VII. Comments on the Proposed Decision
The proposed decision of the ALJ in this matter is mailed to the parties in accordance with Section 311(d) of the Public Utilities Code and Rule 77.1 of the Rules of Practice and Procedure, but with a shortened comment time as stipulated by all parties. Several parties filed comments on March 6, 2006 and filed reply comments are due on March 10, 2006. This order makes minor changes from the proposed decision of the ALJ to clarify elements of the settlement or dicta.
Findings of Fact
1. The active parties to this proceeding filed a settlement and then amendments to it following an evidentiary hearing. Neither document was contested in any way by any party.
2. D.05-11-009 established a process that could be used to consider utility goals and cost-benefit models for demand response programs.
3. Customer education programs may provide few if any measurable energy savings and are therefore less likely than other programs to be cost-effective.
4. The utilities should not be permitted to allocate to demand response program budgets costs for which they are already reimbursed in rates, corporate overheads and other indirect costs to demand response programs.
5. The settlement would commit the Commission to finding eligible for intervenor compensation those parties who work on development and management of demand response programs.
Conclusions of Law
1. The Commission should consider cost-benefit models and utility goals for demand response programs according to the process established in D.05-11-009.
2. Pub. Util. Code § 740.10 requires the utilities to offer to customers a demand response program it terms SLRP and for which it defines program elements. The Commission cannot lawfully require or permit a utility to eliminate such a program.
3. The issue of intervenor compensation policies and practices is outside the scope of this proceeding. It would therefore be unlawful for the Commission to modify existing intervenor compensation policies or practices. To the extent the settlement provisions regarding intervenor compensation are consistent with existing law, policy and practice, they are appropriate for inclusion in the settlement.
4. With the exceptions set forth herein, the settlement is reasonable in light of the whole record, consistent with law, and in the public interest.
O R D E R
IT IS ORDERED that:
1. The amended settlement, filed January 30, 2006, by Southern California Edison Company, Pacific Gas and Electric Company, San Diego Gas & Electric Company, the Division of Ratepayer Advocates (then known as the Office of Ratepayer Advocates), The Utility Reform Network, Aglet Consumer Alliance, San Francisco Community Power, and the Association of California Water Agencies (Settling Parties) and attached as Appendix A is adopted with the exceptions set forth herein.
2. Southern California Edison Company, Pacific Gas and Electric Company and San Diego Gas & Electric Company shall file by advice letter all tariff changes resulting from the amended settlement within 10 days of the effective date of the decision. The protest period for these advice letters shall be shortened to 10 days, and the tariffs will be effective within 20 days of their filing, unless suspended by the Energy Division.
3. Applications (A.) 05-06-006, A.05-06-008, and A.05-06-017 remain open to address program goals and cost-benefit methodologies as discussed herein.
This order is effective today.
Dated March 15, 2006, at San Francisco, California.
MICHAEL R. PEEVEY
President
GEOFFREY F. BROWN
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
SCE Demand Response 2006-2008 Program Descriptions | |
PROGRAM TYPE |
PROGRAM DESCRIPTION |
Day-Ahead Notification Programs |
|
Demand Bidding Program |
Incentive program triggered when system peak demand forecast exceeds 43,000 MW, or CAISO issues an Alert. The incentive bill credit is equal to the day-ahead price plus 10 cents/kWh , up to a maximum of 35 cents/kWh. Once the day-ahead price equals or exceeds 35 cents kWh, the incentive is equal to dthe day - ahead price. |
Critical Peak Pricing |
CPP event period is from noon to 6:00p.m. on summer weekdays only with an energy rate of about three times the normal rate from noon to 3:00 p.m. and five times the normal on-peak rates for the normal on-peak rate from 3:00 p.m. to 6:00 pm. Mid-peak and off peak rates for the remainder of the year are reduced. The 12 summer CPP events may be triggered by forecasted high market prices, system constraints or high temperatures. CPP-VCD available to all customers with demand greater than 200 kW. CPP-GCCD available to customers with demand greater than 500 kW. |
CPA Demand Reserves Partnership |
For 2006, the program is unchanged. Working directly with third-party aggregators, DWR procures demand reduction by paying for a firm commitment of DR capacity plus load reduction delivered. SCE is planning to file and application in mid-2006 to propose a successor program for 2007-2008, the details of which are still being developed. |
Reliability Day-Of Programs |
|
Expanded AC Cycling |
