SK1/MEG/jva 12/07/2005
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Promote Consistency in Methodology and Input Assumptions in Commission Applications of Short-Run and Long-run Avoided Costs, Including Pricing for Qualifying Facilities. |
Rulemaking 04-04-025 (Filed April 22, 2004) |
ASSIGNED COMMISSIONER'S RULING SOLICITING COMMENTS ON SCOPE AND SCHEDULE FOR AVOIDED COST UPDATING PROCESS DIRECTED BY DECISION 05-09-043 AND ESTABLISHING A NEW SERVICE LIST FOR THE 2006 UPDATE PHASE OF THE PROCEEDING
1. Background and Summary
By Decision (D.) 05-09-043, issued on September 22, 2005 in the Commission's energy efficiency Rulemaking (R.) 01-08-028, the Commission called for further improvements to the avoided costs adopted on an interim basis in D.05-04-024 for the valuation of energy efficiency and other resource options that reduce peak (in particular, critical peak) demand. As part of these improvements, the Commission directed that Commission staff and interested parties work to develop a common definition of peak/critical peak demand reductions for energy efficiency planning and evaluation purposes. In addition, D.05-09-043 identified the need to refine/make consistent across the utilities certain aspects of the E3 calculator that the utilities developed to map the Commission-adopted avoided costs to energy efficiency programs for cost-effectiveness calculations, and to develop a common calculator for use by all implementers.1 Finally, D.05-09-043 identified the need to improve the consistency in underlying load shape data and the methods by which energy savings from energy efficiency measures are translated into peak savings estimates. The Commission's goal is to "issue a decision on these issues during the first half of 2006, or as soon thereafter as practicable." 2 Relevant excerpts from D.05-09-043 are presented in the Attachment to this ruling.
Recognizing that "[t]he proper valuation of peak load reductions...is needed whether such reductions are achieved through energy efficiency measures, distributed generation or demand response,"3 the Commission directed that consideration of these issues be carefully coordinated and addressed in this generic avoided cost rulemaking. Per D.05-09-043, the utilities held informational workshops in October on the E3 calculator model, underlying load shape data and avoided cost mapping currently contained in those models. As discussed in that decision, the primary purpose of the workshops was informational-they were not intended to be the forum for debating or resolving disagreements about the E3 model or inputs at this juncture. However, the Commission asked workshop participants to assist in identifying what longer term refinements/improvements should be considered with respect to the valuation of peak load reductions and related issues. The utilities submitted those recommendations in their joint November 1, 2005 workshop report. The report has been served on all parties in this proceeding and the energy efficiency rulemaking (R.01-08-028), as directed by D.05-09-043, and is posted on the Commission's website at: http://www.cpuc.ca.gov/static/energy/electric/energy+efficiency/rulemaking/
Today, I am soliciting written comments on that report "to assist in scoping the issues for the 2006 updating process," as directed by the Commission.4 The utilities and interested parties should also comment on the scope and proposed schedule for the 2006 Update presented in the following sections. In addition, I am establishing a new service list in this proceeding for the 2006 Update process, as discussed below.
1 "The utilities" refers collectively to Pacific Gas and Electric Company, San Diego Gas & Electric Company, Southern California Gas Company and Southern California Edison Company.
2 D.05-09-043, mimeo., p.141
3 Ibid.., p. 114.
4 Ibid., p.113.
