CEC Gives Green Light to Dynamic Pricing Report

Demand-response pricing?that is, finding economic incentives and disincentives to move energy demand away from peak electricity use?has been given a push. On October 22, the California Energy Commission sent to the legislature its report on demand-response pricing, outlining measures to create a more efficient, consumer friendly, nonpeak environment. CEC member Art Rosenfeld has urged the use of dynamic pricing signals. The CEC report looks at various options for a variety of customer classes and estimates of potential peak-load reductions. Industry has made it clear that it will oppose any mandates for time-of-use meters?and there is considerable debate over how extensively the meters should be used. Consumer groups are concerned about equity issues; specifically, who pays for the meters. For instance, last week the California Public Utilities Commission rejected Southern California Edison?s request to require businesses that use more than 200 kW to install interval meters. Edison installed 12,000 real-time meters for large customers with state funds. Legislation was passed in 2001 that allocated $35 million from the general fund to pay for the installation of meters. There are currently about 1,500 demand-response pilot projects in the three investor-owned utility territories. CEC staff plan to issue a follow-up technical report assessing the statewide pilot projects and to make recommendations to boost dynamic pricing?s effectiveness. At this point, staff recommendations to increase returns on demand-response measures ?wouldn?t hold water because [they don?t] pass the analytical test,? said the CEC?s Donald Kazuma. In other CEC action, the commission unanimously voted to extend the on-line date for Valero Refinery Co.?s 51 MW cogeneration plant by three years, although the project permit was fast-tracked back in 2001. Expedited licensing was created during the energy crisis to get more power plants on line to reduce the state?s energy vulnerability as soon as possible. The CEC agreed with its staff?s findings that Valero had a bona fide reason for seeking an on-line deadline extension to November 2005. CEC staff pointed to difficulties the refinery faced lining up project financing because of the lack of a stable market for the project?s excess output. They also found that the delay did not cause environmental impacts, and the first phase of the project, another 51 MW cogen plant, came on line as expected. Also approved by the CEC was a $1.3 million loan to the El Monte Unified School District to install a 240 kW natural gas micro-cogeneration system. It is expected to shave 23 kW off peak demand and save more than $158 million annually. Two grants were also approved, one to the Southern California Association of Governments (SCAG) and another for a greenhouse gas registry. SCAG was awarded a $250,000 grant to study the cost benefits of implementing energy-efficiency standards for commercial and multifamily residential construction that are stricter than the state?s Title 24 standards. The region encompasses 187 Southern California cities that are growing rapidly. A $200,000 grant was signed off on to support a legislatively created greenhouse gas registry. The next day, the state attorney general, along with a group of East Coast and Midwestern attorneys general, sued the U.S. Environmental Protection Agency for refusing to consider greenhouse gases a pollutant it can regulate. ?The U.S. EPA?s decision not to regulate greenhouse gas emissions, and that these emissions technically do not even count as air pollution, is flat wrong, disturbing, and dangerous to the health and safety of our citizens,? Attorney General Bill Lockyer stated October 23.

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CEC Gives Green Light to Dynamic Pricing Report

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