The Air Conditioner Cycling Program (ACCP) is available for individually-metered residential and C&I customers with central air conditioning, where the air conditioner's electrical load is subject to temporary disconnection through automatic load control devices. There are two ACCP options in which customers may enroll. The Base program is limited to 15 events during the summer months only, with a maximum duration of six hours, for a total of 90 hours of interruption. The incentive payment to a participant is based on the installed tonnage and the customers elected cycling strategy. The Enhanced ACCP is identical in structure to the Base program, except that the number of events is unlimited resulting in potential interruptions of up to 720 hours during the summer. |
Base Interruptible Program (BIP) |
The BIP is a voluntary program that offers participants a monthly "capacity" bill credit in exchange for committing to reduce power to a minimum predetermined level on hour notice during emergency situations. BIP imposes a significant penalty for non-performance. Customers who can reduce demand by 15% or a minimum of 100 kW, whichever is higher, have and IDR meter, and have telecommunications are eligible to participate. The program is designed for either DA or bundled customers who have a firm load reduction plan in place and can reduce load with certainty when requested. The penalty for non-performance is far greater than the incentive. |
AP-I |
The Agriculture and Pumping Interruptible Program (AP-I) offers qualifying customers a bill credit on energy usage for allowing SCE to temporarily shut off pumping equipment without advance notice. Under the terms of the tariff, participants may be shut off during a CAISO Stage 2 emergency, up to 25 times or 150 hours annually. Events are limited to 6 hours a day. SCE proposes to increase marketing efforts to significantly increase enrollment. Additionally, SCE proposes to eliminate the up-front fee customers are now required to pay. |
I-6 |
I-6 is a rate discount program open to bundled and Direct Access Customers able to provide a minimum demand reduction of 500 kW with 30 minutes notice during an CAISO Stage 2 emergency or a localized system emergency. |
Energy Smart Thermostat-Small C&I |
The SCE Energy Smart Thermostat Program currently provides small commercial and industrial customers with the ability to participate in an air conditioner-based demand response program using a communicating two-way paging digital programmable thermostat that is installed at the customer site and then remotely controlled via radio signals by SCE to raise the cooling set point of the air conditioner. The customer has the ability to override the thermostat curtailment, but is subject to financial penalty for doing so. SCE proposes to maintain the program as an ongoing reliability program, with some modifications to improve cost effectiveness and the demand response impacts of the program. SCE does not propose to increase enrollments in the current program, and expects the program enrollment of 9000 thermostats to decrease by 3-5% annually. Note: The amended settlement terminates this program. |
Other DR Programs and Pilots |
|
Technical Assistance/Incentives |
The Technical Assistance/Incentives program was designed as an enhanced version of the demand response Technical Assistance incentive that was available to customers in 2003-2004. The program is based on a three step process: 1. Specific SCE customer representative training for identifying demand response opportunities and recommendations. 2. Establishing analytical tools and procedures to both deliver and track recommendations for the customer, and establish a continuous improvement process for upgrading the tools. 3. Developing SCE-provided engineering and consulting assistance for customers for more complex and technical sites where the cursory audit may require subject matter experts. |
Emerging Markets & Technologies |
Emerging Markets and Technologies Program facilitates the development of new demand response programs and technology. SCE plans to focus on three areas: 1. demand response technologies; 2. demand response codes and standards and ; 3. innovative technologies. |
Statewide Pricing Pilot |
SPP research activities include the Advance Demand Response System (ADRS) pilot, analysis of the CPP-V Track A small C&I customers, and the Information Display Pilot (IDP). For 2006, SCE is requesting funding for the on-going administrative, billing, notification, maintenance, customer support, meter maintenance, and deferred decommissioning costs of the SPP Program. |
Small Business Communicating Thermostat Pilot |
The new generation of communicating thermostats is now more cost effective that the technologies employed for previous pricing pilots. SCE proposes to develop a pilot program to assess the next-generation of low-cost communicating thermostats for the residential and small non-residential sectors. SCE expects to enroll over 10,000 customers into the program. |
Customer Education, Awareness & Outreach |
|
Flex Your Power Now |
