Demand Response History in California

In the wake of the 2006 extreme summer heat wave in California, Demand Response (DR) programs took a prominent role at the CPUC. Before the heat wave, the CPUC had already recognized the importance of DR as an alternative to adding conventional generation to meet the growing demand for electricity in California.

The CPUC had authorized $262 million for Demand Response programs for year 2006-2008. These programs included continuation of several emergency/reliability programs that are triggered in extreme heat wave emergencies and several new price responsive programs that are triggered to reduce load in response to very high prices and temperatures that could eventually cause emergencies. In the aftermath of the 2006 heat wave, the CPUC further augmented DR programs to include innovative programs such as AutoDR, Permanent Load Shifting (PLS), and long-term Demand Response contracts using third party aggregators.

Since much of California’s peak demand is created by heavy air conditioning usage on hot summer days, the CPUC also authorized Pacific Gas and Electric Company (PG&E) to start an Air Conditioning Cycling (AC Cycling) program and authorized Southern California Edison to double its existing AC Cycling program.

On parallel track, the CPUC authorized the three investor owned utilities to develop business cases for deploying advanced meters for all residential and small commercial customers. The advanced meters have the capability to track consumption in small time increments, such that the information can be used by utilities and consumers for better informed energy management. Once the Advanced Metering Infrastructure  (AMI) is fully deployed, AMI meters will enable residential and small commercial customers to participate in a variety of DR programs designed to reduce peak time consumption of electricity.

Because many of the Demand Response programs were relatively new, the CPUC initiated a Rulemaking that:

  1.  Developed protocols to estimate demand reduction of various types of Demand Response programs [D.08-04-050] 
  2.  Developed protocols to estimate cost-effectiveness of Demand Response programs [D.10-12-024]
  3.  Adopted a Settlement to transition emergency-triggered programs to price-responsive programs [D.10-06-034]
  4. Developed rules for direct participation of Demand Response in the California Independent System Operator (CAISO) wholesale market

In a subsequent Rulemaking, the CPUC held a workshops in June 2012 to discuss potential cost-effectiveness methodologies, including whether to value ‘non energy benefits’ such as environmental and societal factors, which may be useful in supporting broader California policy goals. The CPUC’s August 2012 Ruling posed questions to parties and it will use the responses to those questions to establish guidance for the utilities to develop their post-2014 Energy Efficiency and Demand Response program portfolios and for other demand-side evaluation purposes.


Demand Response Issues

Demand Response Program Portfolios
DR programs are funded in 3-year cycles. Portfolios are a compilation of a diverse selection of demand response programs that address a wide variety of strategies.   

Long-Term Strategic Plan

Through integrated Demand Side Management strategies, Demand Response opportunities will be identified to maximize customer benefits and grid reliability along with long-term cumulative energy savings and promote market transformation of EE programs.

Innovative Demand Response Pilots
Pilot projects to examine the ancillary service benefits of AC Cycling programs, the potential of demand response to integrate with intermittent renewable resources, and the potential demand response benefits of plug-in vehicles were included in the 2009-2011 DR portfolio filings.