2. Description of Proposed Contract Modification
In this Petition, PG&E requests approval to expand an existing bilateral contract to allow ECS to provide more demand response than originally allowed under that contract. PG&E asserts that the contract in its current form is cost effective, and that ECS's performance under the contract showed improvement in 2008 over 2007, with one test event in 2008 achieving a demand response load reduction of 99 percent of its commitment level for that year. Based on the fact that ECS is meeting its commitments, PG&E believes that an increase in the commitment level of the contract would provide actual increases in the amount of demand response over the terms of the contract, while remaining cost effective.1 Under the proposed modification to the contract, ECS would increase the load it commits to provide during called events in 2009 by 37.5%, in 2010 by 35%, and in 2011 (the final year of the contract) by 50%. The new commitment levels under the modified contract would be as follows:2
Proposed |
Commitment Level (in Megawatts) | ||
Month |
Increase |
Contract |
Proposed |
May 2009 |
37.5% |
30.0 |
41.3 |
June 2009 |
37.5% |
30.0 |
41.3 |
July 2009 |
37.5% |
32.0 |
44.0 |
August 2009 |
37.5% |
32.0 |
44.0 |
September 2009 |
37.5% |
34.0 |
46.8 |
October 2009 |
37.5% |
35.0 |
48.1 |
May 2010 |
35% |
40.0 |
54.0 |
June 2010 |
35% |
40.0 |
54.0 |
July 2010 |
35% |
40.0 |
54.0 |
August 2010 |
35% |
40.0 |
54.0 |
September 2010 |
35% |
40.0 |
54.0 |
October 2010 |
35% |
40.0 |
54.0 |
May 2011 |
50% |
40.0 |
60.0 |
June 2011 |
50% |
40.0 |
60.0 |
July 2011 |
50% |
40.0 |
60.0 |
August 2011 |
50% |
40.0 |
60.0 |
September 2011 |
50% |
40.0 |
60.0 |
October 2011 |
50% |
40.0 |
60.0 |
Both PG&E and ECS argue that the modifications to the contract are in the public interest because they would increase the amount of cost effective demand response available to PG&E, consistent with Commission policies such as the loading order, which give priority to energy efficiency, demand response, and other demand side management options over increased generation. PG&E further notes that D.07-05-029 found the ECS contract to be cost effective, and argues that this expansion, which would increase benefits and incentive costs but not administrative costs, should improve the overall cost effectiveness of the contract.3 ECS supports the contract amendment, noting that ECS has actually delivered a large portion of the load reduction that it committed to provide, and assuring us that it can be counted on to provide reliable load reductions in the future.4
1 PG&E Petition for Modification of Decision 07-05-029, at 3.
2 PfM at 4.
3 PfM at 5.
4 ECS response to PfM, 3/13/2009, at 4-5.
