
7 Smart Grid Conference 2014 (SGC’14) - Grid Renovation Workshop
∆MW = DR
∆LMP
Cost = LMP* ∆MW
(Paid to DR)
Benefit = MW* ∆LMP
(Savings by the Served
Load)
Benefit > Cost means MW*∆LMP > LMP*∆MW, i.e.
∆LMP/ ∆MW > LMP/MW
Slope = LMP/ MW
Slope = ∆LMP/ ∆MW
MW
$/MWh
Generation Offer
Curve
FERC Order 745 (March 2011): DR to be paid LMP subject to Benefit > Cost
Net Benefit Test
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