The primary goal of "Flex Your Power Now" (FYPN) is to reduce peak period usage during targeted summer days when the State has heightened supply/demand balance concerns. FYPN is targeted at all customers, including residential and small business customers, and relies heavily upon mass media announcements during those targeted summer days. SCE is requesting approval to continue collaboration with its statewide partners by extending FYPN through 2008. |
Community EE/DR Partnership Demo |
The intent of the program is to educate and facilitate small and medium business customers including city, school government and military participation in SCE's demand response load reduction programs, while leveraging the existing delivery channels provided by energy efficiency. |
Peak Plus+ Pilot Partnership |
The Peak Plus+ Pilot Partnership Program a demonstration project that that builds upon the research in Critical Peak Pricing. The program is intended to demonstrate the value of students as demand responders in California, building on these students' skills as household energy managers. The program will engage 500 families for three years. The participating homes will be provided smart, interval meters to collect and record time of usage and families' power usage patterns, and to determine each families' Critical Peak Power rate. |
EE/DR Integrated Outreach Programs |
|
Integrated EE/DR Marketing |
Marketing and communication of demand response programs to business customers through an integrated Demand Side Management (IDSM) approach that raises customer awareness of programs and how to participate. This includes analyzing a customer's operations to identify various DSM opportunities and offering a customer-specific portfolio of recommendations or solutions. |
Circuit Savers |
The Circuit Savers Program is designed to inform and educate customers receiving service on highly loaded electric distribution circuits about reliability and price responsive programs available to help reduce load on these circuits during summer peak periods. SCE will identify highly loaded circuits and customers whose load profiles and business operations are suitable for this program. Customers will be offered a full range of support such as TI/TA, demand response program education, awareness, and community outreach activities. |
Ag & Water Outreach |
The intent of this agricultural and water program is to outreach specifically to the agricultural communities and water agencies in a three county area, to educate them on the need and purpose of demand response, identify strategies for load shedding and shifting, enroll them in appropriate demand response programs, develop new strategies for irrigation and storage, and shift activities to off peak hours on a dispatchable basis. SCE proposes to start this program in 2006 and continue through 2007 and 2008. |
Federal Power Reserves Partnership Program |
SCE intends to outreach specifically to government and military customers, so that this customer sector can take advantage of educational efforts on the need and purpose of demand response, identify strategies for load shedding and shifting, enroll in appropriate demand response programs, develop new strategies for demand side management and deployment and shift non-mission critical activities to off peak hours on a dispatchable basis. SCE proposes this program for 2006 through 2008. |
Demand Response Portfolio Systems Development |
|
EE/DR Integrated Program Tracking System |
SCE is researching the development of a comprehensive integrated tracking technology that can be utilized by all energy efficiency programs during the 2006-08 program cycle. Currently, SCE utilizes multiple application to track and monitor program information. SCE now sees and opportunity to combine these applications into one system to improve operational efficiency. |
Demand Response Systems Integration |
SCE has a portfolio of demand response and load management programs with administrative applications and operational systems that are independent of one another and are maintained as stand alone systems. SCE proposes to that the integration and consolidation of many of these systems will increase efficiency and reliability in administration, operations, and reporting. |
DR forecasting Tool |
SCE proposes develop and enhanced demand response forecasting model to enable it to reliably and accurately estimate the potential results achievable through the use of demand response programs and to optimize the design of those programs. |
(END OF ATTACHMENT A)
(END OF ATTACHMENT B)
SDG&E Demand Response 2006-2008 Program Descriptions | |
PROGRAM TYPE |
PROGRAM DESCRIPTION |
Day-Ahead Notification Programs |
|
Demand Bidding Program |
The DBP is a voluntary program eligible to bundled or DA customers who have a minimum demand of 20 kW, and IDR meter and communications, whereby participants earn bill credits by reducing a minimum of 10% of their power consumption when contacted. The program is designed for customers who prefer a voluntary program that does not penalize them should they choose not to respond to a particular event and have the ability to modify their operations with one day's notice. Participants currently receive an incentive based on the market price +$0.10. |
