Demand Response:
Implementation of Direct Participation
in CAISO Market



In November 2012, the CPUC issued a Decision which adopted Electric Rule 24Rule 32 that governs direct participation of Demand Response providers in the California Independent System Operator’s (CAISO) energy markets. Direct Participation is a process by which retail Demand Response can participate in the CAISO’s wholesale markets. The Decision also permits the utilities to file applications requesting recovery of costs to implement Demand Response direct participation.
On June 2014, the utilities filed Applications seeking recovery of costs associated with demand response direct participation.

On March 26, 2015, the CPUC issued a Decision approving recovery of utilities’ request for implementing an initial level of Demand Response direct participation. 

  • Edison:  $2.7 million 
  • PG&E:    $2.9 million 
  • SDG&E:  $1.8 million  
  • Total:       $7.4 million 

The Decision requires the utilities to provide support for direct participation for day-ahead  and real-time services for a limited number of customers in the CAISO market. The limits for the initial implementation step are: 

  • Edison: 14,000 customers  
  • PG&E:   10,000 customers  
  • SDG&E:  7,000 customers 

In the next phase of the proceeding, the CPUC will consider expanding the limit on the number of customers based on experience in the initial phase. 

ORA Position

ORA supports the CPUC’s Decision to implement a multiple step approach for the direct participation of retail customers in CAISO markets, as it would allow the CPUC to be informed by experience and data from the initial step to consider increased participation in the CAISO market in subsequent steps. 

In particular, ORA supports: 

  • Automated Processing System: Edison’s and SDG&E’s proposals to utilize automated systems to process customer forms and direct participation information to implement Rule 24 / Rule 32. Automation is efficient and would scale up for future increased participation.   
  • Facilitating Direct Participation of Retail Customers to Provide Real-time Services to CAISO: This would allow Demand Response to meet the CAISO’s operational needs in the initial phase. However, ORA advocated that the CPUC should first develop a thorough understanding of the work needed before requiring the utilities to support such participation.  

ORA has concerns regarding approval of PG&E’s proposal which would rely on temporary computer desktop systems given that this system would later need to be replaced with automated systems to allow additional customer participation, resulting in unnecessary additional costs. ORA advocated that PG&E should propose an automated customer participation system, similar to the other utilities. 

See ORA’s March 12, 2015 Opening Comments on the Proposed Decision. 

See ORA’s December 22, 2014 Opening Brief. 


Proceeding Docket

See the Proceeding docket. 


Other Resources

ORA Demand Response Portal