PUC Continues Efforts To Improve Demand Response Programs For State To Help Meet Energy Needs

FOR IMMEDIATE RELEASE

Media Contact: Terrie Prosper, 415.703.1366, news@cpuc.ca.gov

PUC CONTINUES EFFORTS TO IMPROVE DEMAND RESPONSE PROGRAMS FOR STATE TO HELP MEET ENERGY NEEDS

SAN FRANCISCO, January 25, 2007 -- The California Public Utilities Commission (PUC) today said it will make improvements to demand response (DR) programs as part of its continuing effort to develop effective DR programs for the state's investor-owned utilities.

Demand response is defined as changes in electricity consumption by customers in response to signals in the form of electricity prices, incentives, or alerts during periods when the electricity system is vulnerable to extremely high prices or compromises to reliability.

The goals of the DR proceeding opened today include:

· Establishing a comprehensive set of protocols for estimating the load impacts of DR programs;

· Establishing methodologies to determine the cost-effectiveness of DR programs;

· Setting DR goals for 2008 and beyond, and developing rules on goal attainment; and

· Considering modifications to DR programs needed to support the California Independent System Operator's efforts to incorporate DR into market design protocols.

DR programs are an essential element of California's resource strategy, as articulated in the state's Energy Action Plan II (EAP II). EAP II has determined how energy resources should be deployed to meet California's energy needs and ranks DR programs second in the "loading order" after energy efficiency programs. The EAP II emphasizes the need for DR programs that result in cost-effective savings and the creation of standardized measurement and evaluation mechanisms to ensure verifiable savings. It directs the utilities to subscribe at least 5 percent of system peak demand to DR programs by 2007.

The Commission undertook a major effort to adopt effective DR programs in a previous proceeding (R.02-06-001). Since then, the Commission has significantly improved the role of DR programs in meeting California's energy needs, including the adoption of a pilot program to determine the demand elasticities of residential and small commercial customers by placing them on time-of-use and critical peak pricing tariffs. Commission Decision 03-06-032 adopted price-responsive DR programs for large customers and set annual participation goals for utility DR programs. The proceeding also initiated the Commission's exploration of advanced metering, "real-time" pricing, default critical peak pricing tariffs, and other DR program planning and implementation issues. The utilities have since submitted applications seeking deployment of advanced metering systems for all of their customers.

The work done in this new proceeding will be coordinated with efforts to measure and evaluate energy efficiency programs, forecast load for purposes of assuring resource adequacy, and calculate avoided costs.

For more information on the PUC, please visit www.cpuc.ca.gov.

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