2022 was a successful year for the California Efficiency + Demand Management Council! We continued to deliver and build upon our Strategic Plan, advance the organization’s mission, educate and be informed by our Members, and advocate for our Members’ business and policy interests. The Council’s legislative successes were significant: groundbreaking policy wins and $3.1 Billion in potential funding. These legislative and budgetary wins remain a priority as the Legislature enters its 2023 session and may advance, reduce, or sideline yet-to-be-allocated funding.

This document serves as a review of the Council’s collective policy (and sometimes policy-adjacent) work across 2022, spotlighting noteworthy successes and challenges specific to and beyond the year.

• Filings: 57
  • CPUC: 41
  • CEC: 7
  • CAISO: 8

  Legislative:

  • 75 bills closely tracked over the two year session where 4,476 bills were introduced
  • 15 letters submitted to the Legislature and Governor’s Office during Session
  • 8 individual testimonies on 4 different bills provided at bill sponsors’ requests
  • 20 Member meetings re: the Legislature during Session, providing up-to-the minute information and opportunities to discuss and guide Council efforts

  Federal Testimonies and Letters: 4

  “Other” Testimonies and Letters: 7

Among the Council’s many legislative and budgetary successes over the 2022 legislative session, it is worth highlighting Council staff’s eight testimonies on four separate bills in front of various legislative committees. Each of the Council’s testimonies were provided at the explicit request of each respective bill’s author. These testimonies represent a growing strength and influence of the Council at the Legislature.

The remainder of this section is pulled from the Council’s 2022 Legislative Recap. You can find that full document here.

The Council’s accomplishments through direct engagement with Legislators, Agency leaders, and staff over the 2022 Legislative Session include, but are not limited to:

• Securing the expansion of statewide access and customer eligibility to $200 Million through the Demand Side Grid Support Program by leading a Coalition (AB 205, Ting/Ctte and AB 209, Ting/Ctte)
• Establishing the requirement for California to adopt and update a load shifting goal to reduce net peak electrical demand – the U.S.’s first – by crafting and advocating for the proposal (SB 846, Dodd)
• Securing the expansion and extension of the TECH Program by $145 Million for electrification through deploying heat pump technology by partnering with key stakeholders (AB 179, Ting)
• Testifying and lobbying in support of legislation that improves transparency and accuracy to account for the grid’s energy sources and emissions on an hourly basis (SB 1158, Becker)
• Advocating for (ultimately) $1 Billion re: the benefits of demand side resources and opportunities major investments could provide (SB 846, Dodd). The Council will work to guide investment opportunities
• Advocating for (ultimately) $922 Million for equitable building decarbonization programs implemented through the CEC, largely incentivizing efficient electric appliances (AB 209, Ting/Ctte and AB 179, Ting)
• Advocating for (ultimately) $100 Million for a new Industrial Grid Support and Decarbonization Program targeting grid and climate benefits at the industrial level (AB 209, Ting/Ctte)
• Advocating for improved meter data access to effectively and timely run programs, resulting in $5 Million for operationalizing customer meter data to support reliability and decarbonization efforts (AB 179, Ting)

Solicitations:

Stemming from the Council’s monthly meetings with Energy Division staff, the Council and Members were invited to serve as a panel at the July 11 Energy Efficiency Third-Party Solicitations Semi Annual Stakeholder Forum. Greg Wikler led a panel of three participants: Joanne O’Neill, Ying Wang, and Dan Stay to discuss challenges and opportunities re: solicitation timing improvements, bidder feedback processes, IOU contracting reforms, and DBE opportunities. The opportunity to serve as a panel at this venue represents a first for the Council and our Members.

Soon after the Forum, the CPUC solicited feedback on an extensive series of questions on directly relevant topics. The Council provided comments in response. Later in December, the CPUC issued a proposed decision that largely parallels the Council’s positions put forth in our comments and the Forum panel. The proposed decision represents (potential) wins on several key issues. However, there are a few matters that remain unresolved and the Council will continue working to address those while securing potential wins. Those key issues in the proposed decision include:

• Removing requirements for performance assurances as a starting point for contract negotiation;
• Requiring cybersecurity insurance only when deemed necessary;
• Removing the requirement for a two-stage solicitation process;
• Updating the definition of diverse business enterprise to include businesses owned by persons with disabilities;
• Updating terms and conditions to reflect the Total System Benefit metric;
• Clarifying financial conflict of interest rules for procurement review group members;
• Requiring a consistent methodology to account for administrative costs associated with third-party contracts;
• Allowing the use of strategic energy management approaches beyond the industrial sector; and
• Adopting data sharing requirements for Commission authorized energy efficiency programs

Evidentiary Hearing

In late summer 2022, the Council collaborated with CPower to address significant concerns with the CPUC and Southern California Edison (SCE’s) late-filed and unanticipated movement of a report into evidence. The primary concern regarded the impacts of SCE’s filing the report: it changed the position of the joint parties on whether or not to pursue an evidentiary hearing. The Council and CPower jointly moved for expedited clarification of the ALJ’s email ruling on the issue, and ultimately, the report was removed as evidence, signaling a significant win for the Council and CPower in their collaborative efforts to uphold procedure and process.

Evaluation, Measurement, & Verification

The Council built on a good relationship with EM&V related CPUC staff. 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 looks forward to greater and ongoing collaboration with the CPUC on these issues.