Voluntary Critical Peak Pricing (CPP) |
Voluntary CPP is a rate option whereby commodity prices are discounted throughout the year during all non-critical peak hours. Non-residential bundled utility customers who have a minimum demand of 20 kW or higher, an IDR meter, and are served on a time-of-use (TOU) rate are eligible. This program is designed for customers who have the ability to modify their business operations and reduce load with one day's notice. SDG&E proposes the following modifications to it's voluntary CPP program: 1. allow adjustments to voluntary CPP trigger as warranted; 2. Discontinue bill protection in 2007 |
CPA Demand Reserves Partnership |
For 2006, the program is unchanged. Working directly with third-party aggregators, DWR procures demand reduction by paying for a firm commitment of DR capacity plus load reduction delivered. In 2007 SDG&E recommends transitioning to a new similar program that maintains the key elements of the CPA DRP, such as the use of aggregators, allowance of Direct Access participation, a flexible bid process and both energy and capacity payments. |
Commercial/Industrial (C&I) Peak Day 20/20 |
C&I Peak Day 20/20 is a voluntary program that provides participants with the ability to earn a bill credit of 20% by reducing their power consumption by a minimum of 20% on critical peak days. Participants are notified one day in advance of a peak day event. Bundled utility or direct access customer who have a minimum demand of 20 kW or higher, are on a TOU rate, and have an IDR meter are eligible to participate. SDG&E proposes the following modifications: 1. extend Peak Day 20/20 through 2008; 2. Extend Peak Day 20/20 to customers with AMI technology. |
Reliability Day-Of Programs |
|
Emergency Demand Bidding Program (DBP-E) |
The DBP-E is a voluntary program enabling participants to earn bill credits by reducing a minimum of 10% of their power consumption. This program is targets customers who have the ability to modify their operations with as little as 60 minutes notice. Customers who have a minimum demand of 20 kW, an IDR meter and communications are eligible to participate. Participants are paid an incentive for load reduced of $0.50/kWh, or the day-of market price whatever is higher. Requirements: 1. customer must achieve their accepted bid load reduction at a minimum to earn an incentive; 2. participation in two tests is required; 3. participants must respond to at least half of the DBP-E events, or will be removed from the program. |
Base Interruptible Program (BIP) |
The BIP is a voluntary program that offers participants a monthly "capacity" bill credit in exchange for committing to reduce power to a minimum predetermined level on hour notice during emergency situations. BIP imposes a significant penalty for non-performance. Customers who can reduce demand by 15% or a minimum of 100 kW, whichever is higher, have and IDR meter, and have telecommunications are eligible to participate. The program is designed for either DA or bundled customers who have a firm load reduction plan in place and can reduce load with certainty when requested. The penalty for non-performance is far greater than the incentive. SDG&E proposes to allow aggregators to participate in the program. |
Emergency Critical Peak Pricing (CPP-E) |
CPP-E is a rate option offering customers discounted commodity prices throughout the year in exchange for reducing load when needed during critical peak periods. Energy that is consumed during the critical peak periods is priced higher to reflect the peak period cost of supply. The program is targeted to customers who have the ability to modify their business operations with as little as 30 minutes notice, typically through automated methods. For 2006-2008 SDG&E proposes to waive the maximum demand charge during non-CPP periods on a CPP event day for the first year of enrollment. |
Residential Smart Thermostat |
The Residential Smart Thermostat is a voluntary pilot program originally intended to test the viability of and interactive approach to residential load control and demand response using smart thermostats and the internet to affect air conditioning use. Beginning in 2007, smart thermostats will be offered through the Technology Incentives Program. |
Additional Programs |
|
Summer Saver |
The Summer Saver Program is a direct load control program available to residential, small business customers (<100kK) and agricultural customers (<200kW) with central air conditioners, water heaters, pool pumps or irrigation pumps. Managed through a third-party, participant's equipment is automatically controlled during times of need. |
Clean Gen |
The Clean Gen Program is a voluntary program utilizing a customer's back-up generation system. Customers allow SDG&E to access this generation remotely during times of critical need, providing relief on the system within ten minutes. In exchange, customers' systems are upgraded to operate more efficiently. |
Peak Gen |
The Peak Gen program (formerly known as the Rolling Blackout Reduction Program) is designed for customers who have an on-site back-up generator and have the ability to reduce their load by at least 15% (minimum of 50kW). Participants receive a bill credit of $0.35/kWh. Peak Gen is initiated when the CAISO requests firms lead curtailments (Stage 3 emergency) or when firm load curtailment is imminent. |
