2. Procedural Background

In Decision (D.) 06-03-024, the California Public Utilities Commission (Commission) approved Demand Response activities and budgets for SCE, SDG&E, and PG&E for 2006 through 2008, and required these utilities to file utility-specific demand response program and budget applications for the 2009 to 2011 time period by June 1, 2008. On February 27, 2008, a Guidance Ruling provided specific instructions to the utilities on the expected scope and contents of those applications. On April 11, 2008, Commissioner Rachelle B. Chong issued joint guidance with Commissioner Dian M. Grueneich on how joint energy efficiency and demand response programs should be addressed in the demand response and energy efficiency program and budget applications.¹ On June 2, 2008, the utilities filed the applications captioned above, Application (A.) 08-06-001 (by SCE), A.08-06-002 (by SDG&E), and A.08-06-003 (by PG&E).

On July 2, 2008, the Administrative Law Judge (ALJ) assigned to these applications issued a ruling that consolidated the applications and confirmed a due date of July 9, 2008, for protests or responses. Many parties filed protests or responses to these applications,² and all three utilities filed replies on July 21, 2008. In addition, Commission staff performed a review of the applications to determine whether they complied with the requirements of the earlier guidance rulings. Energy Division staff also met with each utility separately between June 27 and July 1, 2008, to describe general deficiencies in each application. The utilities were informed at that time that the ALJ would issue a ruling directing the deficiencies to be corrected.

On August 6, 2008, the assigned ALJ issued a ruling requiring the utilities to file amended applications by September 8, 2008, to correct deficiencies in the originally filed applications. That ruling also required protests to those amended applications to be filed by September 18, 2008, and scheduled a prehearing conference (PHC) for September 24, 2008. A later ALJ ruling modified these deadlines, with the amended applications due September 19, 2008, protests and responses due on September 29, 2008, and the PHC on October 1, 2008.

On September 5, 2008, the utilities filed a motion for funding and authorization to operate demand response programs and pilots in 2009 (the Bridge Funding Motion) requesting that the Commission issue a decision in November 2008 approving, among other things, the continuation of existing demand response programs and the implementation of certain demand response pilots in early 2009. At the PHC on October 1, 2008, parties discussed both the Bridge Funding Motion and the scope and schedule for the review of the full applications. The Scoping Memo in this proceeding, issued on November 10, 2008, defined the scope and schedule for resolving both the Bridge Funding Motion and the main portion of the proceeding, among other issues. On December 18, 2008, the Commission issued D.08-12-038, approving the Bridge Funding Motion with modifications; this decision authorized the utilities to continue certain demand response programs through 2009 or until a decision is issued on the programs and budgets for 2009-2011 in the main portion of this proceeding.

Hearings were held January 6-9 and January 20, 2009. Parties filed opening briefs on most issues on January 28, 2009,³ with opening briefs on San Francisco Community Power and Transphase issues filed on February 4, 2009.⁴ Parties filed reply briefs on February 11, 2009.⁵ The assigned ALJ requested additional information on cost effectiveness calculations to be filed February 23, 2009, with party comments March 2, 2009. All three applicants filed additional information, and CLECA filed responses on March 2, 2009. With the permission of the assigned ALJ, all three applications filed replies to the CLECA responses on March 5, 2009.

SCE, DRA, EnerNOC, and Alternative Energy Resources, Inc. (AER) filed a settlement agreement on February 23, 2009, proposing the adoption of certain demand response contracts between SCE and third-party aggregators. The record was closed and the proceeding was submitted on March 5, 2009. Subsequently, PG&E filed two motions on March 25, 2009. The first motion requested adoption of a settlement agreement between PG&E and SF Power resolving issues related to the Small Commercial Aggregation Program and asking for a waiver of the time limit for filing a settlement contained in Rule 12.1(a),⁶ and the second requested that the time for responding to the first motion be shortened from 30 days to seven days. ALJ Hecht granted the request to waive the time limit for filing a settlement, and shortened the comment periods on the settlement agreement. No comments were filed on this settlement agreement.

Also on March 25, 2009, Energy Curtailment Specialists (ECS) filed timely comments on the settlement agreement filed on February 23, 2009, related to the SCE demand response contracts. The comments filed by ECS opposed the adoption of the settlement agreement unless certain terms agreed upon in the settlement agreement that are beneficial to the aggregators are adopted for the proposed SCE/ECS contract, also. Both SCE and DRA filed reply comments objecting to the ECS request that the Commission either reject the settlement on aggregator contracts or apply certain terms to the ECS contract, also. SCE and ECS filed a motion asking to withdraw the ECS contract from consideration in this proceeding on April 17, 2009. The record was resubmitted on April 17, 2009.

¹ Joint Assigned Commissioner Ruling Providing Guidance on Integrated Demand Side Management, April 18, 2008.

² The following parties filed protests or responses to applications A.08-06-001 et al.: the Alliance for Retail Energy Markets (AReM), the California Independent System Operator (CAISO), California Large Energy Consumers Association (CLECA), Chapeau Inc., dba Blue Point Energy (BluePoint), ConsumerPowerline, Inc., the Division of Ratepayer Advocates (DRA), Ice Energy, Inc., Kinder Morgan Energy Partners LP, The Utility Reform Network (TURN), Transphase Inc. (Transphase), and jointly by Comverge Inc., EnerNOC Inc. (EnerNOC), and EnergyConnect, Inc. (EnergyConnect).

³ The following parties filed opening briefs on January 28, 2009: BluePoint, the California Demand Response Coalition (CDRC), TURN, DRA, CPower, CAISO, Chapeau, CLECA, PG&E, SCE, and SDG&E.

⁴ The following parties filed opening briefs on February 4, 2009: SF Power, Transphase, PG&E (on SF Power issues), and PG&E, SCE, SDG&E (jointly, on Transphase issues).

⁵ The following parties filed reply briefs on February 11, 2009: BluePoint, San Francisco Community Power (SF Power), CAISO, CPower, Energy Curtailment Specialists, Transphase, Chapeau, SDG&E, DRA, TURN, CDRC, PG&E, CLECA, and SCE.

⁶ All references to Rules are to the Commission's Rules of Practice and Procedure.