Avoided Cost Calculator

In late summer, the CPUC adopted Resolution E-5228 updating the Avoided Cost Calculator (ACC) process and calculation. Most of the updates were supported by the Council and proved to be generally beneficial. Some key updates include:

Process:

• Eliminates minor updates in odd-numbered years.
• Requires biennial major update to allow for more opportunity for comment (informally). The process must begin in July.
• Must provide at least 6 weeks for review before ACC is adopted/updated.

Calculation:

• Adopts the practice of using the ACC to determine the increased supply costs of fuel substitution.
• Adds an additional avoided cost – the Avoided Gas Infrastructure Cost (AGIC), to be on a separate ACC spreadsheet tab and not included in the hourly marginal costs. The AGIC includes three categories of costs: i) mainline extensions; ii) service extension; and iii) meter.
• Adopts an interim natural gas-specific greenhouse gas adder, based on building electrification costs, using data contained in the California Energy Commission’s analysis on gas sector decarbonization to develop the value for the adder. The value will be reviewed in this Resolution. 

Demand Flexibility Through Electric Rates (R.22-07-005)

The Council advocated for a streamlined and efficient process between proposed rulemaking tracks A (re: income-graduated fixed charge, etc.) and B (re: electric rate design principles and demand flexibility rate design principles) during our pre-hearing conference and post-prehearing conference. The CPUC’s schedule, as proposed in their OIR reflected the Council’s (and others’) guidance into account over the advocacy of the IOUs, laying forward a parallel process between both tracks. The Council continues to engage on this issue, including through comments and recently established Working Groups.

Demand Response Auction Mechanism (DRAM)

Under A.22-05-002 et. al., the CPUC has issued a proposed decision to extend the DRAM pilot for another year. The Council submitted joint comments alongside CPower, Leapfrog Power, and Voltus supporting the proposed decision.

Relationships

The Council’s ongoing and growing relationship with Vice Chair Gunda and his staff as well as with Commissioner McAllister continued to improve. The Council has had several and consistent contacts with the Vice Chair and his staff. The Council’s relationship with Commissioner McAllister has also grown. The Commissioner was one of the key speakers in our first Session during our Fall Conference.

Clean Energy Reliability Investment Plan

In late summer, the Vice Chair and his staff met with Council staff to address a wide range of issues. That meeting ultimately resulted in the Vice Chair and staff requesting direct guidance from the Council in recommending most beneficial and cost-effective investments of potential funds stemming from the Clean Energy Reliability Investment Plan (“CERIP”) as referenced in our legislative successes section above. The Council responded with an initial “Roadmap” document. Eventually, the Council submitted a response to the CERIP RFI through the formal docket process. The CEC has yet to issue a proposal in response to feedback received from the public.

Supply Side DR QC Methodology

In the CEC’s Supply Side DR Qualifying Capacity Methodology working group, the Council co-sponsored a DR counting methodology proposal alongside Leapfrog Power. Following substantive stakeholder discussions and negotiations, the CEC adopted key components of our proposal in their staff’s recommended proposal.

Relationships

Consistent quarterly Council meetings with CAISO leadership, often including CEO Elliott Mainzer and Vice President of Market Policy & Performance Anna McKenna continued across 2022. This included an in-person meeting between the Council and CAISO leadership in Folsom over the summer and a remote meeting in December with Council-CAISO-Members. These meetings result in information and idea exchanges towards Council-identified policy challenges and Member exposure to CAISO leadership. Anna McKenna also was a key speaker in the Council’s first Session during our Fall Conference.

Challenges regarding timely and transparent access to meter data challenges have been identified as a key priority issue for the Council heading into 2023. The Council has often raised this concern with CAISO leadership. CAISO has expressed similar concerns, in particular the impacts that limited access to energy consumption data has on forecasting and analyzing DER grid benefits during emergencies. CAISO continues to elevate data access concerns to the CEC and CPUC in appropriate regulatory channels.

Proposed Revision Request 1444

The Council successfully appealed the Proposed Revision Request (“PRR”) 1444 alongside CPower, Leapfrog, OhmConnect, Olivine, and Voltus. PRR 1444 would have applied a more rigorous penalty for DR provider failure to deliver certain data used by the CAISO to monitor the grid. The CAISO has withdrawn the PRR at this time.

State / Legislative

The Council continues to expand and leverage strategic coalitions among impactful stakeholders. Beyond the collaborative work outlined in this document thus far, the Council rallied coalitions around securing additive funding for the TECH initiative and advancing (or killing) several bills, including SB 1261, AB 2667, and SB 1136.

Federal / Interstate

The Council continues its efforts to collect information and data and successfully guide implementation of the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act. The Council consistently engages with Regional Energy Efficiency Organizations (REEOs) and a group of sister organizations particularly focused on shaping key federal issues.

In addition to the issues outlined above, the Council continues to engage with utility counter-parts. Over the summer, Joe and Clark visited Los Angeles and spent a day exploring innovative load shifting projects with SCE and natural gas efficiency measures with Southern California Gas (SoCalGas). Joe and Clark also intended to meet with counterparts from the Los Angeles Department of Water and Power, but due to unforeseen circumstances, were unable to do so.

It is worth noting there has been significant presence by Pacific Gas & Electric, SCE, SoCalGas, and many of the CCAs and RENs across the Council’s various conferences and events.