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R.09-10-032 2011 RA Phase II Proposals Workshop

R.09-10-032 2011 RA Phase II Proposals Workshop. January 18 , 2011 Golden Gate room 9:30 am- 4:30 pm. The Basics. Bathrooms - 2 locations In the main CPUC lobby towards the cafeteria Across the courtyard through the doors to the south side of the building

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R.09-10-032 2011 RA Phase II Proposals Workshop

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  1. R.09-10-032 2011 RA Phase II Proposals Workshop January 18 , 2011 Golden Gate room 9:30 am- 4:30 pm

  2. The Basics • Bathrooms - 2 locations • In the main CPUC lobby towards the cafeteria • Across the courtyard through the doors to the south side of the building • Refreshments- Cafeteria, Peets Coffee, restaurants in the area • Participants on the phone- all are on mute. If you have a question please press *6 to unmute your phone then *6 to remute your phone when finished. • Participants in the room- please ensure that you speak near a microphone for the phone so people on the phone can hear you. • There are a lot of topics on this agenda – if time runs short, we may take advantage of the second scheduled day for the Energy Division proposals or finish a little after 4:30 – we will see how it goes.

  3. Agenda

  4. Agenda cont.

  5. Objectives • Understand the Phase II proposals • Provide parties with information that will better inform comments

  6. Agenda

  7. CAISO’s Presentation • place holder

  8. Agenda

  9. EnerNOC’s Presentation • place holder

  10. Agenda

  11. MCC Bucket for DR Background Why is it in the scope? To harmonize RA rules for supply-side resources, and make DR rules more similar to rules for conventional resources. Why is it important? Current RA Rules for DR are mostly for retail DR prior to PDR (see Figure 1 in the next page). Commission’s policy on IOUs’ aggregator contracts potentially evolving pending PDR market development and CPUC development of direct participation policy. PDR does not count towards RA obligation unless contracted by a LSE. DRPs are not necessary LSEs. Creating a MCC bucket that can accommodate DR will further harmonize DR with other RA resources. It will also: 1) create financial incentive & certainly that will encourage DRP participationsand 2) consistent RA rules allow closer coordination with & evaluation of other supply-side resources.

  12. MCC Bucket for DR Figure 1: RA Counting for DR Retail Event-Based DR LSE Load Forecast (Incl. non-event based DR) • Example: • 100 MW • 5 MW • = 95 MW RDRP Emergency Less Price Responsive Allocation of DR credit Aggregator Contracts Equal to ? LSE’s RAR (RA Obligation) PDR – Wholesale DR (LSE & non-LSE DRPs) MCC Bucket 1 (30-60 hr. May-Sept) Max =13.3% MCC Bucket 2 (160 hr./mo.) Max =18.2% MCC Bucket 3 (384 hr./mo.) Max =30.1% MCC Bucket 4 (All hr.) Max =100% MCC Bucket 0.5

  13. MCC Bucket for DR • EnerNoc Presentation • Q+A

  14. Agenda

  15. Agenda cont.

  16. Energy Division DR Proposals • Proposal 6 – Implementation of the cap on RA credit as adopted in D.10-06-034 for reliability-based Demand Response (DR) programs • Proposal 7 – Prohibition on RA credit for Proxy Demand Response (PDR) using Back-up generators • Proposal 8 – Requirement for DR resources to be available up to 4 hours per event day for three consecutive days

  17. Energy Division Proposal 6 Background: Decision (D.)10-06-034 adopted a Settlement Agreement . As a part of the Settlement, Parties agreed to a “CPUC enforced annual limit designed to limit reliability-based DR program capacity to a specified percent of the CAISO’s all-time coincident demand, which is currently 50,270 MW”. The annual RA credit caps plus a 10% “tolerance band” applicable to the emergency-triggered DR programs are as follows: • In 2012, 3% of the CAISO’s all-time coincident demand • In 2013, 2.5% of the CAISO’s all-time coincident demand • In 2014, 2% of the CAISO’s all-time coincident demand

  18. Energy Division Proposal 6 Proposal: Pursuant to the Settlement adopted in D.10-06-034, for 2012 RA, Energy Division will ensure that the DR program totals for specified reliability-based DR programs allocated towards RA credit for each IOU would be less than or equal to the following amounts: • PG&E: 543.9 MW • SCE: 1087.8 MW • SDG&E: 27.2 MW • Total : 1658.9 MW=50,270 MW x 3% x 1.1 (system peak x 2012 RA cap x 10% tolerance band)

  19. Energy Division Proposal 7 Background: The Commission established a firm policy that prohibits the use of Back-up Generation (BUG) as demand response in IOU funded DR programs. D.05-01-056, D.06-11-049 , and D.09-08-027 all denied requests for DR program funding because the programs used back-up generation.

