3.1. Use of Confidential Data and Proprietary Models and Information
The initial straw proposal submitted jointly by SCE, PG&E, and SDG&E in the summer of 2007 proposed the use of confidential data and several software models that the utilities hold as proprietary for many aspects of the cost-effectiveness calculations. The utilities proposed using confidential data for various costs associated with electric generation and sale, and for the proprietary models used to estimate avoided costs, including inputs to the combustion turbine simulation used to calculate avoided electric generation costs. All three utilities argue that the use of confidential data and proprietary models best capture their actual costs, and allow for more accurate cost and benefit estimates by reflecting each company's specific local and business conditions. The utilities maintain that the use of confidential and proprietary data and models is justified by the increased accuracy of the results.5
Several parties, particularly demand response aggregators, assert that any potential for increased accuracy through the use of confidential data and proprietary models is outweighed by the lack of transparency to other parties introduced by the use of these non-publicly available data sources. Demand Response aggregators EnerNOC, Inc., EnergyConnect, Inc., and Comverge, Inc. (together, the Joint Parties), note that "transparency in the inputs, assumptions, analysis, and ultimately evaluations resulting from the application of adopted [demand response] cost-effectiveness methods will be critical to establishing the credibility of, and creating confidence in, those results."6 Parties note that the use of publicly available data would allow parties to confirm and, if necessary, duplicate the cost-effectiveness analysis.
Both the Consensus Framework and the 2008 Staff Proposal would have allowed the utilities to use confidential data and proprietary models in cost-effectiveness analyses, and consistent with the Consensus Framework, the utilities used such data instead of publicly available information in the cost-effectiveness analyses included in their 2009-11 Demand Response Applications. In D.08-06-001 et al., it became apparent that the results of the utilities' cost-effectiveness analyses were neither consistent with one another nor easily compared.7 Use of confidential data and proprietary models for many aspects of the analysis is one among several possible reasons for this, and meant that it was difficult to follow the reasoning or methods used for the calculations and that the results were not replicable by other parties. This complicated the interpretation of the results by obscuring the specific differences between the utilities' calculations.
We find that any potential increase in accuracy that may be gained through the use of confidential data and proprietary models is outweighed by the lack of transparency introduced in the calculations through the use of these non-public data sources. As provided in Section 1.C of the attached 2010 Protocols, cost-effectiveness calculations must utilize publicly available data and data sources and must generate the results using publicly available models and methods. This requirement is intended to increase the transparency of the calculations and confidence in the results. The adopted protocols specifically prohibit the use of any confidential or proprietary data "unless a clear and compelling case can be made that there are insufficient public data to perform a specific calculation."8 A utility or party wishing to exercise this provision to use non-public data must present the case for doing so and receive written permission from Commission staff through the workshop and guidance process defined for validating and updating methods described in Section 7.1. below, in advance of the analysis utilizing that data. This exception should allow for use of confidential data in the analysis of a specific aggregator contract, for example. In addition, if permission is granted and an analysis that depends on the confidential data is done, it must be accompanied by a separate analysis utilizing publicly available data to facilitate comparisons of the results and evaluation of the data choice.9
5 Revised Straw Proposals For Demand Response Load Impact Estimation And Cost-effectiveness Evaluation Of Pacific Gas and Electric Company (U39M), San Diego Gas & Electric Company (U902E), and Southern California Edison Company (U338E) filed September 10, 2007, ( http://docs.cpuc.ca.gov/efile/REPORT/72728.pdf) at 16, 89.
6 Comments of EnerNOC, Inc., EnergyConnect, Inc., and Comverge, Inc., On the Staff Draft Demand Response Cost-Effectiveness Protocols, filed April 25, 2010 at 4.
7 D.09-08-027 at 15-16.
8 2010 Protocols, Attachment 1, Section 1.C at 10.
9 Id.
