22. SF Community Power Issues
22.1. Small Commercial Aggregation Pilot
In D.06-03-024, the Commission adopted a settlement that included approval of the Small Commercial Aggregation Pilot. The Settlement authorized SF Power to receive $500,000 in funds to cover marketing and expenses for enrolling small and medium commercial customers in the San Francisco Bay Area in the Demand Reserves Partnership Program.268 The original goal of the Small Commercial Aggregation Pilot was to shift 2 megawatts of load by the end of 2008. In D.06-11-049, SF Power was authorized to increase participation for the program to 5 megawatts of load reduction; this decision did not authorize an increase in the pilot's budget. Under this pilot, SF Power enrolled small and medium commercial customers into the Capacity Bidding Program. Based on a single 2008 test event conducted by PG&E, participants in the SCAP achieved a load reduction of approximately 1.4 megawatts.269 In A.08-06-003, PG&E proposed to discontinue the Small Commercial Aggregation Pilot on December 31, 2008. At the same time, the utility proposed its own Small Customer Load Aggregation Pilot, discussed in Section 11 above.
22.1.2. SF Power Litigation Position on Small Commercial Aggregation Pilot
SF Power protested the PG&E application on September 29, 2008, and filed written testimony on November 24, 2008. In its protest and its testimony, SF Power asserted that PG&E had not appropriately supported the Small Commercial Aggregation Pilot as ordered by the Commission in D.06-03-024 and D.06-11-049. Specifically, SF Power alleged that a quarter of the customers enrolled in the Small Commercial Aggregation Pilot by SF Power in 2006-2008 had not received meters from PG&E and so were unable to participate in the Small Commercial Aggregation Pilot. SF Power argued that the pilot should not be discontinued because PG&E's lack of support had kept the pilot from meeting its potential. The organization argued that despite this fact, depending on the baseline used, customers met the megawatt goals for the pilot during the one event that was called.270 In particular, SF Power argued that it was not able to fully investigate demand response issues related to small load aggregation because all meters were not timely installed and activated. To remedy its past behavior and allow the Small Commercial Aggregation Pilot an opportunity to complete its work, SF Power argued that PG&E should not be allowed to discontinue the Small Commercial Aggregation Pilot, and should be required to provide Smart Meters by April 1, 2009 to all customers that had been enrolled in the Small Commercial Aggregation Pilot prior to January 1, 2009. SF Power also requested that the utility provide the organization with real-time data to make program adjustments.271
As an alternative to PG&E's proposal for a new Small Commercial Load Aggregation Pilot, SF Power proposed that the Commission should authorize $675,000 for SF Power to extend the Small Commercial Aggregation Pilot, and should authorize it to supplement or replace PG&E's proposal for a new Small Commercial Load Aggregation Pilot.272 SF Power would use the funds for recruitment, customer care, enabling technology, and analysis of participants' usage, and proposed that results of the Small Commercial Aggregation Pilot could be available by 2010 (in contrast to 2011 for results of the PG&E proposed pilot).273
22.1.3. PG&E Litigation Position on Small Commercial Aggregation Pilot
In response to SF Power's claims about the Small Commercial Aggregation Pilot, PG&E asserted that it met its obligations to support the Small Commercial Aggregation Pilot under the decisions adopting and modifying the pilot. PG&E further contended that despite this support, the Small Commercial Aggregation Pilot was unsuccessful in that it did not meet its goals and was not cost effective. PG&E acknowledged that it did not install any additional meters after September 2008, noting that the pilot was scheduled to end in December 2008, and stating that meters installed after September 2008 were unlikely to be available to provide load reduction during an event called in the approved term of the pilot.274 The utility recommended that the Commission deny SF Power's request for installation of AMI meters in early 2009 because it would require the utility to revise its current AMI meter installation schedule.275
PG&E also argued that SF Power's proposal to extend the Small Commercial Aggregation Pilot instead of approving PG&E's Small Customer Aggregation Pilot should not be approved because the two pilots are not comparable. Specifically, PG&E argued that the PG&E pilot focuses on automated approaches that leverage AMI and enabling technologies whereas the Small Commercial Aggregation Pilot focuses on non-automated approach.276
22.1.4. Proposed Settlement Agreement on Small Commercial Aggregation Pilot
SF Power filed Case (C.) 08-10-015 on October 23, 2008. In that complaint, SF Power alleged that PG&E violated Commission orders by failing to adequately support the Small Commercial Aggregation Pilot. Both parties attended a Commission sponsored mediation of that case on March 10, 2009. At that mediation, parties agreed on a possible approach to resolve both C.08-10-015 and the issues in this proceeding related to the Small Commercial Aggregation Pilot. PG&E notified parties of a settlement conference to focus on the Small Commercial Aggregation Pilot in this proceeding, A.08-06-003. On March 25, 2009, the two parties to the Settlement Agreement filed a motion for approval of the Small Commercial Aggregation Pilot Settlement Agreement dated March 25, 2009, included with this decision as Attachment B.