  20. Energy Division Proposal 7 • Proposal: Consistent with the Commission policy on the use of BUG as Demand Response, Energy Division proposes that any DR program (operated by IOUs or non-IOUs) that uses BUG for demand reduction cannot count towards RA obligations for any CPUC jurisdictional LSE.

  21. Energy Division Proposal 8 Background: • RA resources other than demand response must be available to be called for a block of at least four consecutive hours on three consecutive days. • On August 27, 2010 an Administrative Law Judge Ruling in R.07-01-041 provided guidance for 2012-2014 Demand Response Applications. In this ruling IOUs were encouraged to make DR programs available for four hours per event on three consecutive days.

  22. Energy Division Proposal 8 Proposal: To be consistent with this DR program guidance and with qualifying capacity counting rules for other resources, Energy Division proposes elimination of the special DR-specific requirements related to event length and requiring Demand Response resources to be available for up to 4 hours per event and up to three days in a row in order to count for RA credit.

  23. Agenda cont.

  24. AReM’s Coincident Adjustment Proposal • The current approach established in 2005 uses a single system average coincidence adjustment factor to establish RA requirements for each LSE. • AReM proposes developing three or more LSE load profile categories such as : • (1). LSE serving all customer types • (2). LSE serving Commercial and Industrial customers • (3). LSE serving only residential and small commercial customers • Each LSE would be assigned to the load profile that most closely reflects their overall load profile

  25. AReM Presentation

  26. Agenda cont.

  27. AReM’s Cure Period for RA Filings Proposal Proposal: • LSEs will have five calendar days from the date of notification of an error by Energy Division to correct the RA deficiency without incurring any RA deficiency penalties. • If the LSE corrects the error the only penalty that would be applicable would be a late compliance filing described in Resolution E-4195. • If the LSE does not correct the error the applicable deficiency penalty adopted in D.10-06-036 would apply.

  28. AReM’s Presentation

  29. Agenda cont.

  30. CAISO Presentation

  31. Agenda cont.

  32. Energy Division Non-DR Proposals • Proposal 1 – Elimination of the use of Portfolio Resources • Proposal 2 – Elimination of the Preliminary Local filing • Proposal 3 – Aggregation of “other PG&E” local areas • Proposal 4 – Modification or elimination of the “replacement rule” for system RA capacity on planned outage • Proposal 5 – Timeline for changes to year-ahead load forecasts

  33. Energy Division Proposal 1 Background: • In 2006 Energy Division implemented the use of Portfolio Resources into the RA filing template by creating a resource tab called “Portfolio Resources”. • Since the implementation of this rule, LSEs have rarely filed using these resources, The last and only year LSEs used portfolio resources to meet their RA requirements was in the 2006 year-ahead filing. • It appears from the filings that LSEs do not prefer to use portfolio resources, and that any nonstandard provisions related to the use of portfolio resources is unnecessary.

  34. Energy Division Proposal 1 Proposal: Energy Division proposes eliminating the rule allowing the use of portfolio resources and deleting the “Portfolio Resource” tab from the RA System template starting with the 2012 template.

  35. Energy Division Proposal 2 Background: • Decision (D.)06-06-064 adopted the Preliminary local RA filing to facilitate coordination of the Local RA program with the California Independent System Operator’s (CAISO’s) Reliability Must Run (RMR) process. • Since 2006 the volume of RMR contracts has been decreasing substantially, and after Potrero retires, there will only be one RMR contract left, Oakland Power Plant.

