9. Policy on Development of Emergency-triggered and Price Responsive Demand Response Activities
The utility demand response programs funded through this proceeding constitute only a portion of related demand response and dynamic pricing activities currently operating or proposed to operate in California. Additional demand response activities have been approved in separate Commission proceeding, and some continue to be funded through utility General Rate Cases, advanced metering infrastucture decisions, and other applications. The demand response funding approved in this application comprises approximately one quarter to one third of the total funding available to support demand response; the following table provides a comparison of funding authorized in this decision with the approximate total funding available:
Utility |
2009 - 011 DR Program Budgets Approved in Application |
PG&E, SCE and SDG&E 2009 - 2011 DR Program Budgets Recovered in Other Proceedings |
Total CA IOU Estimated DR Program Budgets 2009-2011 |
PG&E |
$109,060,072 | ||
SCE |
$188,806,349 | ||
SDG&E |
$51,643,042 | ||
Total |
$349,509,463 |
$858,638,025 |
$1,208,147,488 |
Note: The Total DR Program Budget Estimate does not include $5.6 Billion for PG&E, SCE and SDG&E for the combined cost of AMI hardware | |||
The total expected load impact of the demand response activities discussed in this decision, some of which are funded elsewhere, are as follows:
PG&E Load Impact - Application Filing (Sept. '08) Monthly System Peak Load in July under 1-in-2 Weather Year Condition (MWs)
2009 2010 2011 Reliability Program
BIP 259.8 259.8 * OBMC/SLRP ** ** ** Smart AC*** 151.9 224.3 306.6 DWR*** 200 200 200 Total Reliability Prog. 611.7 684.1 506.6
Price Response Program
DBP 8.2 * * CPP 19.9 19.8 19.4 Smart Rate*** 51.8 145 295 PeakChoice: Committed Load- DO 9.6 10.1 271.1 PeakChoice: Committed Load - DA 14.3 18.4 21.4 PeakChoice: Best Effort 12.4 31 31.6 Total Peak Choice 36.3 59.5 324.1 Total Price Response Prog. 116.2 224.3 638.5
Service Provider (Aggregators) Managed Prog.
CBP 18.3 18 17.6 AMP 124.6 141.4 143.8 Total Service Provider (Aggregators) Managed Prog. 142.9 159.4 161.4
Other
Permanent Load Shift (PLS) 2.1 3.9 3.9 Total Other 2.1 3.9 3.9
PG&E Total All DR Programs 872.9 1,071.70 1,310.40 Reference PG&E 2009-2011 Demand Response Programs and Budgets amended Prepared Testimony, September 19, 2008, Table 2-1 *MWs for this group of customers are merged with the PeakChoice in this table. **SLRP has not had a participant since 2005. OBMC does not count towards RA and is not included in the cumulative total (around 11 MW of participation). ***Budget was not requested in this proceeding (A.08-06-003). Note: Pursuant to D.08-04-050, PG&E filed an updated Load Impact Report on May 1 2009, which is not reflective in this table. SDG&E Load Impact - Application Filing (Sept. 2008) |
|||||||||||
Annual Peak Day under 1-in-2 Weather Year Condition |
|||||||||||
(MWs) |
|||||||||||
|
2009 |
2010 |
2011 |
||||||||
Reliability Program |
|
|
|||||||||
BIP |
5 |
5 |
5 |
||||||||
OBMC/SLRP |
0 |
0 |
0 |
||||||||
Summer Saver Residential* |
13 |
16 |
16 |
||||||||
Summer Saver Small Commercial* |
8 |
10 |
10 |
||||||||
Total Reliability Prog. |
26 |
31 |
31 |
||||||||
|
|
|
|||||||||
Price Response Program |
|
|
|||||||||
CPPD - Medium C&I (20-200 kW)* |
0 |
0 |
16 |
||||||||
CPPD - Large C&I (>200 kW)* |
58 |
60 |
61 |
||||||||
CPPE |
2 |
2 |
2 |
||||||||
PTR- Residential* |
0 |
50 |
95 |
||||||||
PTR - Small C&I (<20 kW)* |
0 |
3 |
8 |
||||||||
Total Price Response Prog. |
60 |
115 |
182 |
||||||||
|
|
|