Optional Binding Mandatory Curtailment (OBMC) |
The Optional Binding Mandatory Curtailment (OBMC) is a voluntary program whereby participates are exempted from rolling blackouts/rotating outages in exchange for reducing power on their circuit upon 15-minute notice from SDG&E during an electricity shortage. Customers who can comment to reducing up to 15% of the total circuit load during an OBMC even are eligible to participate. |
Scheduled Load Reduction Program (SLRP) |
Customers electing to participate in the SLRP are required to reduce their electric load during specific time periods of their choosing, and are paid an incentive for that reduction, which must be a minimum reduction of 100 kW or 15% of total load. |
Technical Assistance and Technology Incentives |
|
Technical Assistance |
The Technical Assistance Program (TA) is an energy audit service designed to help customers identify methods for reducing energy costs and to encourage greater participation in demand response and energy efficiency programs. The TA program currently includes two types of services, a cursory energy audit to identify the potential areas of opportunity, and an in-dept assessment where a CEC-accredited auditor or qualified engineer will make specific recommendations, both low-cost and no-cost, and calculations of kW and kWh savings. | |
Technical Incentive |
The Technology Incentive (TI) program is a financial incentive program intended to encourage customer adoption and installation of demand response measures. The financial incentive is associated with the level of energy reduction (kW) the technology can provide. Eligible technologies include, but are not limited to, smart thermostats, energy management systems, remote switches, dual-level lighting, software upgrades and the addition of control points. SDG&E proposes and incentive structure that decreases each year. |
Emerging Markets & Technologies |
Emerging Markets and Technologies Program facilitates the development of new demand response programs and technology. SCE plans to focus on three areas: 1. demand response technologies; 2. demand response codes and standards and ; 3. innovative technologies. |
Statewide Pricing Pilot |
SPP research activities include the Advance Demand Response System (ADRS) pilot, analysis of the CPP-V Track A small C&I customers, and the Information Display Pilot (IDP). For 2006, SDG&E is requesting funding for the on-going administrative, billing, notification, maintenance, customer support, meter maintenance, and deferred decommissioning costs of the SPP Program. |
Customer Education, Awareness & Outreach |
|
Customer Education, Awareness and Outreach Umbrella |
The Customer Education, Awareness and Outreach Umbrella aims to educate customers on the concept and benefits of demand response, as well as how demand response fits into the customer's overall energy management mix. This will be accomplished through the use of mass media channels, e.g. print and broadcast advertising together with targeted communications, e.g. direct mail, Account Executive contact and educational resources, e.g. online tools, audits, seminars, workshops and community events. |
Flex Your Power Now |
The primary goal of "Flex Your Power Now" (FYPN) is to reduce peak period usage during targeted summer days when the State has heightened supply/demand balance concerns. FYPN is targeted at all customers, including residential and small business customers, and relies heavily upon mass media announcements during those targeted summer days. SDG&E is requesting approval to continue collaboration with its statewide partners by extending FYPN through 2008. |
Emerging Markets Program (EMP) |
The Emerging Markets Program is aimed at bringing novel technologies to market by partnering with inventors, manufacturers and distributors, of products that have strong potential to reduce demand during periods of higher energy prices or tight energy supplies. Through collaborations with trade associations and research organizations, new products and technologies will be identified for evaluation. If deemed an appropriate vehicle to bring new product to market, this program may incent manufacturers via a "Golden Carrot" opportunity where a set amount of funds are made available to motivate technological progress for a certain end use. After successful demonstrations, market consultants, manufacturers and distributors or trade groups will be used to develop the target market or niche. |
Community Outreach Program |
The Community Outreach Program will provide direct interaction and communications to local municipalities and business communities within SDG&E's service territory to broaden awareness of demand response. The messaging to small and medium commercial customers will incorporate ways for businesses to help manage energy costs through various SDG&E tools and programs. SDG&E will specifically target small to medium size business customers via business associations and trade organizations. |