PG&E and SF Power state that the settlement is intended to resolve all issues raised in the SF Power complaint proceeding A.08-10-015 (which are not addressed in this decision), and the issues specific to the Small Commercial Aggregation Pilot in the demand response applications proceeding.277 Among other terms, the proposed settlement provides the following:
· The Small Commercial Aggregation Pilot will continue through November 30, 2009.
· SF Power will not request Commission approval to extend Small Commercial Aggregation Pilot beyond November 30, 2009.
· PG&E will not install any additional meters for Small Commercial Aggregation Pilot participants beyond those in place when the settlement agreement was signed.
· PG&E will ensure that all meters already installed for Small Commercial Aggregation Pilot participants are activated by May 1, 2009.
· SF Power will withdraw its opposition to PG&E's Small Customer Load Aggregation Pilot described in PG&E's demand response application.
· PG&E will pay SF Power up to $12,500 per month from April 2009 through November 2009 for approved education and outreach activities for currently enrolled customers. The settlement contains a list of approved education and outreach activities. The $12,500 per month (for education and outreach to existing participants to study effective strategies for eliciting greater participation in demand response programs); this amount includes $3,000 per month that has already been authorized for SF Power's Small Commercial Aggregation Pilot program by the Commission through the 2008 Bridge Funding Decision (D.08-12-048), and is in addition to payments that SF Power and participants will receive under the Capacity Bidding Program rate schedule.278
· The parties agree to sign a contract that establishes a scope of work and terms of conditions, as well as appropriate education and outreach activities.
· During Capacity Bidding Program events called in 2009, PG&E will pay SF Power $16 per kilowatt for load reductions above 1.4 megawatts, up to 5 megawatts. The settlement describes the details of how the load reduction will be measured.
· The settlement further states that if no Capacity Bidding Program events or test events are called in 2009 then PG&E will call an event only for participants in the Small Commercial Aggregation Pilot to calculate a per kilowatt payment for SF Power. The maximum payment under this circumstance will be $60,000.
· SF Power will draft a report on Small Commercial Aggregation Pilot by December 31, 2009. The report will include, among other things, an overview of program performance with a description of activities used by the organization to improve customer performance. Additionally, the report will describe outreach methods and response to and success from different methods. Finally, the report will describe the practices employed for each market segment and recommendations to maximize participation during events. The settlement includes a list of additional aspects of the program that SF Power should attempt to evaluate.
· After November 30, 2009, the parties agree that SF Power shall continue to serve as an aggregator for Small Commercial Aggregation Pilot customers under the Capacity Bidding Program. PG&E will include Small Commercial Aggregation Pilot participant load reductions in its 2009 evaluation, measurement, and verification of Capacity Bidding Program.
· There are 72 customers identified by SF Power that qualify for Capacity Bidding Program, but are not equipped with an interval meter. PG&E agrees to allow qualified customers to enroll in its AC Cycling program, SmartAC. The utility also agrees to provide SF Power with information on energy efficiency programs and rebates for which Small Commercial Aggregation Pilot participants may be eligible.
As discussed in Section 16, above, in order to adopt a proposed settlement agreement, it is necessary to find that "the settlement is reasonable in light of the whole record, consistent with law, and in the public interest."279 No party filed any comments on or protests to the settlement. To determine the reasonableness of this uncontested settlement, we analyze it within the context of the initial litigation positions of the parties.
We find the settlement reasonable in light of the whole record, consistent with the law, and in the public interest. Small commercial customers have not traditionally been able to participate in demand response programs, and may require additional education and technical assistance to participate in order to do so.280 The Settlement Agreement proposes a total of $109,000 for education and outreach activities from January 2009 to November 2009, including the $3,000 per month already authorized in the Bridge Funding Decision.281 The alternative of continuing the SCAP program during the 2009-2011 period as originally proposed represents over $2 million in expenses.282 The settlement agreement provides a less expensive opportunity to gain knowledge that may help the utilities expand the demand response options available for small customers in the future.283 Moreover, based on the Settlement Agreement, SF Power will provide PG&E with a report that will describe which marketing methods are most effective in recruiting small customers, activities to improve customer performance, whether such activities should be market segmented, and SF Power's recommendations to maximize customer participation. The report will also provide the utilities with a greater level of detail about customer curtailment and the costs of education efforts in relation to curtailment performance.
One provision of the settlement is not entirely clear, and in order to avoid future confusion, we state our interpretation of that provision. Specifically the provision requiring a test event if no events are called before November 2009, does not fully explain the calculation of payments for that test event. Specifically, the proposed settlement states:
"If no [Capacity Bidding Program] events (or test events) are called during 2009 PG&E will call a SCAP specific test event to calculate the payment due under this section. The maximum payment under this section will be $60,000."284
The implication of this term is that the payment would be calculated in the same way that payments would be calculated for an actual event ($16 per kilowatt that PG&E will pay to SF Power for load reductions between 1.4 megawatts and 5 megawatts during actual events), but this is not clearly stated.285 Given that these parties have struggled with the meaning of the language in previous decisions, we require that the calculation of payment for a pilot-specific test event under this provision, if one is needed, shall be calculated in the same way as payment for a test event. With this clarification, we find the settlement reasonable and adopt it.
