Advanced Strategies for Demand Flexibility Management and Customer DER Compensation

July 21, 2022: Workshop on Advanced Demand Flexibility Management and DER Compensation

Energy Division hosted a workshop on July 21, 2022, (see details, recording, and slide deck below) to present and discuss its white paper “Advanced Strategies for Demand Flexibility Management and Customer DER Compensation”. The paper (released on June 22; see below to download the paper) describes a staff proposal to enable widespread adoption of demand flexibility solutions and fair compensation for DER (distributed energy resources) services.

This workshop is not associated with any CPUC proceeding. It was hosted by the Energy Division Staff to educate stakeholders about the demand flexibility white paper/proposal and seek feedback.

For questions on the workshop logistics, please contact Whitney Richardson at whitney.richardson@cpuc.ca.gov or Andrew Magie andrew.magie@cpuc.ca.gov. For questions about the white paper, please contact Achintya Madduri (Retail Rates section) at achintya.madduri@cpuc.ca.gov and Jean Lamming (Demand Response section) at jean.lamming@cpuc.ca.gov.

Workshop on Advanced Demand Flexibility Management and DER Compensation Recording

 The recording is available on the Commission's YouTube page here: https://www.youtube.com/watch?v=kvV_dn_3gFI

Agenda:

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June 22, 2022: Energy Division White Paper and Staff Proposal on “Advanced Demand Flexibility Management and Customer DER Compensation” (download)

Energy Division released today its white paper “Advanced Strategies for Demand Flexibility Management and Customer DER Compensation.” It describes a staff proposal to enable widespread adoption of demand flexibility solutions and fair compensation for DER value. The initial concepts for this proposal were previewed by staff at a workshop hosted on May 25, 2021 (see workshop materials on this page down below).

The white paper addresses increasing challenges faced by California’s electricity grid as the state pursues 100% renewable resources, electrification of the building and transportation sectors, and deployment of behind-the-meter distributed energy resources (DERs). At the same time, the paper discusses the issues associated with scaling current strategies for demand response (supply-side or load-modifying) and advanced rate design to levels necessary to address the above challenges. The paper proceeds to describe a fresh approach to scaling demand flexibility in the form of a six-point policy roadmap that encompasses:

• Statewide standardized price presentation to customers, devices, and third-party service providers,
• Comprehensive retail rate reforms linked to real time grid conditions and economics, and,
• Customer options to manage and plan their energy usage.

The white paper recommends that the CPUC open a rulemaking to consider the staff proposal, consistent with the objectives associated with Track 1 of the Commission’s DER Action Plan 2.0 on load flexibility and rates.

The paper reflects a culmination of staff exploration, research, and outreach over multiple years. It also builds off the two dynamic rate pilots authorized in D.21-12-015: one involving a collaboration between PG&E and Valley Clean Energy focused on agricultural pumping; the other being conducted by Southern California Edison (SCE) open to multiple end-uses.

The Energy Division plans to host a workshop on July 21, 2022 [revised date] (details to be announced later) as a starting point for more active engagement seeking stakeholder input on and discussion of the staff proposal.

Please direct questions about the paper to Achintya Madduri (Retail Rates section) at achintya.madduri@cpuc.ca.gov and Jean Lamming (Demand Response section) at jean.lamming@cpuc.ca.gov.

 June 11, 2021: Post-Workshop Feedback

Presentations and recording from this workshop hosted on May 25, 2021 (see description below) are now posted (please see links in the Agenda below).

Energy Division (ED) invited stakeholders to submit informal written comments to the public service list associated with R.12-06-013, which can be found in the CPUC’s online docket. ED received comments from 18 parties which can be found below.

All stakeholder feedback will be reviewed and considered by ED Staff in informing the development of a written white paper based on the staff proposal previewed at the workshop.  The paper is expected to be released at a later date (TBD) during the summer. As noted during the workshop, Energy Division expects to recommend that the CPUC open a rulemaking to consider the Staff proposal described in the whitepaper.

Informal Comments

• 350 Bay Area
• California Efficiency + Demand Management Council
• California Energy Storage Alliance
• California Independent System Operator Corporation
• California Large Energy Consumers Association
• Clean Coalition
• Google LLC & OhmConnect, Inc.
• Joint Distributed Energy Resources Parties (Enel X, CESA, CSSA, Sunrun, Vote Solar, Tesla, EDF Renewables, Nuvve Holding, and Stem)
• Pacific Gas & Electric Company
• Public Advocates Office, California Public Utilities Commission
• Recurve
• Sacramento Municipal Utility District
• San Diego Airport Parking Company
• San Diego Gas & Electric Company
• Southern California Edison
• Southern California Gas Company
• TeMix Inc.
• Utility Consumers’ Action Network

May 25, 2021: Workshop

Energy Division (ED) Staff hosted a virtual exploratory workshop on May 25, 2021 to discuss ideas for advanced distributed energy resources (DER) and flexible load management, leveraging new system-wide retail rate reforms, and load modifying demand response proposals. 

With increasing penetration of renewables, grid conditions are evolving rapidly. At the same time, the state's aggressive clean energy goals are driving rapid growth in customer DER adoption, long-term building decarbonization, and transportation electrification. The CPUC's Integrated Resource Planning (IRP) scenario analyses indicate that customer demand flexibility can be a cost-effective alternative for renewables integration and emissions reduction.  

At this workshop, ED Demand Response and Retail Rates Staff jointly previewed a proposal for a comprehensive roadmap to facilitate widespread flexible demand management while minimizing the cost of service that addresses: 

1. Communication of rates to customers and third-party service providers, while accommodating rate designs from utilities & CCAs.
2. Opt-in dynamic rate based on real-time, locational marginal cost of electricity.
3. Rate reforms (opt-in) related to generation and distribution capacity cost recovery and compensation for DER exports.
4. Options for customers to manage & optimize energy consumption and bills, such as subscription and transactive features.

ED invites interested stakeholders to engage with these presenters and provide constructive feedback. Some CPUC Commissioners and or their advisors are expected to attend.

For questions, please contact Andrew.Magie@cpuc.ca.gov

The recording of the workshop can be found at this link: https://cpuc.webex.com/recordingservice/sites/cpuc/recording/3870707e9fa11039af7f005056812a0a/playback
Password: XkaDJrp3

Workshop Agenda

*Times in Pacific Daylight (Los Angeles, California)
ED = Energy Division
CPUC = California Public Utilities Commission
CEC = California Energy Commission
CAISO = California Independent System Operator
CUB = Citizen Utility Board (Illinois)