ALJ/JHE/jyc Date of Issuance 4/28/2008
Decision 08-04-050 April 24, 2008
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking Regarding Policies and Protocols for Demand Response Load Impact Estimates, Cost-Effectiveness Methodologies, Megawatt Goals and Alignment with California Independent System Operator Market Design Protocols. |
Rulemaking 07-01-041 (Filed January 25, 2007) |
DECISION ADOPTING PROTOCOLS FOR ESTIMATING DEMAND RESPONSE LOAD IMPACTS
DECISION ADOPTING PROTOCOLS FOR ESTIMATING DEMAND RESPONSE LOAD IMPACTS 1
1. Procedural Background 2
2. Load Impact Protocols 6
2.1. Purpose and Approach of the Protocols 6
2.2. Structure and Elements of the Protocols 8
2.2.1. Evaluation Planning - Protocols 1 through 3 10
2.2.2. Protocols for Ex Post Estimation of Impact of Event-Based Activities - Protocols 4 through 10 11
2.2.3. Protocols for Ex Post Estimation of Impact of Non-Event-Based Activities - Protocols 11 through 16 12
2.2.4. Protocols for Ex Ante Estimation of Load Impacts 14
2.2.5. Portfolio Protocols 16
2.2.6. Sampling Protocols 16
2.2.7. Reporting Protocols 17
2.2.8. Process Protocols 17
3. Conclusions in Areas of Disagreement 18
3.1. Baseline Issues 19
3.1.1. Customer Settlement Baselines Differ from Ex Post Program Baselines 22
3.2. Portfolio Load Impact Estimation (New Protocol 24) 23
3.3. Addition of Reporting on 1-in-10 Weather Year 25
3.4. Inclusion of Reporting on 100 Hours with Highest Loss of Load Equivalent (LOLE) 26
3.5. Joint Parties' Revised Straw Proposal 27
3.6. Ice Energy Straw Proposal 27
4. Appropriate Uses of the Adopted Protocols 27
5. Issues Outside of the Scope of this Proceeding 29
6. Load Impact Protocol for Operational Planning Purposes 29
7. Comments on Proposed Decision 30
8. Assignment of Proceeding 32
Findings of Fact 32
Conclusions of Law 34
ORDER 35
ATTACHMENT A - Protocols
DECISION ADOPTING PROTOCOLS FOR ESTIMATING DEMAND RESPONSE LOAD IMPACT
This decision adopts protocols1 for estimating the impact of demand response (DR) activities on electric load. This is a very technical decision which provides important information for using demand response as a resource, consistent with the Energy Action Plan I, II, and the 2008 update. The protocols set forth in Attachment A shall be used in the preparation and evaluation of the 2009-2011 DR Program and Budget Applications (Applications), due to be filed by Southern California Edison Company (SCE), Pacific Gas and Electric Company (PG&E) and San Diego Gas & Electric Company (SDG&E) on June 1, 2008. This decision completes work related to load impact estimation in Phase 1 of Commission Rulemaking (R.) 07-01-041; this proceeding remains open to address other issues, including Cost-Effectiveness Methodologies in Phase 1 and the development of DR goals in Phase 2.
1. Procedural Background
On January 25, 2007, the Commission opened R.07-01-041 to address several specific issues related to the Commission's efforts to develop effective DR programs for California's investor-owned electric utilities (IOUs). The Scoping Memo issued on April 18, 2007 divided the major work of this proceeding into two phases. Phase 1, which began in spring of 2007, focuses on the development of M&E protocols and methodologies related to existing and possible future DR activities. Phase 2, which was formally launched by a joint assigned Commissioner's and Administrative Law Judge's (ALJ) Ruling on October 1, 2007, focuses on establishing new DR goals.
The Scoping Ruling required the IOUs, and allowed other parties, to develop and submit straw proposals on load impact estimation and
cost-effectiveness for consideration in this proceeding. On July 16, 2007, three-straw proposals on Load Impact Estimation and two on calculating cost-effectiveness were filed. The IOUs filed joint straw proposals on both load impact estimation and cost-effectiveness, as required in the scoping memo. Ice Energy also filed straw proposals on both load impact estimation and cost-effectiveness, and the Ancillary Services Coalition, the California Large Energy Consumers Association (CLECA), Comverge, Inc., EnerNOC, Inc., and Energy Connect, together the "Joint Parties," filed a joint straw proposal on load impact estimation.