|||||||||
Service Provider (Aggregators) Managed Prog. |
|
|
|||||||||
CBP-DA |
14 |
17 |
20 |
||||||||
CBP-DO |
3.5 |
4.2 |
4.9 |
||||||||
Total Service Provider (Aggregators) Managed Prog. |
17.5 |
21.2 |
24.9 |
||||||||
|
|
|
|||||||||
Other |
|
|
||||||||||||
Permanent Load Shift (PLS) |
2 |
2 |
2 |
|||||||||||
TI - Auto DR |
8 |
16 |
24 |
|||||||||||
TI - Non Auto DR |
6 |
12 |
18 |
|||||||||||
Total Other |
16 |
30 |
44 |
|||||||||||
|
|
|
||||||||||||
SDG&E Total All DR Programs |
120 |
197 |
282 |
|||||||||||
Reference |
||||||||||||||
2009-2011 MWs from Amended Application of SDG&E for Approval of DR Programs and Budgets |
||||||||||||||
For Years 2009 through 2011, Sept. 19, 2008, Volume IV of VI, pg 8. |
||||||||||||||
2007 MWs from Amended Application of SDG&E for Approval of DR Programs and Budgets for |
||||||||||||||
Years 2009 through 2011, Sept. 19, 2008, Volume IV of VI, pg 18 Table KS-9. |
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*Budget was not requested in this proceeding (A08-06-002). |
||||||||||||||
Note: Pursuant to D.08-04-050, SDG&E filed an updated Load Impact Report on May 1 2009, which is not reflective in this table. SCE Load Impact Top 20 Highest System Load Days under 1-in-2 Weather Year (MWs)
2009 2010 2011 Reliability Program
BIP*** 774.7 855.8 945.4 OBMC/SLRP * * * SDP*** 529.5 533.3 537.2 AP-I 40.0 41.3 42.2 Total Reliability Prog. 1,344.2 1,430.4 1,524.8
Price Response Program
DBP 16.9 16.9 16.9 CPP * * * RTP 10.2 10.5 10.9 Total Price Response Prog. 27.1 27.4 27.8
Service Provider (Aggregators) Managed Prog.
CBP 46.3 48.9 51.8 DR Contracts** 106.0 170.0 210.0 Total Service Provider (Aggregators) Managed Prog. 152.3 218.9 261.8
SCE Total All DR Programs 1,523.6 1,676.7 1,814.4 Reference 2009-2011 MWs from SCE Appendices A through M, Sept. 19, 2008, Appendix F, pg 4. * SCE did not apply LI Protocols due to the lack of ex post data, with which to perform ex ante estimates. **SCE did not forecast service account enrollment, nor apply LI Protocols. Assumed the contractual capacity of each DR contract. ***MWs amount should be lower because of the cap in emergency program. Note: Pursuant to D.08-04-050, SCE filed an updated Load Impact Report on May 1, 2009, which is not reflective in this table. |
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9.1. Price Responsive Demand Response Activities
Since 2003, this Commission has emphasized the importance of price-responsive demand response as a key component of our overall demand response policy. While emergency-triggered demand response plays an important role in improving the reliability of our grid, price-responsive demand response can lower overall wholesale electricity costs for all customers as well as help mitigate wholesale market power. Additionally, reducing consumer electricity usage during peak periods can help reduce fuel use and overall air emissions. The CAISO's implementation of its new markets makes price-responsive demand response even more important to pursue since demand response can now participate in more markets and, in the future, on a locational basis.
The development of dynamic pricing rates, such as default critical peak pricing, is consistent with our emphasis on price-responsive demand response, and we have made recent progress in this area through our utility general rate case proceedings. For example, default critical peak pricing was implemented in SDG&E's territory in 2009 for all customers with loads of 20 kilowatts or more that have advanced meters. PG&E and SCE have default critical peak pricing rates under our consideration.
