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Demand Response Aggregators and the MISO Wholesale Markets: A Survey of State Laws

December 2017

Citation: ELR 11065

Author: Michael Gallagher

Demand response—programs designed to encourage end-users to reduce electricity use during peak periods—has played a large role in contemporary energy markets. This growing market has created a new market actor: demand response aggregators. These aggregators have not enjoyed success in many of the states in the Midcontinent Independent System Operator (MISO): at least 10 of the 15 states prohibit aggregators from directly bidding into MISO wholesale markets, and these prohibitions vary significantly in their rationale. This Article argues that legislatures are in the best position to clarify the role for demand response aggregators in the current regulatory structure. If legislatures do not act, other institutional actors may take action to fill the void: utility commissions could allow aggregators to bid into wholesale markets, or FERC could issue an order overruling the state’s veto. Time will tell how the legal system chooses to keep up with rapid technological developments in this area.

Michael Gallagher received his J.D. from Notre Dame Law School in 2017 and B.A. in History and Political Science from Duquesne University in 2013.

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