Energy Division hosted two workshops on the load impact proposals in July and August 2007. The first workshop, on July 19, 2007, allowed parties that had submitted proposals an opportunity to describe their proposals and answer questions from other parties. Parties filed initial post-workshop comments on the straw proposals in late July.2 At the second workshop, on August 1, 2007, parties discussed areas of agreement and disagreement, and worked to resolve differences. Parties worked together to prepare a report, filed by the Joint IOUs on August 22, 2007, describing the areas of agreement and specifying the parties' positions on areas of disagreement. At the request of the IOUs, the ALJ issued a ruling on August 13, 2007, which modified the Phase 1 schedule to allow parties to file revised straw proposals on cost-effectiveness and load impact methodologies, and extended the date to request evidentiary hearings until September 19, 2007. This ruling also extended to October 12, 2007 the date for issuance of the staff reports synthesizing the comments and party positions and making staff recommendations on protocols for estimating DR load impact and cost-effectiveness.
Energy Division staff issued their report with recommendations on load impact issues on October 12, 2007. Parties filed final comments on the load impact report on October 24, 2007.3 Based on these final comments and the information comprising the record on this issue, Energy Division and the assigned ALJ developed the final protocols attached to this Decision as Attachment A.
On September 19, 2007, the Commission received three filings addressing the possible need for evidentiary hearings on Phase 1 issues from CLECA, PG&E, and SDG&E and SCE (jointly). PG&E and CLECA each requested evidentiary hearings on certain limited issues related to the development of a cost-effectiveness methodology; CLECA did not see the need for hearings on load impact issues, and PG&E suggested two issues related to the Joint Utilities' load impact protocol that might benefit from further process. PG&E, SCE, and SDG&E (the Joint Utilities) and the CAISO filed responses to CLECA's request for hearings.
An ALJ Ruling issued on October 15, 2007, denied these hearing requests, but extended the Phase 1 procedural schedule to allow parties to address several cost-effectiveness issues raised in the requests through individual or joint proposals and comments.4 Most active parties in the proceeding filed a joint framework proposal5 in response to this ruling. Rather than answering the specific questions posed in the ruling, this "consensus framework" represented agreement by the various parties on approaches to many of the major cost-effectiveness issues previously in dispute. The consensus framework left several issues unresolved, which parties agreed would need to be deferred to the proceeding on the IOUs' forthcoming DR Applications. This decision does not adopt a cost-effectiveness protocol, which will be addressed in a future decision in Phase 1 of this proceeding.
Section 2 of this decision describes the protocol adopted in this decision; Section 3 describes the Commission's rationale for choices on protocol elements on which there were significant differences among the parties. Section 4 provides detail on when and how these protocols should be applied, and
Section 5 discusses issues raised in comments and workshops that are outside the scope of this proceeding. Section 6 describes the need for development of a future protocol for estimating operational load impacts.
1 A protocol is a set of guidelines or rules.
2 Comments were filed by the California Independent System Operator (CAISO), CLECA, the Division of Ratepayer Advocates (DRA), Energy Curtailment Specialists, Inc., Integral Analytics, Inc., Ice Energy, Kinder Morgan (KM), PG&E, SCE, and SDG&E. The Utility Reform Network (TURN), Wal-Mart Stores, and, as well as by the Joint Parties on the Load Impact Straw Proposals, and jointly by Ancillary Services Coalition, EnerNOC, Energy Connect, and Comverge on the IOUs' cost-effectiveness Proposal.
3 The following parties filed comments on October 24, 2007, on the staff report on Load Impact issues: Comverge, EnerNOC, and Energy Connect (jointly), the IOUs (jointly), CAISO, DRA, KM, TURN, and Wal-Mart.
4 We affirm this, and all other ALJ rulings made to date in this proceeding.
5 Joint Comments of CLECA, Comverge, Inc., DRA, EnergyConnect, Inc., EnerNoc, Inc., Ice Energy, Inc., PG&E, SDG&E, SCE, and TURN Recommending a DR cost-effectiveness Evaluation Framework, filed November 19, 2007 in R.07-01-041.
