BACKGROUND
SCE's Air Conditioning Cycling Program (also known as the Summer Discount Plan) is part of SCE's three-year (2006-2008) demand response budget application which the Commission approved recently in D.06-03-0241 in A. 05-06-008.
The Air Conditioner Cycling Program (AC Cycling Program) is available for individually-metered residential, commercial and industrial customers with central air conditioning, where the air conditioner's electrical load is subject to temporary disconnection through automatic load control devices. Currently, there are two AC Cycling Program options in which customers may enroll: the Base program and the Enhanced program. The Base program is limited to 15 events during the summer months, with a maximum duration of six hours per event, for a total of 90 hours of interruption. The Enhanced program has an unlimited number of events, for a maximum of 720 hours of interruption during the summer months. An event may be called when the CAISO requests load reductions during the summer or when SCE calls a local event. The incentive credits are based on the installed air conditioner tonnage and the participating customer's elected cycling strategy, which currently includes 50%, 67%, and 100% for residential customers and 30%, 40%, 50%, and 100% for commercial and industrial customers. Customers enrolled in the Base program receive an average of $100 per summer, and those enrolled in the Enhanced program received an average of $200 per summer. 2
Cycling Strategy | |
Comfort Choice |
Cooling Cycle |
100% |
Off continuously for duration of event |
67% |
Off 20 minutes out of every 30 minutes |
50% |
Off 15 minutes out of every 30 minutes |
40% |
Off 12 minutes out of every 30 minutes |
30% |
Off 9 minutes out of every 30 minutes |
In the August 15, 2006 Assigned Commissioner's Ruling3 Addressing Electric Reliability Needs in Southern California for Summer 2007 ("Electric Reliability ACR"), Commissioner President Peevey directed SCE to target an additional 300 megawatts (MW) of AC Cycling program capacity for summer 2007. This ruling is in response to the growth in electricity demand throughout the state and the July 2006 heat storm which had exposed certain vulnerabilities in the electric generation and transmission infrastructure. To expand the AC Cycling program, the Electric Reliability ACR directed SCE to determine if shifting the existing demand response funds can cover the costs of the additional 300 MWs or if additional funds (incremental to those previously approved in D.06-03-024) are necessary, and to provide this information to the Commission via the process outlined in ACR issued August 9, 2006.
Under the existing AC Cycling program, SCE is authorized to install 60,000 devices each year in order to enroll 84 MW annually over the 2006-2008 program cycle. SCE is currently authorized to spend $51.4 million on AC Cycling during the 2006-2008 program cycle between the amount authorized in D.06-03-024 and in the SCE's 2006 General Rate Case. The $54.1 million funding was expected to be spent over the three year period for a total of 180,000 devices.
Accordingly, SCE filed advice letter 2034-E on August 29, 2006 to request an additional $37.03 million to accelerate and expand AC Cycling program by an additional 300 MW by summer 2007. SCE's strategy to reach the 300 MW by summer 2007 is to accelerate the planned installation of devices by more than one year to July 2007. SCE states it has already installed 16,000 devices (~25MW) in August 2006. In addition, SCE proposes to accelerate the installation of the remaining 136,000 approved devices (equivalent to about 190 MW) by July 2007, which brings the total added MW since July 2006 to 215 MW. To reach the 300 MW goal by summer 2007, SCE needs to install 62,000 more devices that would add another 85 MW.
SCE states that this acceleration and expansion effort will require the following:
a) Significantly increase marketing and outreach activities to enroll new customers during 2006 and early 2007, particularly during the winter months when it will be more difficult to focus customers' attention on summer peak electricity usage.
b) Purchase and install additional devices beyond what was planned to achieve 300 MW by summer 2007. Devices will need to be manufactured on an accelerated schedule, which will increase the cost of the devices.
c) Expand installation to evenings and Sundays. This may require SCE to hire and pay contractors at overtime rates for evening and Sunday installations.
d) Offer incentives to recapture 90,000 dormant devices. There are approximately 90,000 installed devices in SCE's service territory that are not active because the participating customers moved and the new residents have not yet enrolled in AC Cycling program. SCE proposes to offer the new residents an "activation" incentive to encourage them to enroll in the AC Cycling program.
In addition, SCE proposes to streamline its program implementation and simplify customers' choices for enrollment by making the following modifications to its AC Cycling program design:
a) Close the Base option to new enrollment: SCE proposes to close the Base option to new enrollment, and instead offer only the unlimited Enhanced program for new enrollment. The vast majority of new enrollments have been in the Enhanced program.
b) Close Residential 67 % cycling option to new enrollment: This option creates unnecessary confusion for customers when deciding which option to choose and is more complicated to implement.
c) Close Commercial 40% cycling option to new enrollment: This option has the lowest level of participation.
d) Allow for the removal of customers prior to one year of service due to serious health problems: The recent heat storm revealed the need for SCE to be able to move a residential customer's account off of the AC Cycling program prior to one year of service if a member of the customer's household develops a serious medical condition that is substantiated by a medical provider subsequent to program enrollment that, in SCE's discretion, would have disqualified the customer from enrolling in AC Cycling program in the first place.
e) Include two 1-hour test events: SCE requests to switch from one 15-minute test event to two 1-hour test events. A single 15-minute window for testing the communication systems is not sufficient given the various cycling strategies; a test should be one-hour in length.
f) Remove language from the applicability section of tariff schedule D-APS and D-APS-E: Tariff schedules D-APS and D-APS-E currently exclude TOU-D-1 and TOU-D-2 customers from participating in the AC Cycling program. SCE proposes to remove this restriction.
1 The decision adopted an amended settlement which reduced SCE's original budget proposal.
2 The average incentive is based on a customer with a 4.5 ton air conditioner selecting the 100% cycling option.
3 R.05-12-013 and R.06-02-013.
