5. Purpose and Use of the New Protocols
The 2010 Protocols adopted in this decision shall be used for evaluation of the cost-effectiveness of existing and proposed demand response activities in future program development, planning, and evaluation activities. Cost-effectiveness analysis of voluntary demand response activities included in future demand response program activity and budget applications, including the demand response applications for 2012-2014, due to be filed in January 2011, 33 shall use the adopted protocols. These protocols should also be used to estimate cost-effectiveness of demand response activities proposed in free-standing applications such as for new programs or aggregator contracts, and in expansions of existing programs done via advice letter or another method.
In comments on the proposed decision, PG&E suggested that utilities should be able to use their own utility-specific avoided costs and other data for the evaluation of offers received in competitive solicitations. DRA's reply comments noted that "[i]t is not the internal process by which a utility uses to evaluate and select the final bids that are important, but rather whether the end product resulting from that process-the final contracts-meet the Commission's requirements for cost-effectiveness based on the adopted protocols."
We find that like other demand response programs, proposed contracts must be subject to cost-effectiveness review based on the adopted protocols. LSEs are free, as DRA points out, to use any methods they want to evaluate offers received in completive solicitations to determine which offers they will pursue. However, if an LSE decides to seek Commission approval for those offers, they then are subject to Commission-approved cost-effectiveness analysis.
We recognize that aspects of these protocols may be changed and improved as demand response activities evolve and more information becomes available on best practices in measurement and evaluation of demand response; however, with the exception of the regular validation and update process required in Section 7.1, below, these protocols shall remain in place until modified or superseded by new direction from this Commission. The most recent, validated version of the Avoided Cost Calculator and Demand Response Reporting Template shall be accessible through the Commission's Web site at http://www.cpuc.ca.gov/PUC/energy/Demand+Response/Cost-Effectiveness.htm, and shall be used for all cost effectiveness calculations done according to the protocols. The Commission may review these protocols in a future proceeding if modifications are made to the SPM or another source referenced in the protocols. The Commission may also review or amend the protocols as needed to address new developments, including those raised in future demand response applications.
The protocols adopted here may require adjustments for use with Permanent Load Shifting. These protocols are not designed to measure technical assistance, pilot projects designed for research or experimental purposes, or education, marketing and outreach activities which promote demand response or other energy-saving activities in general, though the cost of some of those programs will be considered when measuring the cost-effectiveness of a utility's entire demand response portfolio, as discussed in the protocols.
It may become necessary for the Commission or an individual utility to update or modify methods or values in future cost-effectiveness evaluations. However, if a utility believes any such updates or modifications are required, they must be clearly described and justified to all parties, and approved by the Commission, as described in Section 6, below.
33 D.09-08-027, Ordering Paragraph 41.
