7.1. Establishment of a Regular Workshop Process for Validating and Updating the Protocols and Models

In order to ensure that the specific inputs and assumptions contained in the Avoided Cost Calculator and Demand Response Reporting Template are accurate and current when the utilities prepare their three-year program and budget applications, we establish a workshop process to validate and update the models regularly, with input from interested parties. This validation process will ensure that the models referenced in the protocols continue to accurately reflect the protocols as circumstances and conditions change.

Energy Division staff shall hold workshops in advance of the filing of each new set of the utilities' demand response program and budget applications. These workshops shall be noticed on all parties on the most recent service list for this proceeding (R.07-01-041) and for the most recent demand response program applications proceeding (currently A.08-06-001 et al.). Utilities may request to use confidential data or otherwise depart from certain aspects of the protocols by providing a written explanation and justification of those departures to Energy Division staff, with copies to all parties noticed of the workshop, at least three days in advance of the workshop. Utilities shall also send a copy of these requests by electronic mail at drprotocols@cpuc.ca.gov. These workshops shall serve two purposes: first, they will include an opportunity for parties to validate the Avoided Cost Calculator and Demand Response Reporting Template models by identifying any potential errors or suggesting updated inputs for use in future cost effectiveness analyses of demand response. Discussion of items such as the inputs to the combustion turbine pro-forma financials, the modeling of the combustion turbine dispatch and resulting capacity factor, gross margin calculations, and appropriate T&D avoided cost values may be addressed in the workshop. In addition, the workshop will allow parties and Energy Division staff to discuss requested departures from these protocols contained in the utilities' pre-workshop filings (if any). Based on discussion at the workshop, Energy Division staff shall make technical updates to the models to reflect current values for any inputs or assumptions that may have changed since the previous versions, or to correct any errors found by parties at the workshop. Energy Division staff will also prepare and circulate to all workshop participants and the appropriate service lists their guidance on the instances in which utilities may depart from specific requirements of the protocols, if any, based on the utilities' written requests and parties' comments at the workshop. Staff may provide additional technical information responding to parties' questions in their post-workshop guidance along with a list of any corrections made to the models.

Because the utilities' next three-year demand response applications are due in early 2011, we expect Energy Division to hold the pre-application workshop as soon as possible after the adoption of this decision, with final technical guidance based on that workshop issued within two weeks after the workshop. For future application cycles, we require Energy Division staff to initiate this workshop process at least three months before the due date of the applications, and issue final technical guidance at least 45 days in advance of the application due date. If necessary, the Demand Response Measurement and Evaluation Committee shall make funds, not to exceed $50,000, available to support the validation process and related model maintenance, and utilities may request additional funding to support future validation and update activities in future demand response program and budget applications.

Energy Division may make small technical corrections or updates to data in the Avoided Cost Calculator and Demand Response Reporting Template outside of the periodic workshop review process described here, if necessary to ensure that calculations accurately reflect the protocols consistent with recent Commission decisions and other current conditions. Updates may include data such as updated electricity forward prices, natural gas prices and CAISO market price data, among other possible items. Energy Division will notify the most recent service list in this proceeding and the most recent demand response applications proceeding of any changes to the models, and will ensure that the most current versions of the models remain accessible to all parties.