V. Summary of Utility Proposals

A. PG&E

In response to the August 9, 2006 ruling, PG&E proposes improvements to many of its existing programs and new programs that it expects will increase available load reductions by 235 MW by June 2007 relative to the 479 MW load drop the utility experienced in July 2006 when all programs were called. PG&E's proposals would increase potential load drop in 2008 by an additional 50 MW. PG&E also proposes stepping up its marketing efforts and making some programs more attractive by tailoring them to customer needs. New programs proposed by PG&E include an Auto DR program and a program to retrofit customer-owned back-up generation (BUG). On the basis of performance in July 2006, PG&E believes it can expect about 714 MW of load reduction in 2007 if its proposed programs are approved and implemented.

PG&E does not seek additional funding for the program improvements it describes, stating its intent to reallocate existing funds, and the possibility that it may seek additional funding at a later date. For example, PG&E states that it intends to file an application in November 2006 that will expand its AC Cycling program. A number of other proposals discussed in PG&E's August 30, 2006 are still in the conceptual phase and will be proposed formally through subsequent advice letters and applications.

The follow table summarizes PG&E's proposals:

Program	Proposed Augmentation	Cost Estimate	Incremental MW per year (2007-2008)
AC Cycling13	Begin full implementation in 2007.	2007: $7.5 M 2008: TBD	2007: 5 MW 2008: TBD
Auto DR	Convert pilot program to further develop automation and encourage the installation of enabling technologies for CPP customers using TA/TI funds. Additional $50/kW for a total of $300/kW TI incentive for auto DR technology.	$4.0 M	2007: 15 MW 2008: 15 MW
Back-Up Generators (BUGs)	A new program to convert diesel-powered back-up generators to dual-fueled diesel/natural gas.	$24 M	2007: 50 MW 2008: 50 MW
BIP and Nonfirm	Increase incentive payment for Option A: $8/kW for 100 kW to 500 kW reductions, $8.5/kW for 501 kW to 1 MW, and $9/kW for 1 MW or greater. Replace existing Option B option with new E-BIP option, which pays $500/MWh, with no capacity payment, no penalty for non-participation, 4 hours' notice, and called only when deemed prudent by PG&E. Available to aggregators. Re-open non-firm program to new-customers for 2007.	$3.3 M	2007: 70 MW 2008: 25 MW
Program	Proposed Augmentation	Cost Estimate	Incremental MW per year (2007-2008)
Demand Bidding Program (DBP)	Create "no-bid" option that does not require customers to enroll to be eligible for incentive payment. (No-bid option has lower incentives, requires 10% minimum reduction, has shorter event period, and is summer-only). Move day-ahead notification from 3:00 p.m. to noon. Allow Friday notification for Monday. Increase incentives, offer additional incentive for reductions during CAISO Stage 1 emergencies.	$7.5 M	2007: 25 MW 2008: 25 MW
Extend Business Energy Coalition (BEC)	Expand and expedite pilot program, which targets hard to reach customers. Also requesting seven-year extension.	TBD	2007: 25 MW 2008: 25 MW
Expanded TA/TI	Increase TA payment to $100/kW with cap of $100,000. Increase TI payment to $250/kW for equipment installation and an additional $50/kW for auto DR.	$10 M	2007: 10 MW 2008: 10 MW

Program	Proposed Augmentation	Cost Estimate	Incremental MW per year (2007-2008)
RFPs and Contracts	Issue an RFP for DR proposals for up to five summer periods to provide bidders a full opportunity to develop and propose innovative ways to increase DR. Bidders may include DR aggregators, PG&E customers, ESPs, and wholesale customers	$0.4 M	2007: 35 MW 2008: 35 MW
Admin & Marketing	Increase marketing efforts to encourage customers to sign up for existing and new DR programs.	$12 M	N/A
Online DR Enrollment	Customers can enroll in DR programs on-line.	$0.95 M	N/A
SPP Extension	Extend rate through June 2007, when the residential CPP rate will be made available.	$1.0 M	N/A
SCAPP (SF Power)	Extend 2006 deadline to June 2007 for recruitment of 1 MW to receive an additional $250,000 funding as approved in Amended Settlement. Institute peak load shifting and submeter aggregation programs.	$0	1 MW
CPP	Eliminate zones and call events based on system-wide average temperature. Earlier notification time.	$0	7 MW
Total		$70.25 M	2007: 235 MW 2008: 285 MW

B. SCE

SCE proposes some modifications to its existing demand response programs and proposes to implement a new Auto DR over two years, all by reallocating funds from existing programs. SCE recommends reallocating $300,000 of its existing budget to demand bidding so that it may increase the incentives. SCE estimates this effort would make up to 25 MW available in 2007.

