ALJ/MLC/hl2 Mailed 1/31/2005

Decision 05-01-056 January 27, 2005

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on policies and practices for advanced metering, demand response, and dynamic pricing.

Rulemaking 02-06-001

(Filed June 6, 2002)

OPINION APPROVING 2005 DEMAND RESPONSE

GOALS, PROGRAMS AND BUDGETS

1. Summary 2 2

2. Procedural History 2 2

3. What is Demand Response? 4 4

4. Policy Issues for 2005 Programs 8 8

4.1 Counting MW from Reliability Programs Towards Price
Responsive Demand Program Goals 8 8

4.2 Integrated Demand Side Management (IDSM) Marketing 8 8

4.3 Additional Meter Installations and Costs 10 10

4.4 Authorized Budget Period 12 12

4.5 Budgets and Budget Flexibility 13 13

5. Proposed 2005 Programs 15 15

5.1 Day-Ahead Notification Programs 20 20

5.1.1 Critical Peak Pricing (Statewide) 20 20

5.1.2 Demand Bidding Program (Statewide) 22 22

5.1.3 Demand Reserves Partnership (Statewide) 27 27

5.1.4 Programs Without Enrollment Requirements 29 29

5.1.5 Business Energy Partnership 34 34

5.2 Reliability-Triggered Programs 35 35

5.2.1 CPP-E (SDG&E) 36 36

5.2.2 Reopen Existing Non-Firm/Interruptible Rates (PG&E/SCE) 36 36

5.2.3 BIP (Statewide) 38 38

5.2.4 Load Control, Cycling, Thermostat Programs 40 40

5.2.5 Backup Generation Programs 46 46

5.3 Technical and Technology Assistance Incentives (Statewide) 49 49

5.4 Education, Awareness and Outreach 51 51

5.4.1 Flex Your Power Now (Statewide) 52 52

5.4.2 PEAK Student Energy Action Program (SDG&E) 53 53

5.4.3 Community Partnership Program (Statewide) 53 53

5.4.4 Circuit Saver Program (SDG&E) 54 54

5.4.5 Emerging Markets Program (Statewide) 54 54

5.4.6 Water District Partnership (SDG&E) 55 55

5.5 Other Programs 55 55

5.5.1 20/20 Program for Customers with Demand Less than
200 kW (Statewide) 55 55

6. Adopted Programs, Budgets and Goals 57 57

7. Ratemaking Treatment 64 64

8. Reporting, Measurement, and Evaluation 67 67

8.1 Reporting 67 67

8.2 Measurement and Evaluation 68 68

9. Comments on Draft Decision 69 69

10. Assignment of Proceeding 70 70

ORDER 78 78

OPINION APPROVING 2005 DEMAND RESPONSE
GOALS, PROGRAMS AND BUDGETS

1. Summary

This decision approves Summer 2005 day-ahead notification demand response programs that focus on providing peak demand reduction driven by day ahead high temperature, price, or demand level forecasts. It also approves reliability-triggered programs that focus on providing quick response load reduction capability, technology and technical assistance programs to automate customer response to demand reduction signals, and programs to educate customers about their power to reduce their bills by driving their load off peak.