Demand-Response Programs Tweaked to Fit Rest of Summer

By Published On: August 25, 2006

The California Public Utilities Commission approved three measures aimed at coaxing more negawatts out of demand-response programs in the short term on August 24. In an unusual move, the CPUC’s own Energy Division initiated a plan to change a program’s trigger to increase customer demand-response participation. Division chief Sean Gallagher said the old trigger – when prices hit $80/MWh – was occurring more often, resulting in less participation in the program because customers were called on to cut their energy use more frequently. The new trigger is based on the heat rate of a relatively inefficient peaking plant. In that way, instead of firing up the plant to deliver supplies, customers can reduce consumption and get paid a premium. The largest and most responsive customer in the program is the State Water Project. Its pumping stations are responsible for more than two-thirds of the negawatts in the Demand Reserves Partnership. Two more approved plans came from utility requests. San Diego Gas & Electric was allowed to modify its 20/20 program to something akin to a 10/10 or a 15/15 program. Because small customers find it difficult to qualify for a 20 percent credit by conserving 20 percent of their monthly energy compared to the same time last year, SDG&E will offer credits commensurate with lower levels of conservation. Pacific Gas & Electric was authorized to reopen its interruptible program for the remainder of the summer. The program – for customers with demands over 500 kW – pays those who are willing to reduce use to a contractually set level. They have 30 minutes to respond after being notified by the utility. If they do not, they pay a penalty. The commission notes that there are 95 accounts in that program that could provide 300 MW of demand response. The commission rejected a PG&E plan to pay 10 percent bonuses to customers with large loads – over 200 kW – to reduce demand in the utility’s demand bidding program when the price of power is less than $250/MWh. The commission found that PG&E’s proposal is “unlikely to be effective in delivering more demand response MWs this summer.”

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