One-Year Extension: Demand Response Auction Mechanism (“DRAM”)
At the beginning of the year, the Council submitted joint comments, testimony and briefs advocating for the appropriate expansion of DRAM. The Council and other DR parties argued in testimony and briefs that sufficient improvement in DRAM Pilot performance warranted the one-year extension. In addition, through joint comments and lobbying on the proposed decision, the Council convinced the CPUC to remove language that would have required DRAM Pilot proponents to retrospectively demonstrate the cost effectiveness and reliability of the DRAM Pilot for the CPUC to adopt it permanently.
In response to the Council’s joint comments and lobbying, the proposed decision was revised in D.23-01-006 to clarify that the future of the DRAM will depend on how it has met the six criteria for success that had been adopted in D.16-09-056.
Early in 2023, the Council coordinated efforts amongst its Members to communicate directly with CPUC staff and submit formal comments on third party EE solicitations process improvements. These efforts eventually led to D.23-02-002 where a significant number of the Council’s recommendations were incorporated into the final decision, including:
- Removing the requirement for a two-stage solicitation process;
- Updating the definition of diverse business enterprise to include businesses owned by persons with disabilities;
- Clarifying financial conflict of interest rules for procurement review group members;
- Ensuring market access program/approach proceed without interruption;
- Allowing the use of strategic energy management approaches beyond the industrial sector;
- Removing requirements for performance assurances as a starting point for contract negotiation;
- Requiring cybersecurity insurance only when deemed necessary;
- Better reflecting and capturing stakeholder comment and analysis in the final annual development report;
- Shifting CATALENA responsibilities over to the CEC;
- Requiring a consistent methodology to account for administrative costs associated with third-party contracts;
- Improving and clarifying governance and oversight of the Commission’s database tools; and
- Adopting data sharing requirements for Commission-authorized energy efficiency programs.
Following the final decision and stemming from the Council’s monthly meetings with Energy Division staff, the Council and Members were again invited to serve as a panel at the March EE Third-Party Solicitations Semi Annual Stakeholder Forum. Director of Policy + Strategy, Clark McIsaac, led a panel of three participants: Kim Rodriguez, Jim Dodenhoff, and Ying Wang to discuss the value of individual feedback for unsuccessful bids, opportunities for continued improvement on supplier diversity goals, and ongoing challenges with performance assurances.
EE Business Plans + Portfolios
Following the IOUs’ submission of their application for approval of their 2024-2031 energy efficiency business plans and 2024-2027 portfolio plans in 2022, the CPUC finalized D.23-06-055 and D.23-08-005 (regarding EE Goals). In the CPUC’s efforts to finalize D.23-06-055, the Council diligently coordinated with Members and stakeholders to advocate for necessary, significant improvements. In response to the Council’s advocacy efforts, the Final Decision included the following Council-recommendations:
- General expansion of NMEC (but not applying as a blanket or default requirement);
- General expansion and improvement towards greater energy equity, including:
- Struck limiting language regarding equity segment specific programs and included non-equity segment programs into the non-energy benefits (“NEB”) study;
- General expansion of the market access approach;
- Enable investments in integrated demand-side management (“IDSM”) through PA EE budgets;
- Elimination of blanket program consolidations, including:
- Struck the proposal to consolidate the Residential Behavioral Home Energy Reports (“HERS”) program to a statewide administration,
- Struck the proposal to consolidate the Residential Audit Programs (or Universal Audit Tool) (“UAT”) program to a statewide administration,
- Struck the proposed study on the potential for the Residential Multi-Family and Strategic Energy Management programs to transition to a statewide administration, and
- Struck the proposed statewide program precedence over non-statewide programs when there is “overlap.” The Final Decision laid out a pathway for PAs to leverage existing mechanisms while continuing the discussion to ensure program gaming is mitigated;
- Struck the creation of the Portfolio Oversight Group – as proposed it could have been a complex and unnecessary process with unclear benefits; and
- Noting the Custom Proposal should be further discussed among stakeholders – though our proposal was not accepted.
Bid cap on Proxy Demand Resources (“PDR”)
The Energy Division had proposed a PDR bid cap of $500/MWh to qualify as a Resource Adequacy (“RA”) resource; the Council and participating Members argued against PDR bid caps, but if one was to ultimately be adopted, it should be set at $949/MWh. The Council’s proposed cap is immediately below the Reliability Demand Response Resources (“RDRRs”) bid floor of $950/MWh to ensure all PDRs are dispatched prior to RDRRs. The CPUC adopted a $949/MWh bid cap in D.23-06-029.
Evaluation, Measurement, & Verification (“EM&V”)
CPUC staff participated in a Council EM&V Quarterly meeting to solicit input and guidance from Council Members regarding how to better format and manage the CPUC’s Winter Quarterly Stakeholder meeting. Through extended collaboration, CPUC staff incorporated much of the Council and Members’ input to improve what and how information was shared during the EM&V Quarterly Stakeholder meeting, including a deeper dive on key utility reports (compared to previous brief “fly-bys” providing no substance on key reports) and greater opportunities for stakeholder Q&A.
The Council continues to work with CPUC staff effectively on EM&V-related issues regularly.