I. Summary

This decision, the second of two decisions to be rendered in Phase 1 of this demand response rulemaking, addresses the interagency vision for advancing statewide demand response goals, links the task of meeting those goals with utility procurement requirements, and adopts an initial set of voluntary tariffs and programs for large customers whose electricity use exceeds 200 kW per month. The decision also sets annual megawatt (MW) targets to be met through demand response and included in investor-owned utility (IOU) procurement plans.

The approved offerings for large customers include a statewide Critical Peak Pricing (CPP) tariff, an Hourly Pricing Option (HPO) tariff for customers in San Diego Gas & Electric's (SDG&E) territory, an IOU demand bidding program (DBP), and the Demand Reserves Program (DRP) offered under the aegis of the California Consumer Power and Conservation Financing Authority (CPA). While these offerings have no expiration date, we authorize funding for 2003 and 2004, capping expected costs at $33.0 million over the two years. The respondent IOUs are required to file tariffs and implementation plans for the approaches we adopt.