9. Comments on Proposed Decision

The proposed decision of Commissioner Peevey in this matter was mailed to the parties in accordance with Section 311 of the Public Utilities Code and comments were allowed under Rule 14.3 of the Commission's Rules of Practice and Procedure. Comments were filed on April 9, 2012, by AReM, CEERT, DRA, SDG&E, CAISO, PG&E, SCE, Greenlining and EDF, and reply comments were filed on April 16, 2012 by PG&E, SCE, DRA, SDG&E.

In general, the comments sought clarifications and modifications of the metrics and further details concerning the functioning and charter of the proposed technical working groups. We discuss the comments and our responses in this section.

SCE argues that the "Commission should not mandate that the California utilities disclose sensitive cyber-security information and vulnerabilities to anyone but the Commission itself."¹⁰³ In addition, SCE seeks clarifications to metrics 2, 4, 5, and 9. SCE also seeks modifications to the storage metric and the distributed generation metrics to remove contradictory definitions that create confusion.

The SCE requests are reasonable and clarify technical aspects of the metrics. We have incorporated the changes proposed by SCE into the text of the decision and into Attachment A.

AReM criticizes the metrics on several grounds. AReM argues that "the proposed consensus metrics are utility-centric and do nothing to facilitate third-party participation in markets."¹⁰⁴ AReM contends that the "PD conflates issues of how to appropriately allocate the benefits to various customers with how to count benefits for purposes of determining the effectiveness of the utilities' programs."¹⁰⁵ AReM also argues that "the technical working groups must not be allowed to dictate what is brought before the Commission."¹⁰⁶

In response to AReM, we note that these consensus metrics are a first step, and additional metrics may emerge from the workshop process. Concerning benefits, the Commission remains focused on insuring that the benefits produced by Smart Grid investments exceed costs - we do not intend to allocate benefits at this time. Finally, we assure AReM that the technical working groups will not dictate what is brought before the Commission because they cannot. What is brought before the Commission must flow through the checks and balances of Commission procedure, which aims to ensure that all voices are heard.

CAISO makes several recommendations for modification of the metrics. Concerning Customer/AMI Metric 5, the CAISO recommends that "metric no. 5 be reported by type of time-variant or dynamic pricing tariff so that the Commission and other interested parties can gain a better understanding of how progress towards this metric is being achieved."¹⁰⁷ Concerning Grid Operations Metric no. 7, the CAISO asks for greater reporting detail, requesting "reporting by month and ISO sub-Load Aggregation Point."¹⁰⁸ In addition, CAISO asks the Commission "to clarify that the Commission's engagement with these issues going forward will not be limited to evaluating the IOUs' annual smart grid reports."¹⁰⁹ Finally, CAISO asks that the Commission provide more detail on the future of the working groups and that "the final decision explicitly address the question of how long the Commission intends for the update/revisions working group to remain active."¹¹⁰

In response, we have amended Customer/AMI Metric 5 and Grid Operations Metric 7. We further assure the CAISO that the Commission will be actively monitoring Smart Grid developments. We note that the reports of the utilities will be a key input to the Commission's annual report to the legislature on the Smart Grid. Finally, concerning the future of the working groups, it is premature to determine the future for updates and revisions at this time. We anticipate that the working groups will provide a recommendation to the Commission concerning what their experience with revisions and new metrics indicates is a prudent way to proceed.

PG&E argues that "the consensus Smart Grid metrics should be adopted, but the Commission should clarify the limitations on the use and relevance of the metrics."¹¹¹ Furthermore, PG&E opposes the creation of a technical working group to develop goals as potentially conflicting with the proceedings reviewing Smart Grid deployment plans. PG&E also argues that the cyber-security working group should not be tied to the proposal of Granite Key/Aspect Labs, and asks that the environmental and metric revision technical working groups be combined "for administrative efficiency and reduced staffing burden."¹¹²

In response, we remind PG&E that Commission staff has led the development of the metrics, and understands their use and limitations. Concerning PG&E's working group proposals, we have clarified that the workshop on cybersecurity will not be tied to Granite Key/Aspect Labs proposal and that Appendix B is meant only to facilitate initial discussions. We, however, decline to consolidate the technical and environmental working groups because at this time we believe that the use of two groups will permit efficient and selective participation, and the Commission staff can merge them should they determine that merging them promotes efficient operation. Finally, we retain the technical working group concerned with goals, and note that it will report back to this proceeding to enable consideration of the goals by the Commission. This will ensure that there is no conflict between the work of this proceeding and that of the proceedings considering the Smart Grid development plans.

SDG&E makes comments on several of the metrics in Appendix A to their comments. In general, these comments point out areas of contradictions and ambiguities.¹¹³ SDG&E also asks for changes to the consensus metrics "due to regulatory updates."¹¹⁴ Finally, SDG&E urges the Commission to proceed with caution in developing goals for the Smart Grid and recommends "dialogue among the Commission, the IOUs and other interested stakeholders in order to understand the key concerns of each party."¹¹⁵

In response to SDG&E, we have made clarifications to the metrics and revised them to reflect changes due to regulatory updates. Concerning the development of goals, we stress that the working group will propose goals for consideration by the Commission in this proceeding; it is not chartered to create goals.

Greenlining asks the Commission to "adopt Greenlining's proposal to report by customer class, CARE enrollment, and climate zone."¹¹⁶ Greenlining argues that "it should be pursued unless pursuit is affirmatively demonstrated to be unworkable."¹¹⁷

In response, we have altered this decision to reflect Greenlining's new proposal. This proposal includes only data that should be readily accessible the utilities and not costly to provide. If, however, the costs of providing this data are large, the utilities may bring new facts to the attention of the Commission through a petition to modify.

EDF "supports the PD's approach to development of environmental metrics."¹¹⁸ EDF asks further that "the Commission require the environmental technical working group to examine metrics that represent the broad scope of environmental benefits."¹¹⁹

In response, we anticipate that the work of the environmental working group will examine metrics that represent the broad scope of environmental benefits.

DRA recommends a revision to Customer/AMI Metric 8 to ensure "the results of the field tests of the meters be reported."¹²⁰ DRA argues that "the cyber-security technical working group should be limited to discussing consensus metrics"¹²¹ and "cautions against using that group as a forum for formulation of cyber-security policies and protocols."¹²²

In response, we agree with DRA that the results of the meter tests should be reported, and we now use SCE's proposed language to ensure that there is no ambiguity on this matter. Regarding cyber-security, the technical working group on metrics is not a forum for adopting cyber-security policies. If the Commission determines that specific policies should be adopted, we will use the appropriate procedural vehicle for creating a record that supports Commission decisionmaking.

CEERT recommends the Commission act on two of EDF's proposed metrics at this time. In addition, CEERT states that "the preliminary goal areas should be amplified to assist discussion at the technical working group."¹²³

In response, we confirm that environmental metrics still require more work, and the technical working group is the best setting to resolve these issues. In addition, we welcome CEERT's efforts to provide examples of issues that the working group on goals can consider, but we decline to constrain the work of that technical working group at this time.