Delicacies of demand-response programs are set to be tested under a new deal approved by the California Public Utilities Commission June 12. The plan establishes a peak reduction baseline. It aims to solidify demand response targets by clearing up a \u201cwhat if\u201d situation from companies who may not be decreasing their load upon demand at times of peak energy use. Last year, for example, Pacific Gas & Electric signed up 140 (n)MW for its demand-response program, according to commissioner Rachelle Chong. She said that the utility, along with the California Energy Commission, found a problem in the amount a company \u201cwould\u2019ve used\u201d whether or not a demand-response dispatch was made. The decision allows PG&E to \u201ctest a temperature-sensitive\u201d baseline method with 13 (n)MW, according to Chong. The test is set for August and September. Demand-response programs give customers a lower price if they agree to ratchet down their electricity use when supplies get low. It is aimed at industry users, but the state\u2019s biggest demand-response customer is the Department of Water Resources, which curtails its energy use at its massive water pumping facilities. In other commission news, while utilities want to increase energy bills to cover higher natural gas prices, the Division of Ratepayer Advocates asked regulators to decrease planned gas rates from Southwest Gas. The utility seeks a 12.9 percent rate increase in Southern California and a 52.2 percent increase in the South Lake Tahoe area, according to the division. It also proposes a decrease of 0.7 percent in Northern California. All would be effective January 2009 in the company\u2019s general rate case, according to the commission. In another effort to tamp down rates, DRA recommends a $4.7 million reduction in the utility\u2019s cost of capital.