I. INTRODUCTION
In this Order we dispose of the application for rehearing of Decision
(D.) 09-08-027 (or "Decision") filed by Transphase Company ("Transphase").
The Decision adopted 2009-2011 demand response ("DR") activities and budgets for Pacific Gas & Electric Company ("PG&E"), Southern California Edison Company ("SCE"), and San Diego Gas & Electric Company ("SDG&E") (collectively, "the utilities"). The total combined budget adopted for the three utilities is $349,509,463. The funding will support a range of DR programs and activities, including Emergency Programs, Price Responsive Programs, Individual Utility Programs, Emerging Markets and Technologies Programs, Marketing, Education, and Outreach, and various Pilot Programs for 2010-2011.
We also evaluated various Permanent Load Shifting ("PLS") proposals submitted by the utilities and two third-party vendors, Ice Energy and Transphase. Permanent load shifting occurs when a customer moves energy usage from one time period to another on an ongoing basis. Permanent load shifting can be achieved by storing electricity produced during off-peak hours and then using the stored energy to support load during periods when peak energy use is typically high.1 We have supported investment in certain PLS technologies as a means to encourage load shifting. Examples of PLS technologies include thermal energy storage ("TES"),2 battery storage, and the pumping and storage of water.
We declined to authorize new utility PLS solicitations at this time. However, we did authorize the utilities to continue their existing pilot PLS contracts approved in Resolution E-4098.3 We denied Ice Energy's proposal because it lacked detailed analysis or implementation plans necessary to evaluate the cost-effectiveness, benefits and overall quality of the proposal.4 Our Decision also denied the Transphase TES proposal because it was not clear that the proposal was cost-effective or in the public interest.5
Transphase filed a timely application for rehearing challenging the Decision on the grounds that it: (1) violates Public Utilities Code sections 454.5 and 454.55;6
(2) errs in its finding regarding cost-effectiveness; (3) wrongly applies a "least cost, best fit" approach; (4) is anti-competitive; and (5) refuses to regulate. A response to the application was filed by PG&E, SDG&E, and SCE (jointly).
We have carefully considered the arguments raised in the application for rehearing and are of the opinion that while the Decision is lawful, it would benefit from modifications to clarify the evidentiary support for our finding regarding Transphase's TES proposal. Good cause has not been established to grant rehearing. Accordingly, we deny the application for rehearing of D.09-08-027, as modified herein, because no legal error has been shown.
1 See D.09-08-027, at p. 167.
2 Thermal energy storage draws electricity during off-peak hours, which is then stored in the form of thermal energy in ice, chilled water, or a eutectic salt solution. The stored energy can be used during peak hours, generally to cool buildings without drawing additional electricity from the power grid during the day.
3 D.09-08-027, at p. 171. In Order Adopting Changes to 2007 Utility Demand Response Programs [D.06-11-049] (2006) __Cal.P.U.C3d __, at p. 52 (slip op.), we authorized initial utility expenditures to pursue PLS projects and directed the utilities to conduct a request for proposals ("RFP") competitive solicitation process. In Resolution E-4098, dated July 26, 2007, we evaluated the results of the solicitation and authorized particular projects. Because we view many PLS technologies as new and emerging markets, the approved utility projects were deemed pilots subject to further evaluation regarding issues such as cost-effectiveness, ease of implementation, the amount of load shifting that can be obtained, potential for growth and expansion, and reliability of the technology. (Resolution
E-4098, at p. 23 [Findings of Fact Nos. 3, 7 & 8].)
4 D.09-08-027, at p. 173.
5 D.09-08-027, at pp. 179-180.
6 All subsequent section references are to the Public Utilities Code unless otherwise stated.
