ALJ/DMG/avs Date of Issuance 10/10/11

Decision 11-10-003 October 6, 2011

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Oversee the Resource Adequacy Program, Consider Program Refinements, and Establish Annual Local Procurement Obligations.

Rulemaking 09-10-032
(Filed October 29, 2009)

DECISION FURTHER REFINING THE
RESOURCE ADEQUACY PROGRAM REGARDING
DEMAND RESPONSE RESOURCES

TABLE OF CONTENTS

Title Page

DECISION FURTHER REFINING THE RESOURCE ADEQUACY PROGRAM REGARDING DEMAND RESPONSE RESOURCES 2 2

1. Summary 2 2

2. Background 2 2

3. Demand Response Issues 5 5

3.1. Demand Response Resource Dispatch by Local Area 5 5

3.1.1. Discussion 7 7

3.2. Maximum Cumulative Capacity 13 13

3.2.1. Discussion 15 15

3.3. Resource Adequacy Counting Method
for the Proxy Demand Resource Product 16 16

3.3.1. Load Impact Measurement 17 17

3.3.1.1. Discussion 20 20

3.3.2. Local Area Credit for the Proxy
Demand Resource Product 21 21

3.3.2.1. Discussion 22 22

3.3.3. Use of Fossil-Fueled Emergency Back-Up
Generation a Proxy Demand Resource for RA Credit 22 22

3.3.3.1. Discussion 26 26

3.3.4. Incorporation of Standard Capacity
Product Rules for Demand Response Resources 31 31

3.3.4.1. Discussion 32 32

4. Comments on Proposed Decision 32 32

5. Assignment of Proceeding 32 32

Findings of Fact 32 32

Conclusions of Law 33 33

ORDER 34 34

DECISION FURTHER REFINING THE
RESOURCE ADEQUACY PROGRAM REGARDING
DEMAND RESPONSE RESOURCES

1. Summary

In this decision, we adopt the following changes to the current Resource Adequacy (RA) rules for demand response resources:

· A demand response resource may receive local RA credit only if it is capable of being dispatched by local area. This requirement goes into effect in 2013. This rule does not apply to dynamic pricing programs.

· Creation of a new Maximum Cumulative Capacity bucket for demand response resources for 2013.

In addition, we adopt as a policy statement that fossil-fueled emergency back-up generation resources should not be permitted to receive system or local RA credit as demand response resources. We will consider specific rules related to this policy in future RA proceedings.