II. Background

On March 15, 2006, the Commission issued D.06-03-024, which adopted 2006-2008 budgets for the demand response programs of SCE, PG&E, and SDG&E. These program budgets were proposed as part of a settlement filed by the active parties to the proceeding.

Since the issuance of D.06-03-024, the State of California experienced an unusually intense heat wave in July 2006, which at times strained the state's electrical system. In an effort to make the most of existing opportunities to protect the state's electrical system from compromises to its reliability, the Commission reopened this proceeding by ruling dated August 9, 2006 to augment utility demand response programs for 2007 and 2008. The ruling directed the three applicant utilities to propose program augmentations and improvements and also directed each utility to provide a preliminary assessment of the performance of each demand response program during the month of July 2006. This assessment would help the Commission improve demand response programs in the near term. On August 22, 2006, the Commission issued a second ruling in these consolidated proceedings directing the utilities to propose automatic demand response (Auto DR) programs, which envision the installation of control equipment that would affect load reductions. The utilities were also directed to identify ways to expand the role of demand aggregators, to encourage the deployment of Auto DR, increase program participation, and improve program performance.

The utilities filed proposals and program assessments on August 30, 2006. The Commission subsequently conducted a workshop on September 6, 2006, at which the utilities and other parties discussed program elements and potential improvements. On September 15, 2006, parties filed opening comments on the utilities' proposals and reply comments on September 22, 2006. Parties that filed opening comments are PG&E, SDG&E, SCE, Aglet Consumer Alliance (Aglet), Association of California Water Agencies (ACWA), California Large Energy Consumers Association and the California Manufacturers and Technology Association (CLECA/CMTA), Division of Ratepayer Advocates (DRA), EnergyConnect, Inc (ECI), EnerNOC, Inc. (EnerNOC), Energy Users Forum (EUF), Ice Energy Inc. (Ice Energy), San Francisco Community Power (SF Power), Silicon Valley Leadership Group (SVLG), and The Utility Reform Network (TURN). PG&E, SDG&E, SCE, Aglet, ACWA, the California Independent System Operator (CAISO), DRA, EnerNOC, and SVLG filed replied comments.

Some parties included in their filings assessments of advice letters the utilities filed in recent months seeking new or modified demand response programs, such as SCE's Advice Letter 2032-E, which proposes changes to its I-6 tariff and Base Interruptible Program (BIP) and SCE's Advice Letter 2034-E, seeking authority to expand its Air Conditioning (AC) Cycling program. Because the Commission did not grant the requests of some intervenors to merge those advice letters into these proceedings, we do not address the advice letter topics here.