25. Program and Budget Changes During 2010 and 2011
The February 2008 Guidance Ruling directs that future program development or modifications to existing demand response programs should be made through new applications to the Commission or petitions to modify the decision(s) in which a program was adopted.298 Several parties, including the applicants and the CAISO, suggest that it would be faster and more efficient for some program modifications or budget increase requests to be evaluated through the advice letter process.
25.1. Utility Proposals on Program and Budget Changes During 2010 and 2011
In its application, PG&E asserts that its demand response programs are likely to require revision during the 2009-2011 period to account for changes in the CAISO markets, among other possible developments.299 According to PG&E, changes to program tariffs and contracts to align them with CAISO user guides and tariffs should not go through the formal application process due to the length of time that process can take. PG&E recommends that the Commission allow the utilities to use an advice letter process to request program modifications. PG&E does not limit its request to changes needed to streamline programs and increase their consistency with the new CAISO market processes as they evolve, recommending that the Advice Letter process be available to change more than "unexpected features" of the new CAISO market. Specifically, PG&E requests that the Commission permit the utilities to request changes to demand response programs and aggregator contracts through Advice Letter filings.300 SCE generally supports this PG&E request.
PG&E asserts that the application process is time-consuming and if the changes being requested are within the overall funding approved for each specific category of programs and would not require an overall budget increase, the advice letter process should be used.301 PG&E also argues that the utilities need to retain the ability to revise programs by advice letter to reflect the operational changes required to coordinate with the new CAISO market, and later with the new CAISO market Release 1 or MAP (Market and Performance), without procedural delays.302 PG&E emphasizes its position that the advice letter review process used for past program modifications was not put in place to circumvent review; it was intended to expedite review to keep the programs current.
SDG&E offers extensive supporting arguments in support of its proposal to establish an annual process to modify demand response programs.303 SDG&E believes that the demand response portfolio, and customer acceptance and participation these programs, can be enhanced by the establishment of an annual advice letter process to request and approve program modifications.304 SDG&E proposes that the Commission authorize utilities to file an annual Advice Letter, no later than October 15 of each year during the 2009-2011 program cycle. The primary purpose of these annual Advice Letters would be to propose specific program changes, based on the utility's ongoing experience and customer feedback regarding demand response program operations, designed to enhance the portfolio of authorized demand response programs for succeeding years within the 2009-2011 program cycle.305 SDG&E recommends that the Commission issue a resolution or otherwise address the annual Advice Letter filings by January 1 of each year during the 2009-2011 program cycle. According to SDG&E, approval by January 1 of each year would enable SDG&E to maintain the continuity of its demand response program portfolio, incorporate any proposed and approved program changes, and communicate with its potential program participants with a lead time sufficient to allow those customers to address their internal issues and processes in advance of the summer demand response season.306
25.2. Party Positions on Methods for Program Modification
CAISO supports the utilities' request to use the advice letter process to expedite changes to utility programs, stating that "the Commission should support and allow the utilities to make adjustments to new demand response programs, or apply for new programs, via Advice letters."307 The CAISO contends that the utilities will need flexibility to adjust their programs as the CAISO adds additional functionality and enhancements for demand response resources as the new CAISO market develops.
25.3. Discussion
As described in General Order (GO) 96-B, the advice letter process provides an expedited process for review of utility requests that are expected to be neither controversial nor likely to raise important policy questions. GO 96-B explains further that the primary use of the advice letter process is to review a utility's request to change its tariffs in a manner previously authorized by statute or Commission order, to conform the tariffs to the requirements of a statute or Commission order, or to get Commission authorization to deviate from a utility tariff.308
This current applications proceeding provides the opportunity for utilities to present their demand response programs for the next three year cycle. The application process ensures appropriate review of the utilities' many demand response proposals, and provides an opportunity for interested parties and members of the public to provide input and make alternative proposals. The application process also allows the Commission to build an adequate record on which to determine what programs and related policies should be adopted for the next several years.
As the utilities propose changes to existing programs during the next program cycle it is important to preserve the ability to examine and receive party input on changes that would affect the total budget adopted in this decision, or would create new programs or program components (such as the creation or elimination of a new option under PG&E's PeakChoice or SCE's Energy Options Program) that have not been publicly evaluated. The advice letter process, which is intended for non-controversial updates or changes to existing programs, is not appropriate for the review of new programs or an increase in the total budget for a program area adopted in a decision. Such changes should be requested through a petition for modification of the decision adopting the program, for modifications to existing programs, or through a new application, for a new program. Changes to policies specifically adopted in this or another decision, such as the calculation of a settlement baseline for an existing program or rules for concurrent participation in multiple programs, should also be made through an application or petition for modification. Modifications of existing aggregator contracts should also be requested through a new application or petition for modification.
Rules for shifting of funds approved in this decision among already-approved programs are discussed in Section 26, below. In order to facilitate changes to streamline existing programs and improve their ability to function within the new CAISO market, we authorize the utilities to request other changes, including non-controversial changes to program tariffs and implementation procedures, via a Type 2 advice letter. If uncertain whether a particular change is appropriate for review through the advice letter process, utilities are encouraged to consult with Energy Division staff (and interested parties, if appropriate) before submitting an advice letter. The utilities' applications for the 2012-2014 period shall be filed by January 30, 2011.
298 Guidance Ruling February 2008, p. 10.
299 PG&E Exhibit 201, Chapter 3, pp. 16-17.
300 PG&E Exhibit 201, Chapter 3, pp. 16-17.
301 Opening Brief of Pacific Gas and Electric Company (U 39-E), January 28, 2009, at p. 15.
302 PG&E Opening Brief.
303 SDG&E Exhibit 102A, pp. 66-72.
304 SDG&E Exhibit 102A, p. 68.
305 SDG&E Exhibit 102A, p. 70.
306 SDG&E Exhibit 102A, p. 72.
307 CAISO Opening Brief.
308 GO 96-B at Part 5.
