CEC Questions Demand-Response Push

Concerned about keeping up with electricity demand, the California Energy Commission is considering invoking yet-unused authority to impose ambitious and mandatory demand-response requirements on investor-owned utilities. The standards could reduce peak power demand by more than 20 percent and save utility ratepayers $11 billion in 20 years, according to an Energy Commission consultant. The issue was discussed at a June 6 CEC workshop—where a California Public Utilities Commission member sat on the dais—exploring the legal and technical issues involved should the Energy Commission set such a standard. In 2002—right after the energy crisis when regulation and oversight at some levels replaced the deregulated market—lawmakers gave the California Energy Commission authority to create state policy through the Integrated Energy Policy Report. That report to the governor and Legislature is supposed to act as the guideline for the state’s evolving energy policy because the market alone is no longer trusted to do so. Now, the commission claims it can use that authority to adopt state standards for electricity demand-response conservation. However, it isn’t sure whether to exercise the power. “As the commission decides to use—whether to use—its authority,” noted Energy Commission chair Jackie Pfannenstiel, it is “struggling” with a far different situation than five years ago. The economy has changed, the regulatory situation is different, and the technology has grown, she noted. Legally, the commission could regulate only investor-owned utilities. Municipal utilities would be exempt, but their boards could adopt the standards on their own, according to Jonathan Blees, commission counsel. The major technological innovations that enable a standard at this point are: -Dynamic pricing—where a smart meter gives consumers price indications on their electricity use. -Programmable Communication Thermostats—one-way receivers for demand-response signals sent when electricity supplies grow short. They could be placed on air conditioners and pool pumps, for instance. The communications devices cost under $100 each now and are expected to decline in price. They are aimed at residential customers. -Automated demand-response standards that apply to both residential and commercial customers. Combined with current voluntary “dynamic pricing”—where customers do their best to keep the grid going in times of supply shortages—the technologies could save $11.4 billion over 20 years, according to Ahmed Faruqui, principal in the Brattle Group, CEC consultant in this program. The measures are also likely to result in a 20.2 percent reduction in use during peak shaving hours, he claimed. Currently, this summer’s peak shaving results are expected to come in at 2.2 percent, according to Faruqui. The state set a 5 percent reduction for demand-response this year. The unidirectional communicating thermostats appear to have a more welcome response than smart meters’ two-way communications. They not only are relatively inexpensive, but smart meters—which also allow customers to send information to utilities—are more problematic, according to Ron Huffman, CEC project manager for energy systems integration. “Then you have the law of unintended consequences,” he added.

Over 11K Stories!

| Independently Powered Energy News

CEC Questions Demand-Response Push

vdharadmin

Related Posts

Op-Ed: Before and After Net Energy Metering 3, A Thought Experiment

Auld Lang Zine

CPUC Chops Solar Rooftop Payments & Adds Battery Incentives, Few are Happy

GUEST JUICE: More Wind, More Flexibility