Apogee CEO Leads DOE Discussion on Standard Market Design Rules for Demand Response.

Business Editors

ATLANTA--(BUSINESS WIRE)--Aug. 1, 2002

In what continues to be a time of massive transition for the utility industry, Apogee CEO Joel Gilbert today urged DOE and FERC analysts and other recognized economic thought leaders to challenge conventional thinking about energy markets and, in particular, the demand side of the market.

"Existing market structures exhibit critical missing ingredients that could threaten system reliability," Gilbert said. "Customer peak load reductions are proven to work as a low-cost supply alternative. Yet volatility in the market inhibits prudent investment in this cost-effective strategic tool, as well as prudent investment in capacity additions." He called for more national dialogue about the roles of government and commerce in stabilizing today's energy markets.

Leading a workshop sponsored by the U.S. DOE Office of Distributed Energy & Electric Reliability in Washington today, Gilbert challenged attendees, "It's time to consider new approaches to risk sharing and risk shifting in the power industry to help ensure national system reliability. Today's energy infrastructure is responding to market prices that don't fully capture the value of reliability, leaving the system vulnerable. We must address how to build a better control system that anticipates price movements and invests resources to prevent price spikes rather than races to apply Band-Aids and tourniquets to market disasters."

Gilbert asserts there are commercial instruments, such as risk syndication, that can be deployed--rather than heavy-handed regulation--to help stabilize a market that rests on free market principles and offers all customers the advantage of demand response. He contends demand response should become a critical infrastructure element in a supplier's portfolio and should not continue to be treated as a discretionary investment. His provocative concepts promoted lively debate among workshop participants which included FERC and DOE analysts, recognized economic and forecasting thought leaders, private equity financiers and project developers.

Gilbert cited experiences of The Demand Exchange(R), the first and largest Internet aggregation of voluntary demand response in the US representing more than 150,000 MWhs in annual transactions. "Erratic market prices have stalled interest and investment in demand response," he reported. Gilbert is also author of the power industry's definitive guidebook on demand response called the "Demand Trading Toolkit," which he developed under contract for EPRI last fall. He's currently completing its sequel, "Demand Trading Liquidity," which EPRI has targeted to issue early this fall.

Founded in 1994 by Gilbert, Apogee Interactive Inc. (http://www.apogee.net/) is a full-service technology solutions and consulting firm specializing in the energy industry. Its business solutions include Internet-based load management platforms (including The Demand Exchange http://www.demx.com/); energy management data analysis; portals for online energy courses (http://www.study-center.com/); and interactive website content and development.

Gilbert is also founder and current vice chair of the Peak Load Management Alliance (http://www.peaklma.com/), a collaborative organization of energy companies and suppliers dedicated to advancing effective peak load management through open discussion and technology evaluation.