Circuit Saver Program |
The Circuit Saver Program is a focused education program aim to increase demand response participation from customers in the high growth areas. Customers who are served from electric distribution circuits in SDG&E's highest growth areas receive additional information regarding load reduction tactics and reliability programs that are available to them. Residential and small commercial customers have had very little exposure to demand response programs. Circuit Savers will use a variety of community outreach efforts such as booth displays at local community events (Earth Day Events; Fiesta del Barrio Fair, Carlsbad; various Cinco de Mayo Festivals; Senior Expos & Health Fairs; community newspapers and direct mail. Circuit Savers will work in conjunction with the AMI rollout, targeting those customers receiving the AMI technology and located in the high growth areas. |
kWickview |
kWickview is a Web-based energy management tool SDG&E provided free of charge to customers with IDR meters installed. kWickview furnishes 15-minute interval data on a daily or monthly basis to help customers better understand and manage their electric consumption and costs. By identify energy use patterns; customers have the information necessary to explore ways to reduce their energy costs. |
Nonprofit Outreach Program |
There are more than 7,000 nonprofit organizations in San Diego County with more than 61,000 employees. Nonprofits have inroads to employees, volunteers, board members, and the populations they serve to spread the demand response message. This program will leverage their electronic community network to optimize the number of people who hear and understand demand response, understand the benefits of demand response, and decide to take action when necessary. It will tap into the nonprofit infrastructure organizations that have the capability for large electronic distribution. SDG&E will partner with nonprofit organizations to help the community in capacity building and ensure efficient use of resources. |
Information Display Pilot |
The Information Display Pilot (IDP) is a pilot information program that worked in conjunction with the Statewide Pilot Program (SPP). Customers are provided with an information treatment that includes an electronic newsletter, e-grams and communication devices. These information treatments provide a signal to customer that it is time to take action. |
PEAK Student Energy Actions Program |
The PEAK Student Energy Actions Program is a comprehensive student learning experience intended to teach elementary school children the value of smart energy management. Managed by the Energy Coalition, the overall goal of the PEAK program is to instill an efficiency ethic in students through standards-based lessons, hands-on activities, and real-world application in their homes, schools, and communities. Engage elementary school students could serve as advocates of smart energy management in their homes, schools, and communities. |
Water District Partnership |
Decision 05-01-056 authorized $75,000 in funding for SDG&E to perform a "Water District Partnership Study" (Study) in 2005. The Study evaluate whether to encourage (through financial incentives) water districts to install efficient natural gas powered engine systems for water pumping in return for allowing SDG&E to operate those engines during critical peak periods. The study found that at the three sample pumping stations studied, "...none of the gas equipment installation scenarios would result in a payback period of less than 20 years... However, payback periods of less than 20 years could be achieved by subsidizing part or all of the upfront capital costs." (Study, pg 2) The study finds that although peak energy demands could indeed be reduced by utilizing the gas-fired equipment during on-peak or semi-peak hours, it was not economic to operate the equipment during off-peak hours. And, significantly, the study notes that for the three sample sites studied, "potential economic feasibility could only be achieved by utilizing gas equipment during a large percentage of peak hours, and (L)imiting the use of the equipment to the 12 CPP operational days during the year is not feasible from an economic standpoint." (Study, pg 2) Given that a study exploring these mid-term technologies have been identified, SDG&E will continue to evaluate these alternatives within its existing funding authorizations, and may, at a later date, develop further specific program proposal to present to the Commission. |
Other Programs |
|
Automated Demand Response Program (ADRS) |
ADRS is a program for residential customers who are currently participating in the SPP. ADRS enables web-based control of the thermostat |
Competitive Bid |
The DR Competitive Bid Program will allow third parties with demand response solutions to propose effective DR programs to the utility for integration into the utility's DR portfolio. Proposals will be evaluated against criteria to be established by a Demand Response Project Team. |
(END OF ATTACHMENT C)
James Weil |
William H. Booth Lon W. House |
(END OF ATTACHMENT D)