At the workshop, SCE also explained several administrative changes it is making to some of its programs to make them more attractive to customers and thereby increase participation. SCE has offered other demand response program changes by way of advice letter.

The following summarizes SCE's program proposals:

Program	Proposed Augmentation	Cost Estimate	Incremental MW per year (2007-2008)
Auto DR	New program to use automatic equipment to facilitate activation of demand reductions during events. Recruit ten to twenty facilities to participate in fully-automated CPP or DBP. Use TA/TI funds to encourage the installation of Auto-DR. Increase incentive to $250/kW for energy management systems installed in conjunction with Auto-DR.	$1.79 M	10 MW
DBP	Increase incentive to $0.75/kWh for summer 2007 only. "Softer" trigger. Allow standing bids. Lower minimum bid from 200 to 100kW for aggregated accounts and from 50 to 30kW for individual participants. Allow online enrollment.	$0.3 M	25 MW
Total		$2.09 M	35 MW

C. SDG&E

SDG&E generally proposes modifying some programs to include "soft" triggers, which would provide SDG&E with discretion as to when to call an event rather than always calling for load reductions according to pre-established criteria. SDG&E wishes to standardize trigger mechanisms across programs, and also align incentives across programs to reflect the value of load reductions in each. It plans to simplify enrollment in ways that accommodate customer interests, continue the Smart Thermostat program into 2007, improve opportunities for load aggregator participation and introduce a new program targeted at permanent load shifting that would take advantage of TA/TI funds. The program changes it seeks here would not affect SDG&E's total authorized budget and program costs would come from existing budget item.

The following summarizes SDG&E's program proposals:

Program	Proposed Augmentation	Cost Estimate14	Incremental MW per year (2007-2008)
C&I 20/20 (Peak Day Credit) Program	Extend changes approved for 2006 program to 2007, "Softer" trigger; set maximum # of events to 15.	$55,627	2007: 20 MW 2008: 14 MW
DBP	Merge DBP and E-DBP, increase incentives to $.50/kWh for Day-Ahead and $.60/kWh for Day-Of, use enrollment cards in place of contracts; allow standing bids.	$0	2007: 6 MW 2008: 6 MW
BIP	Reduce penalties by 25%.	$0	2007: 2 MW 2008: 2 MW
Residential Smart Thermostat	Continuation of program (2 MW), currently scheduled to terminate at the end of 2006, through 2007.	$410,264	0 MW
AC Cycling (Summer Saver)	Add new options: 100% cycling for residential and 30% cycling for commercial, include pool pumps and hot water heaters, include weekends	(confidential)	2007: 18 MW 2008: 4.7 MW
CPP	"Softer" trigger, increase maximum # of events to 15.	$34,210	2007: 8 MW 2008: 6 MW
TA/TI	Extend 2006 TI payment of $250/kW through 2007.	Embedded in other DR programs
Peak Load Management	Promote technologies which permanently shift peak demand as subset of TA/TI.	N/A
Program	Proposed Augmentation	Cost Estimate15	Incremental MW per year (2007-2008)
Auto DR	Promote automatic demand reduction technologies (subset of TA/TI).	N/A
Third-Party Aggregators	Offer aggregators more opportunity for participation (BIP, CBP and all-source RFO).	Embedded in other DR programs
In-home display	Pilot program of 300 residential customers to measure customer behavior changes with real-time energy usage information.	$430,836	N/A
Water Agency	DR programs targeted for water agencies, covered by separate AL.	Advice Letter filing by 10/31/06
TOTAL		$500,101	2007: 54 MW 2008: 32.7 MW

¹³ Budget and MW for only Year 2007.

¹⁴ Implementation cost are the difference between the Total Program Budget filed in August 30^, 2006 Augmentation proposal and the Total Program Budget in Settlement approved in D.06-03-024.

¹⁵ Implementation cost are the difference between the Total Program Budget filed in August 30^, 2006 Augmentation proposal and the Total Program Budget in Settlement approved in D.06-03-024.