ALJ/TJS/avs Date of Issuance 6/25/2010
Decision 10-06-034 June 24, 2010
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking Regarding Policies and Protocols for Demand Response Load Impact Estimates, Cost-Effectiveness Methodologies, Megawatt Goals and Alignment with California Independent System Operator Market Design Protocols. |
Rulemaking 07-01-041 (Filed January 25, 2007) (Phase 3) |
DECISION ADOPTING SETTLEMENT AGREEMENT ON
PHASE 3 ISSUES PERTAINING TO EMERGENCY TRIGGERED
DEMAND RESPONSE PROGRAMS
1. Summary
This decision adopts a Settlement Agreement (Settlement) among California Independent System Operator Corporation, California Large Energy Consumers Association, Division of Ratepayer Advocates, Enernoc, Inc., Pacific Gas and Electric Company (U 39-E), San Diego Gas & Electric Company (U 902-E), Southern California Edison Company (U 338-E) and The Utility Reform Network.1 In broad terms, the Settlement transitions many of the current reliability-based and emergency-triggered demand response programs into price-responsive demand response products. In addition, it reduces the amount of reliability-based and emergency-triggered demand response programs that count for Resource Adequacy from the current 3.5% of system peak to 2% of system peak in 2014. Even as the Settlement adopts caps on the amount of Megawatts (MW) that count for Resource Adequacy, the Settlement removes the current enrollment caps on reliability-based and emergency-triggered demand response program.
The transition to the price-responsive demand response program will begin in the Investor Owned Utilities' 2012-2014 demand response program cycle applications that are due in January of 2011, and the new demand response products are subject to Commission review at that time.
Under the Settlement, the reliability-based and emergency-triggered demand response programs will be changed to become more useful.2 Most importantly, the reliability-triggered demand response program will be triggered prior to the California Independent System Operator's canvassing of neighboring balancing authorities for energy or capacity. This new practice would eliminate the anomalous treatment whereby emergency-triggered demand response counts for Resource Adequacy yet, unlike all other power that counts for Resource Adequacy, the California Independent System Operator currently procures costly "exceptional dispatch energy or capacity" before using this energy resource, a practice that has led to charges that ratepayers "pay twice" for this power.
The Settlement also permits the development of new reliability-based demand response products, but any product eligible for a Resource Adequacy payment would be subject to the Resource Adequacy cap mentioned previously and review by the Commission.
The details of the settlement are discussed in greater detail below.
No comments were filed on the Settlement.
We find that the Settlement is reasonable in light of the whole record, consistent with law, and in the public interest. The settlement resolves all outstanding issues in Phase 3 of this proceeding.
1 The Settlement was attached to the Joint Motion of California Independent System Operator Corporation, California Large Energy Consumers Association, Division of Ratepayer Advocates, Enernoc, Inc., Pacific Gas and Electric Company (U 39-E). San Diego Gas and Electric Company (U 902-E) and Southern California Edison Company (U 338-E) and The Utility Reform Network for Adoption of Settlement; Settlement Attached (Joint Motion), filed on February 22, 2010.
2 Consideration of the transition to the new reliability-triggered/price-triggered demand response program will begin in the Investor Owned Utilities' 2012-2014 demand response program cycle applications that are due in January 2011, and these new demand response products are subject to Commission review at that time.
