Bill Overview
Title: REDUCE Act
Description: This bill requires organizations that operate electric grid transmission facilities (e.g., Regional Transmission Organizations or Independent System Operators) to accept bids in a power market from demand response programs of a certain size. In a demand response program, end-use electricity customers are typically remunerated for voluntarily decreasing their short-term electrical consumption generally in response to compromised grid reliability or high wholesale electricity prices.
Sponsors: Rep. Casten, Sean [D-IL-6]
Target Audience
Population: Electricity consumers and providers
Estimated Size: 300000000
- The REDUCE Act impacts both electricity providers (especially those operating electric grid transmission facilities) and electricity consumers.
- Electricity consumers participating in demand response programs will be directly affected, as they may benefit from incentives to reduce usage during peak times.
- Organizations managing grid operations, such as Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs), are central to implementing these new requirements.
- The act could lead to broader impacts on energy markets and prices, indirectly affecting all electricity consumers through potential changes in electricity rates.
Reasoning
- The REDUCE Act primarily targets electricity consumers and providers, focusing on demand response programs.
- The population impacted includes participants in demand response programs, residential and commercial electricity consumers, and grid operators.
- Consideration is given to diversity in population affected (e.g., urban vs rural, commercial vs residential).
- The policy's effects vary by energy consumption patterns, participation in programs, and economic incentives received.
Simulated Interviews
Office manager (Boston, MA)
Age: 35 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I'm open to trying demand response programs if it saves me money.
- Reducing energy costs is important to me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Tech entrepreneur (San Francisco, CA)
Age: 42 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- This policy is a step in the right direction for clean energy.
- Financial incentives are a strong motivator for my participation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 5 |
Bartender (Dallas, TX)
Age: 28 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 16/20
Statement of Opinion:
- I like the idea of being compensated for reducing energy use.
- It might be difficult with my schedule.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 3 |
Retired teacher (Rural Kansas)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- Demand response seems like a good opportunity to save some money.
- The policy needs to consider the rural perspective.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Manufacturing plant manager (Chicago, IL)
Age: 47 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- This policy could improve the reliability of our power at critical times.
- Our plant will participate if it makes financial sense.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 4 |
Graduate student (New York, NY)
Age: 24 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 2.0 years
Commonness: 15/20
Statement of Opinion:
- I support anything that could slow down climate change.
- Not sure how much personal impact I can have.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 4 | 4 |
| Year 5 | 4 | 3 |
| Year 10 | 3 | 3 |
| Year 20 | 3 | 3 |
Restaurant owner (Miami, FL)
Age: 39 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- Demand response programs could help reduce my electricity costs.
- The policy could ease some financial pressure.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 3 |
Nurse (Portland, OR)
Age: 50 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- I am excited about policies that promote clean energy adoption.
- We need more incentives for renewable energy use.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 7 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Data Analyst (Atlanta, GA)
Age: 31 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- Demand response programs seem beneficial if coupled with smart home technologies.
- There could be significant savings.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 3 |
Electric grid operator (Denver, CO)
Age: 55 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- The REDUCE Act aligns with the current trends in energy grid management.
- There will be challenges but also opportunities in implementation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Cost Estimates
Year 1: $50000000 (Low: $40000000, High: $60000000)
Year 2: $35000000 (Low: $30000000, High: $40000000)
Year 3: $36000000 (Low: $31000000, High: $41000000)
Year 5: $39000000 (Low: $34000000, High: $44000000)
Year 10: $43000000 (Low: $38000000, High: $48000000)
Year 100: $50000000 (Low: $45000000, High: $55000000)
Key Considerations
- The complexity and cost of modifying grid systems to integrate demand response bids.
- Potential resistance from stakeholders within established grid operations.
- Need for clear pricing structures and incentives to ensure consumer participation.
- Ensuring the reliability and predictability of demand response measures to adequately replace traditional generation.