22.2. Additional SF Power Issues
In addition to its proposal to continue the Small Commercial Aggregation Pilot and its comments on various demand response programs considered in the discussions of these programs, SF Power also makes several other proposals. SF Power suggestions include advocating adoption of a demand response pilot program focused on municipal water pumping, providing access to the Technical Incentives program to participants in this pump load pilot, and allowing commercial customers to consolidate multiple meters at a single facility into one meter. SF Power also advocates for the replacement of APX as the provider of Web-based services to demand response participants and aggregators; this proposal is not sufficiently described and supported and will not be adopted.
SF Power requests approval for a pilot to examine the potential to obtain demand response by automating certain water pumps of municipalities and water districts. SF Power argues that water pumps are well suited to installation of automated demand response technologies, and could be a source of peak load savings.286 SF Power requests $400,000 to support this pilot.
PG&E argues that a pilot focusing on the application of automated demand response to water pumps, or any single end use, is premature.287 PG&E also asserts that because water pumps are already subject to time of use rates that discourage use at peak times, "electric pumps typically do not operate during peak hours."288 Because of this, PG&E states that a pilot of the design proposed by SF Power is unlikely to show a significant amount of demand response.289
The water pumping pilot proposed by SF Power is designed to focus on a very narrow subset of customers, and the pilot proposal is not detailed. Given the narrow focus of the proposed pilot and the fact that customers eligible for the pilot are already subject to time of use rates that encourage off-peak use, it is unlikely that this pilot would show significant savings, and we decline to adopt it at this time.
SF Power proposes that, as PG&E installs advanced meters within its service territory, commercial customers that have more than one meter at a single facility should be allowed to consolidate those meters into a single meter that serves the entire facility. SF Power further suggests that customers electing to consolidate meters should be paid an incentive related to the amount saved on the installation of additional AMI meters. SF Power argues that this would save ratepayers from financing the potentially substantial costs of replacing "unnecessary" meters throughout the PG&E service territory, and would save individual customers that currently have multiple meters any costs associated with the operation of those meters, potentially including extra customer charges. SF Power also asserts that having a single meter for all load at a given facility would simplify participation in demand response programs for some customers, leading to increased demand response and lower energy charges for those customers, among other possible positive effects.290
PG&E objects to this proposal, asserting that the cost of an advanced meter is fairly low, so the cost savings from meter consolidation would not be high. PG&E also contends that the work required to upgrade wiring and electrical panels to accommodate a larger, single meter for a facility that currently has two or more smaller meters is potentially expensive. For these reasons, PG&E asserts that an incentive of half of the cost of the meter savings would be insufficient to encourage customers to pay for the necessary rewiring to make consolidation possible.291
This is an interesting proposal, however, there is little information available at this time on either the costs or the benefits of this program. In addition, no party has offered specific information to show that customers are interested in consolidating their meters, and it is not clear whether doing so would actually encourage demand response. We decline to adopt this proposal at this time. If SF Power or another party makes a similar proposal in the future, it should be supported by additional information on costs, benefits, and levels of customer interest.
268 D.06-03-024, Decision Adopting Settlement of the IOUs Applications for Approval of Demand Response Programs for 2006-2008, March 15, 2006, p. 14.
269 Settlement Agreement Between Pacific Gas and Electric Company and San Francisco Community Power, March 25, 2009, pp. 1-2.
270 SP Power Exhibit 801, p. 17.
271 SP Power Exhibit 801, pp. 17-20.
272 SP Power Exhibit 801, p. 23.
273 SP Power Exhibit, p. 24.
274 Opening Brief of Pacific Gas and Electric Company Regarding San Francisco Community Power Proposals, February 4, 2009, p. 6.
275 PG&E Opening Brief on SF Power, p. 9.
276 PG&E Opening Brief on SF Power, p. 10.
277 Motion to adopt settlement agreement on Small Commercial Aggregation Pilot March 25, 2009.
278 Motion of PG&E and SF Power for Approval of Settlement Agreement, March 25, 2009, p. 6.
279 Commission Rules of Practice and Procedure, Rule 12.1(d).
280 PG&E Exhibit 201, Chapter 2, p. 58 and February 2008 Guidance Ruling in R.07-01-041, p. 22.
281 Settlement Agreement Between PG&E and SF Power, March 25, 2009, p. 4 and February 2008 Guidance Ruling in R.07-01-041, p. 24.
282 Motion of PG&E and SF Power for Approval of Settlement Agreement, March 25, 2009, p. 4.
283 February 2008 Guidance Ruling in R.07-01-041, p. 22.
284 Settlement Agreement Between Pacific Gas and Electric Company and San Francisco Community Power, March 25, 2009, p. 5.
285 $60,000/ $16/kW = 3,750 kW or 3.75 MW. 3.75 MW + 1.4 MW = 5.15 MW
286 SF Power Opening Brief, p. 27.
287 PG&E Opening Brief on SF Power, p. 11.
288 PG&E Opening Brief on SF Power, p. 12.
289 PG&E Opening Brief on SF Power, p. 12.
290 SF Power Opening Brief, pp. 30-31.
291 Opening Brief on SF Power proposals, February 4, 2009, pp. 13-14.