The price-responsive programs adopted in this decision also play an important role in our efforts to increase price-responsive demand response. Since CAISO's implementation of its new markets, such programs have the potential to be aligned with wholesale markets. Our 2008 Energy Action Plan Update emphasizes the importance of such alignment, noting that retail demand response programs should be modified so that they can more fully participate in CAISO's new wholesale market structure.48
We also believe that customers should be provided with the necessary tools so that adjustments to their electricity usage in response to price-responsive demand response programs are simple to understand and easy to implement. Effective customer education, along with automated demand response and enabling technologies, are tools that may contribute to the growth of demand response in California, and make demand response activities more effective and useful.
9.2. Emergency-triggered Demand Response
Emergency-triggered demand response activities are programs that are triggered by the utilities in response to an actual or imminent declaration by CAISO of a system emergency, or during, or in anticipation of, a local transmission or distribution emergency. Historically, emergency-triggered demand response programs have provided load reductions only when CAISO declares a Stage 2 emergency. Emergency-triggered programs have been used to maintain system reliability while avoiding other emergency responses such as rolling blackouts. The Commission has signaled its intention to emphasize price responsive programs and dynamic pricing tariffs in the future, in part in an effort to integrate demand response with the CAISO's new markets.
Currently these programs account for approximately 2,000 megawatts. In this and other recent proceedings, CAISO has sought access to these resources prior to a Stage 2 emergency. In 2008, the Commission initiated Phase 3 of R.07-01-041 to examine more closely the amount and type of emergency-triggered demand response that is needed for system reliability and may appropriately be triggered in response to a system Stage 1, 2, or 3 emergency, and the amount that can or should be transitioned to price-responsive triggers more integrated with the CAISO's new markets. Phase 3 of R.07-01-041 is intended to determine the direction for emergency-triggered programs, such as the appropriate amount of capacity (in megawatts) to enroll in these programs and how to transition any excess capacity to non-emergency programs with price responsive triggers integrated with the CAISO's new markets.
Since the initiation of Phase 3, the utilities filed advice letters that were approved in Resolution E-4220, modifying the trigger for the statewide Base Interruptible Program to include a new event trigger. As a result, Base Interruptible Program events may be triggered when CAISO provides notice that a Stage 1 Emergency is imminent. As before, the Base Interruptible Program can still be triggered with a Stage 2 alert from CAISO.
In their applications, the utilities propose the expansion of several existing demand response programs, including those that currently can only be triggered in a Stage 2 CAISO Emergency. In response, DRA and CAISO raise concerns regarding the optimal size for the total interruptible programs, and urge the Commission to determine if the emergency interruptible programs should be capped between 500 megawatts and 800 megawatts. We find that reducing the amount of emergency-triggered demand response is currently under consideration in another proceeding and is beyond the scope of this proceeding, as argued by SCE. In its comments on the proposed decision in this proceeding, PG&E and other utilities argue that capping these programs at their current levels is also beyond the scope of this proceeding.49 However, this is not the case. The scope of this proceeding includes determining which programs should be continued in 2009 through 2011, and the appropriate budgets for those programs. Modifications to the size, design characteristics, and funding of individual programs based on factors such as their cost effectiveness, flexibility and other attributes is a primary purpose of this proceeding.
In recognition of the ongoing examination of the appropriate size and role of emergency programs in R.07-01-041 Phase 3, we decline to expand existing emergency-triggered programs or adopt new emergency programs with similarly limited triggers. Instead, we cap these programs at their current enrollment (in megawatts) and funding levels pending the resolution of R.07-01-041 Phase 3, with a limited exception for the PG&E SmartAC program. If necessary, utilities may use waiting lists or other methods of tracking customer interest to assist them in maintaining programs at their current size and replacing megawatts lost from these programs through attrition. The specific requests are addressed in more detail below. As discussed below, minor changes to ensure consistency in program characteristics (such as settlement baselines) are made here, but expansion or replacement of these programs is postponed until the underlying policy issues are addressed in R.07-01-041.
48 Energy Action Plan - 2008 Update, February 2008, p. 14.
49 Opening Comments of Pacific Gas and Electric Company on Proposed Decision, July 20, 2009. Page 7.
