Role of public regulators in demand response business ecosystem — Case New York State electric power market

Abstract

This paper draws on business ecosystem research and concepts to study the structure and interdependencies of demand response business network in New York State power market, with a particular focus in investigating the role of public regulators in the business ecosystem. The analysis suggests that while demand response aggregators operatively lead the ecosystem, the regulators hold a central role in both the birth and sustainability of the ecosystem through their authority in setting market rules and performance requirements as well as in their control of the demand response program funding mechanisms. Moreover, an analysis of the distribution of economic value generated by the ecosystem indicates that only a minimal portion of the value surplus accumulates to the ecosystem's operative customers (NYISO and utilities), which suggests that they may have only limited incentives to support the growth and sustainability of the business ecosystem.