  36. Energy Division Proposal 2 Proposal: Energy Division proposes that starting in 2011, when there will be only one RMR contract existing as of October 1, LSEs will not be required to file a Preliminary Local RA Filing. LSEs that contract with any resources with existing RMR contracts would be required to inform the CAISO and CPUC via email by the second Monday in September. For future years, if the CAISO begins to designate additional RMR contracts and more exist as of September of the year, the Commission may rethink this decision and reinstitute the Preliminary Local RA Filing.

  37. Energy Division Proposal 3 Background: • Decision (D.)06-06-064 established an approach for aggregation of certain local areas for 2007. The aggregation was done to address market power concerns. After determining each LSE’s local RA obligation in each local area, using the CAISO Local Capacity Requirement study (LCR), the Commission determined that six local areas within the PG&E territory (Humboldt, North Coast/North Bay, Sierra, Stockton, Greater Fresno, and Kern) should be aggregated as one for purposes of RA compliance. These are known as the “other PG&E” local areas.

  38. Energy Division Proposal 3 Proposal: Energy Division proposes to continue the aggregation of the “other PG&E” local areas on a permanent basis. If the total Local RA obligations as a ratio of NQC of resources changes substantially the Commission may wish to reopen the issue.

  39. Energy Division Proposal 4 Background: • D.06-07-031 adopted a counting protocol for units that take scheduled outage during the RA compliance year. This protocol been implemented consistently since 2006, regardless of changes to the CAISO markets or other RA program developments. • Through the course of multiple CAISO proceedings over the previous three years during the Standard Capacity Product effort, the CAISO and stakeholders (including the CPUC) have been developing an alternative to the current CPUC scheduled outage rule. • The CAISO currently has an open proceeding wherein CAISO is developing a supplier based process to coordinate outages on RA units, with the intent to develop a tariff to implement the process and coordinate with the CPUC RA program.

  40. Energy Division Proposal 4 Proposal: Energy Division proposes that the scheduled outage rule be retained in the CPUC RA program until the CAISO files, and the Federal Energy Regulatory Commission (FERC) approves, a tariff that provides for the following: (1.) Allows the CAISO to reliably operate the system including outage coordination with a reserve margin that may be lower than 15% due to resource outages. (2.) Allows the CAISO to accept or deny outages while operating the system within all the NERC and WECC constraints CAISO is required to observe.

  41. Energy Division Proposal 4 cont. (3.) Relies solely on CAISO and suppliers of RA capacity to manage and coordinate unit outages, without interaction with the LSE that contracted that unit or consultation of the contract with the unit. Relies solely on CAISO tariff authority over the unit as a provider of RA capacity (4.) Removes LSEs completely from the coordination of unit outages such that the CPUC would not need to maintain rules to govern LSE behavior related to performance of RA contracted and committed units. (5.) Create a specific penalty/incentive structure to limit the amount of time RA units are on outage.

  42. Energy Division Proposal 5 Background: • The RA program relies on the CEC adjusted forecasts as the basis for each LSE's RA obligations. • Energy Division uses these final load forecast to allocate Year-Ahead RA system and Local RA requirements which include allocations of any Demand Response, Cost Allocation Mechanism (CAM), and RMR capacity. • Currently the Year-Ahead RA forecast and compliance process maintains a 90 day window between notification of final RA obligations and submission of final Year-Ahead RA compliance filings • Some LSEs have requested the opportunity to update and revise their Year-Ahead forecast information closer to the due date for submission of the Year-Ahead RA compliance filings. • D.05-10-042 specified that LSEs may dispute adjustments made to their forecasts but did not include timelines for that dispute.

  43. Energy Division Proposal 5 Proposal: • Energy Division proposes to set a firm deadline for LSEs to submit revisions to their forecasts. Energy Division presents the following draft timelines to parties to sketch out the broad outline of a process for LSEs to make revisions to their year-ahead load forecasts. • Three timelines follow, which illustrate #1 the current process, #2 a firm deadline for revisions and possible reallocations based on revisions, and #3 a timeline for revisions without the Preliminary Local RA Filing based on Energy Division proposal #3. Parties are requested to comment on the following timelines.

  44. Timeline #1

  45. Timeline #2

  46. Timeline #3

  47. Agenda cont.

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