.
Whether the existing customer just happens to be the one who has
advertised the apple buys for sale, i.e. is the customer who was being shorted
is an irrelevant detail.
This removes DR from Egg Math into a simpler model of two
transactions that may happen to be with the same person…and I believe
eliminates the difficulty you outline
"A man should never be ashamed to own that he has been in
the wrong, which is but saying ... that he is wiser today than yesterday."
-- Jonathan Swift
Chair, OASIS oBIX TC
Facilities Technology Office
University of North Carolina
Chapel Hill, NC
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blog: www.NewDaedalus.com
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From: b2g_interop@nist.gov [mailto:b2g_interop@nist.gov]
On Behalf Of David Holmberg
Sent: Wednesday, December 10, 2008 3:21 PM
To: Multiple recipients of list
Subject: Re: [smartgrid-discuss] Pricing standards
Hi Toby,
How do you see demand charges fitting in with dynamic pricing? Whoever manages
the distribution system has to be able to price electricity at a local level
(or customer level) for demand. So the price has a location field, or customer
code, or what? How do we get a local price distributed to a specific customer
or locality? How does the distribution system owner communicate demand charge
information to the market to effect price changes?
Speaking of locality issues, you raised the issue of emergency response needing
building address or some GIS polygon, and similar information for utility
operations (e.g., outage management, voltage sag). How are these similar, how
different? Seems that emergency response is largely focused on address, versus
utility operations which might be substation focused, or down to the meter
level (which is address of course). Do we use geospatial coordinates for the
front entrance, the meter, and for a polygon area when required? What does that
have to do with a distribution circuit?
You just raised the issue of quantity, which I hadn't included. The idea of
getting a cheaper price if you buy in bulk. So, price depends on (1) where you
are and (2) how much you use in addition to (3) source properties and (4)
quality.
Perhaps we keep a bill broken out as mine is according to generation charge,
transmission charge, and distribution charge.
- The main component of price is generation and this
covers source properties and quality
- transmission charge would cover distance from
source
- distribution charge would include demand charges
due to distribution system constraints (but I'm pretty ignorant about what
else demand charges might cover)
- plus there might be a % discount based on quantity
Some thoughts for now,
David
At 11:32 AM 12/10/2008, Toby Considine wrote:
I think we have to remember that we get the greatest
interoperability from a *light* interface.
I may price my power because of a Utah mandated Tariff. To the California
buyer, this is merely a price. If I am doing distributed generation from the
Home Owner's Association of the recently built Off-TheGrid Neighborhood
produced by [Comodity Homebuilder here], I may price my power based upon
whether running the wind turbines does a better job of keeping Canadian Geese
of the lawns….
The DR customer/recipient does not care how you came up with the price. In
particular, I doubt that the decision maker receiving OpenADR price signals
going to the Target Office in Minneapolis for stores in California cares at all
which tariffs in California generated the prices. That decision maker is inward
looking at his own business processes. What portion of the cost of my eggs at
the store is due to feed or to shipping or to reduced margins during market
surplus?
The supplier need to know how the supplier is pricing wares. The buyer needs to
make bids and be held to them. And that's all. And pricing in this way is common
for I2g/B3G/H2g/V2g…except where quantity discounts apply, which may be
for I2g.
On Wed, Dec 10, 2008 at 8:45 AM, John Gillerman <johng@sisconet.com>
wrote:
David,
I am new to this
group. Just to provide some background, I am on IEC TC 57 WG 13, 13, 16,
and 19.
Your doc mentioned
TC 57 so I thought I would forward two things that I think are relevant:
1) A recent copy of
the IEC 61970 Common Information Model. This is the data model described
in UML that TC 57 uses for enterprise integration. There is some
modeling related to schedules in the CIM. This is an Enterprise Architect file.
2) A recent paper
about ADR. This paper discuses the use of OPC Unified Architecture (OPC
UA). OPC UA is the web services version of the services IEC 61970
specifies for exchanging CIM data. OPC UA is also known as IEC
62541. While OPC UA is new, it is likely to be widely supported by
industrial control system vendors. As such it is a good choice for DR
related communication with industrial customers.
You should know
that EPRI and the IEC are beginning to actively work in this area. We
probably want to figure out how things fit together at some point so that we
don't end up doing the same thing twice.
Regards,
John Gillerman
SISCO
www.sisconet.com
T: 732 937-9745
F: 586 254-0053
M: 732
979-9595
From: David Holmberg [mailto:david.holmberg@nist.gov]
Sent: Tuesday, December 09, 2008 3:08 PM
To: smartgrid-discuss@lists.oasis-open.org;
b2g_interop@nist.gov
Subject: [smartgrid-discuss] Pricing standards
All,
As part of the discussion on
smart grid economics, in addition to schedules is the more general topic of
pricing. I have written up some thoughts on what we need to do to move forward
on pricing. Part of this is getting some standardized schedule as Toby
mentioned. Perhaps a pricing standard will end up in OASIS as well. Does
everyone know about the GridEcon meeting being planned for March in Chicago?
The plan is to come with a pricing proposal in hand to that meeting, and I
believe there is significant work to tackle prior to that time. Your input is
appreciated.
David
David Holmberg
NIST Building & Fire
Research Lab
Building Environment Division, Mechanical Systems and Controls
Group
100 Bureau Drive, Bldg. 226, Room B114, MS 8631, Gaithersburg, MD
20899-8631
TEL: 301/975-6450 FAX: 301/975-8973
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--
________________________________________
"When one door closes, another opens; but we often look so long and so
regretfully upon the closed door that we do not see the one which has opened
for us." -- Alexander Graham Bell
________________________________________
Toby Considine
Chair, OASIS oBIX TC http://www.oasis-open.org
Co-Chair, OASIS Technical Advisory Board
Toby.Considine@gmail.com
TC9, Inc
Phone: (919)619-2104
blog: www.NewDaedalus.com
David Holmberg
NIST Building & Fire Research Lab
Building Environment Division, Mechanical Systems and Controls Group
100 Bureau Drive, Bldg. 226, Room B114, MS 8631, Gaithersburg, MD 20899-8631
TEL: 301/975-6450 FAX: 301/975-8973