7. Guidance for the Use of the Protocols in the 2012-2014 Demand Response Applications

D.09-08-027 in A.08-06-001 et al., the utilities' last three-year applications proceeding, requires the utilities to file their new applications not later than January 30, 2011, and a ruling describing general requirements for the format and contents of those new applications was issued in R.07-01-041 on August 27, 2010. That ruling required the use of the Consensus Framework as the basis of cost effectiveness estimates contained in the new applications. With the adoption of this decision, we instead require the utilities to use the 2010 Protocols to calculate the cost effectiveness estimates for demand response activities included in the 2012-2014 Demand Response Applications. These protocols shall be used for all activities included in the applications for which the utilities are requesting a set budget and for which load impacts can be estimated using the load impact protocols, with the exception of Permanent Load Shifting activities. Further guidance on calculations of cost effectiveness for Permanent Load Shifting Activities may be issued before the applications are filed.

Because evaluation of all IDSM activities other than bridge funding for 2012 are being deferred to the Energy Efficiency program applications for 2013-2015, we do not require use of these protocols to estimate the cost effectiveness of those activities for the full 2012-2014 period in the forthcoming Demand Response applications.

As discussed in Section 7.1, below, we are adopting a regular validation process to ensure that the analysis contained in each set of three-year applications utilizes current values and reasonable assumptions for all inputs. The models reflecting the most current assumptions to be used in the three-year applications shall be kept 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, including those contained in stand-alone program applications or advice letters.

Various commenters expressed concerns about the fact that these protocols are being adopted shortly before the due date established in D.09-08-027 for the 2012-2014 applications, which could complicate the preparation of those applications. In order to ensure that validated models are available for an adequate period of time to allow utilities to prepare their applications, we delay the due date of the next set of program and budget applications from January 30, 2011, as required in D.09-08-027, to March 1, 2011. This extension of time should allow for approximately six weeks of preparation time for the applications after completion of the initial validation process described below.