ALJ/MLC/jva Mailed 11/21/2005
Decision 05-11-009 November 18, 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) |
DECISION CLOSING THIS RULEMAKING
AND IDENTIFYING FUTURE ACTIVITIES
RELATED TO DEMAND RESPONSE
This decision closes Rulemaking (R.) 02-06-001 as most of the activities identified in the proceeding have been completed. We identify additional activities necessary to ensure that our demand response programs provide full value to California ratepayers and establish a timetable for moving forward on those activities.
1. Background
We began this rulemaking1 in June 2002, as a policymaking forum to develop demand response as a resource to enhance electric system reliability, reduce power purchase and individual consumer costs, and protect the environment. The desired outcome of this effort was that a broad spectrum of demand response programs and tariff options would be available to customers who make their demand-responsive resources available to the electric system.
At the outset we recognized the need for a strategic approach to the orderly development of demand response capability in the California energy market. To that end, we coordinated this rulemaking with decision makers from the California Energy Commission (CEC), and previously, the California Consumer Power and Conservation Financing Authority (CPA), based on an interagency working model developed by the assigned Commissioner.2
That model relied upon three working groups. The first, Working Group 1 (WG1), comprised of agency decisionmakers (assigned Commissioner Michael Peevey, CEC Commissioner Arthur Rosenfeld, and CPA Director Sunne W. McPeak, also known as "the WG1 principals"), and supported by the assigned Administrative Law Judge (ALJ) and advisory staff from the CPUC and CEC, was responsible for shaping the rulemaking record by providing overall policy guidance to parties at key points in the proceeding. WG 1 focused its efforts on the development of a long-term vision for the development of demand responsiveness in California by setting a framework, developing goals, and focusing on how demand response can and should be integrated with the utilities' overall procurement responsibilities.
The second, Working Group 2 (WG2), is comprised of active parties who are interested in developing demand response programs for large customers (>200 kilowatt (kW)) in peak monthly demand). The meetings of this group are facilitated by agency staff supporting WG1 decision-making activities. The third, Working Group 3 (WG3), is comprised of active parties who are interested in developing demand response programs for small commercial/residential customers. Like WG2, the meetings of WG3 are facilitated by agency staff supporting WG1 decision-making activities.
The first year of this proceeding resulted in adoption of two main decisions. The first (Decision (D.) 03-03-036) adopted the Statewide Pricing Pilot (SPP) which was designed to test the impact of time-of-use and critical peak pricing tariffs on residential and small commercial customer usage patterns on a pilot basis. The second (D.03-06-032) adopted demand response program plans for customers with load exceeding 200 kW and established annual megawatt (MW) targets to be met through demand response.
On November 24, 2003, the Assigned Commissioner issued a scoping ruling for the second phase of this proceeding. The ruling set aside some issues for future proceedings and identified the following issues as the focus of Phase 2.
· Analysis Framework for the Advanced Metering Infrastructure Business Case, Utilizing Utility, Customer and Societal Perspectives
· AC Cycling as a Control Technology that Interfaces with AMI Elements
· Real Time Pricing (RTP) Tariff Development
· Ongoing Implementation Issues, specifically, resolution of:
(1) CPA/Demand Reserves Partnership (DRP) program disputes between California Department of Water Resources (DWR) and the utilities;
(2) delineated agricultural customer participation issues; and
(3) delineated metering service "clean-up" issues.
· A planning process for any near term adjustments in 2004 goals as part of achieving 2007 demand response targets.
The rulemaking was also the forum for adoption of demand response budgets and program plans for 2004 and 2005.
The various Working Groups assisted in developing program plans and budgets as well as evaluating the results of the programs. In particular, WG3's Evaluation Subcommittee conducted numerous and extensive meetings concerning the proper methodology for analyzing the SPP results. The work of the evaluation subcommittee both contributed substantive to the final SPP Report issued by Charles River Associates as well as helped ensure broad support for the results of the consultant evaluation. This work is not reflected on the record as no reports were filed by the subcommittee or by WG3, but we note it here to recognize the efforts of all parties to assist in promoting demand response efforts outside of the formal Commission process.
1 The Commission's rulemaking named as respondents the following investor owned utilities: Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E), and Southern California Edison Company (SCE).
2 See, Ruling Following Prehearing Conference, dated August 1, 2002; and Assigned Commissioner's Ruling and Scoping Memo, dated August 16, 2002.
