5. Comments on Draft Decision
On July __, 2001, the draft decision of Presiding Officer and Assigned Commissioner Wood on this matter was mailed to parties in accordance with Section 311(g) of the Public Utilities Code and Rule 77.7 of the Rules of Practice and Procedure. Comments were filed and served on July __, 2001.
1. Governor Davis issued EO D-39-01 on June 8, 2001.
2. EO D-39-01 addresses consolidation of load curtailment programs now authorized or offered by the ISO, Commission, and electric corporations, and orders DWR and ISO to implement voluntary, emergency load curtailment programs.
3. By letter dated June 25, 2001, Governor Davis asks the Commission to take three actions related to EO D-39-01: (a) modify D.01-04-006, (b) expedite consideration of DBP tariffs, and (c) direct utilities to aggressively market the DBP.
4. On June 25, 2001, an emergency petition for modification of D.01-04-006 was filed jointly by PG&E, SCE and SDG&E in which each seeks authority to withdraw its VDRP tariff, and implement a new DBP tariff on an expedited basis.
5. On June 28, 2001, respondent utilities filed and served draft tariffs.
6. On July 2, 2001, responses to the petition were filed and served by ISO, PU Consultants and ORA.
7. On July 5, 2001, respondent utilities filed and served a reply to the responses.
8. DBP will offer day ahead incentives to bundled customers for reducing energy consumption and demand during high net short days, five days a week during non-holiday weekdays.
9. DBP program costs will be financed by DWR.
10. Petitioners' proposal that utilities distribute incentive amounts due individual participants to the extent utilities are reimbursed concurrently by DWR gives customers inadequate assurance of when payment will be made.
11. DBP is proposed to replace VDRP.
12. The public interest in quickly modifying D.01-04-006 to withdraw VDRP tariffs and implement a DBP outweighs the public interest in a full 30-day public review and comment of the proposed modifications.
1. The emergency petition for modification of D.01-04-006 should be granted with limited change.
2. Each respondent utility should file and serve a new DBP tariff, and each respondent utility's VDRP tariff should be cancelled concurrently with the new DBP tariff becoming effective.
3. DBP costs should be financed by DWR.
4. Distribution of incentive amounts to individual program participants should be within 90 days of the DBP event, and not be contingent upon respondent utilities receiving payment from DWR.
5. DBP incentive payments for an event that is cancelled part way though a four hour time block should be for actual performance.
6. DBP participants should not be permitted to also enroll in ISO's Participating Load Program, also known as the Ancillary Services Load Program.
7. Respondent utilities, ISO and CERS should determine a deadline for respondent utilities to submit aggregated bids to ISO and CERS, but that deadline should not be stated in tariffs at this time.
8. The emergency petition should neither be denied, nor its requests adopted only in part, based on any consideration with respect to ISO's DRP.
9. DBP MW and costs should apply, just as did VDRP MW and costs, against total program MW and costs.
10. Respondent utilities should work with Energy Division to prepare final tariffs that are consistent with the orders herein, and reasonably consistent among utilities.
11. The period for public review and comment on the draft decision should be reduced, pursuant to Rule 77.7(f)(9).
12. This order should be effective today so that the DBP can replace VDRP without delay, and potential threat to public health or welfare by rotating outages that might otherwise be avoided can be mitigated.
INTERIM ORDER
IT IS ORDERED that:
1. The June 25, 2001 emergency petition for modification of Decision (D.) 01-04-006 is granted to the extent described herein, and denied in all other respects.
2. D.01-04-006 is modified effective today as follows:
a. The background and discussion sections in this order are inserted at the end of Section 5.6.
b. Finding of Fact 32A is added:
"32 A. By Executive Order D-39-01, issued June 8, 2001, and by letter dated June 25, 2001 to the Commission, Governor Davis orders and recommends a demand bidding program to be implemented by respondent utilities, and funded by the California Department of Water Resources."
c. Conclusion of Law 18A is added:
"18A. The DBP should be adopted to replace the VDRP."
d. The third sentence of Ordering Paragraph 15 (as renumbered by D.01-04-009) is modified to read: "The accounting shall separately identify the cost and revenue associated with each program, activity, study or report (e.g., separately track costs and revenues for the new Base Interruptible Program, Voluntary Demand Response Program, Demand Bidding Program, each curtailment study, each report)."
e. Attachment A to this order is inserted into a new section identified as Section 2.6 of Attachment A to D.01-04-006.
3. Within one day of the date of this order, respondent utilities Pacific Gas & Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company shall each file and serve an advice letter with revised tariffs. The advice letters with revised tariffs shall implement the directions in this order and the program description in Attachment A. Each advice letter with tariffs shall be in compliance with General Order 96-A. The advice letters and tariffs shall become effective three days after filing, unless suspended by the Energy Division Director. If any advice letter and tariff is suspended by the Energy Division Director, the advice letter and tariff shall become effective upon the date the Energy Division Director determines that the tariff complies with this order. The Energy Division Director may require a respondent utility to amend its advice letter and tariffs to comply with the orders herein. Respondent utilities shall work with the Energy Division Director and staff to prepare advice letters and tariffs that are consistent with the orders herein, and reasonably consistent among utilities. The Voluntary Demand Response Program (VDRP) tariff of each respondent utility shall be cancelled at the time the new tariffs authorized herein become effective. Respondent utilities shall each notify VDRP participants as soon as possible that VDRP will be withdrawn, and encourage eligible customers to participate in the demand bidding program.
