ALJ/JHE/avs Date of Issuance 3/12/2010
Decision 10-03-007 March 11, 2010
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of Pacific Gas and Electric Company (U 39-E) for Approval of Demand Response Agreements. |
Application 07-02-032 (Filed February 28, 2007) |
Southern California Edison Company's (U 338-E) Application for Approval of a Demand Response Resource Purchase Agreement for 2007 and 2008. |
Application 07-02-033 (Filed February 28, 2007) |
DECISION DENYING PETITION FOR MODIFICATION OF
DECISION 07-05-029 AND REJECTING EXPANSION
OF AN EXISTING DEMAND RESPONSE CONTRACT
This decision denies Pacific Gas and Electric Company's (PG&E) Petition for Modification of Decision (D.) 07-05-029 (PfM or Petition), which seeks to increase the amount of demand response available under an existing demand response contract between PG&E and Energy Curtailment Specialists, Inc. (ECS). The Petition requests an expansion of the amount of load reduction available in the ECS contract without changes to other contract terms, and asserts that because the original contract was found cost effective, the expanded contract will remain cost effective. We deny this Petition and reject the contract expansion both because the cost effectiveness of the request is not clear, and because certain provisions of the existing contract, which would be retained in the proposed contract expansion, conflict with current demand response policies adopted in D.09-08-027. That decision adopted budgets, activities, and policies for utility demand response for 2009-2011, and updated Commission policies on appropriate settlement baselines, dual participation rules, and other characteristics for demand response activities. We encourage PG&E to include contract terms that conform with policies adopted in D.09-08-027 in future requests to modify existing contracts.
1. Procedural Background
The Commission encourages California's electric utilities to decrease electricity usage at times of peak system demand through the development of new demand response programs. Customers enrolled in demand response programs receive incentives such as payments or lower electric rates in return for committing to reduce their electricity usage under certain specified circumstances. In Decision (D.) 06-11-049, the Commission directed Southern California Edison Company (SCE) and Pacific Gas and Electric Company (PG&E) to issue Requests for Proposals (RFPs) from third parties that could administer demand response programs and provide megawatts beyond those available from the electric utilities' own programs. PG&E's RFP resulted in five contracts with third parties that agreed to provide demand response megawatts to the utility by working with customers to enable them to shed load when necessary, aggregating the resulting demand response potential and delivering it according to contract provisions. As a result of the RFP process, PG&E filed Application (A.) 07-02-032, requesting Commission approval of five agreements with demand response aggregators. The Commission approved these contracts, and a similar application for additional contracts filed by SCE, in D.07-05-029, on May 3, 2007. The five agreements between PG&E and third-party aggregators approved in D.07-05-029 were with AER, Ancillary Services Coalition, EnergyConnect, Energy Curtailment Specialists (ECS), and EnerNOC, Inc. These agreements provide PG&E with 35 - 46 megawatts (MW) of demand response by August 2007, between 107 and 129 MW by August 2008 and between 132 and 149 MW during May through October of 2009 through 2011. Each agreement specifies a megawatt commitment level, and each demand response aggregator receives a capacity payment whether or not the program is called. When the program is called, each aggregator receives an energy payment for demand reductions up to its commitment level. These contracts have been in place since the 2007 summer season, with modifications to some contracts approved by the Commission in 2007 and 2008.
On February 13, 2009, PG&E filed this Petition for Modification (PfM or Petition) to increase the load reduction available under the ECS demand response contract approved in D.07-05-029. On March 13, 2009, ECS filed a response in support of the PG&E Petition, and on March 16, 2009, the Division of Ratepayer Advocates (DRA) filed a protest urging the Commission to reject the Petition. With permission from the Administrative Law Judge (ALJ) assigned to this proceeding, PG&E filed a reply to the DRA protest on March 26, 2009. PG&E bears the burden of proof that its Petition is reasonable, cost effective, and in the public interest.