4. This proceeding remains open.
This order is effective today.
Dated , at San Francisco, California.
ATTACHMENT A
DEMAND BIDDING PROGRAM
Section 2.6 (below) is added to Attachment A of Decision 01-04-006 to describe the Demand Bidding Program (DBP) and its operational aspects.
2.6. Demand Bidding Program
2.6.1. The Offer
2.6.1.1. Participants will submit bids to a DBP website. In addition, the utility distribution companies (UDCs) may notify customers via the internet and other means of communication as needed of DBP events on a day-ahead basis.
2.6.1.2. Participants will have until 1:00 p.m. on the day before a bidding day to submit their bids. Bidding will be accepted for non-holiday weekdays only.
2.6.1.3. Participants will indicate the amount of kilowatt (kW) curtailment they are offering, at each price level for designated hourly blocks of the next day.
2.6.1.4. Participants will be able to submit bids for the program in any or all of three four-hour time blocks, and at one of four price tiers. The California Independent System Operator (ISO) and the California Department of Water Resources (DWR) may offer price tiers of 15, 35, 55, and 75 cents per kWh or alternatively price tiers of 10, 30, 50, and 70 cents per kWh. The three time blocks are 8 a.m. to 12 Noon, 12 Noon to 4 p.m., and 4 p.m. to 8 p.m.
2.6.1.5. The participant's bid must be the same amount of kW and at the same price tier for each hour of the four hour time block.
2.6.1.6. Only one bid per customer account may be submitted for each four-hour block.
2.6.2. DBP Offer Evaluation and Confirmation
2.6.2.1. By 4:00 p.m. on the day before the proposed curtailment, the DWR and the ISO will evaluate each offer aggregated by each UDC for each four-hour block and confirm with the UDC acceptance or rejection of the offer. The DWR and the ISO will accept or reject all the bid megawatts (MWs) at any price tier for each UDC. The ISO or DWR must accept or reject each offer in its entirely for each four hour block.
2.6.2.2. As part of the evaluation the ISO will consult with the California Energy Resource Scheduling Division of DWR regarding the anticipated price of generation and power purchases for the next day and will decide which offers to accept and confirm. Each offer will be accepted based on the lowest cost curtailment offers for the needed hours.
2.6.2.3. Once a bid is accepted and notice of acceptance is sent to the UDC, the ISO will send no additional information to curtail load.
2.6.2.4. Customers will be notified of bid acceptance at approximately 5:00 p.m. on the day before the curtailment, once the UDCs receive the bids that the ISO has accepted.
2.6.3. DBP Performance Verification and Payment
2.6.3.1. The UDC will track the curtailment of participating customers. The UDC will review the performance meter data against the accepted bids and calculate the payment due to the participating customers.
2.6.3.2. UDCs will distribute incentive amounts due to individual participants within 90 days of a DBP event, and distribution will not be contingent upon payment from DWR.
2.6.3.3. The DWR reserves the right to audit the performance submitted by the UDCs in accordance with the DBP bid.
2.6.3.4. Performance payment data will be forwarded to the DWR to make payments to the UDCs.
2.6.3.5. UDCs will be paid in accordance with the funding mechanisms agreed to between the UDCs and DWR.
2.6.3.6. Participants will only be paid for a maximum of 150 percent of their accepted bid kW load drop for a given four hour block. Participants must drop at least 50 percent of their bid load drop to qualify for any payment in any hour of a given four-hour block. In no case will a customer be paid an incentive if load drop does not meet 10% of the customer's average annual demand but not less than 100 kW.
2.6.3.7. Baseline load for measuring load drop will be computed pursuant to the existing Voluntary Demand Response Program (VDRP) methodology.
2.6.3.8. If requested by the DWR or ISO, the UDCs may cancel a curtailment event up to the beginning of the event without incurring further payment obligation or penalty The UDCs will try to provide as much advance notice as is reasonable under the circumstances. UDCs will pay for actual performance if an event is cancelled during a four hour time block.
2.6.4. Participation Requirements
To participate in the program, customers must meet the following minimum requirements:
2.6.4.1. Individual bids should be a minimum of 10 percent of each customer account's average demand, but not less than 100 kW per customer account. No aggregation of customer accounts will be allowed.
2.6.4.2. Customers must have an interval meter. For customers over 200 kW the meter will be provided pursuant to the CEC's real time electric meter (RTEM) program, based on available funding. For customers under 200 kW the meter will be provided pursuant to existing VDRP procedures under which expenses are recorded in a memorandum account for future rate recovery. The ISO will work with discretionary load curtailment program (DLCP) customers to add interval meters. Customers who receive meters at "no charge" will be obligated to perform in at least 10 events and remain on the program for one year consistent with existing tariff provisions of the VDRP.
2.6.4.3. Participants may not be enrolled in either the ISO's Demand Relief Program, or the Participating Load Program, also known as the Ancillary Services Load Program.
2.6.4.4. Customers may achieve load drop by operating back-up or onsite generation. The customer will be solely responsible for meeting all environmental and other regulatory requirements for the operation of such generation.
(END OF ATTACHMENT A)
