IDSM in California – Proposed Decision Recommends Limited Demand Response and Energy Efficiency Integration through 2025

California PUC

The California PUC has just issued a proposed decision (PD) that will approve the energy efficiency (EE) business plans of eight program administrators (PAs) for EE programs in California. They include the four investor-owned utilities: Pacific Gas and Electric Company, San Diego Gas & Electric Company, Southern California Gas Company, and Southern California Edison Company. The funding will also be allocated to three regional energy networks (RENs): BayREN, SoCalREN, and Tri-County REN, and one community choice aggregator: Marin Clean Energy (MCE). The business plans, sector strategies, and associated approved budgets will run between 2018 and 2025.

While this PD addresses a significant number of policy and fiscal issues concerning California’s EE programs, there is a minor but significant component of integrated demand side management (IDSM) policy that has been included. Of specific interest to PLMA members is that PD requires the utility PAs to undertake certain limited integration activities to realize ancillary demand response (DR) benefits when funding the third party EE projects. This IDSM concept has been addressed in previous EE proceedings and pilots funded since 2010, but now has resurfaced in this proceeding with a specific deliverable through a CPUC proposal for driving additional DR benefits in the EE business plans.

The PD approves the Energy Division staff proposal to fund a limited integration of DR and EE in three areas: 1) residential HVAC controls; 2) non-residential HVAC and lighting controls; and 3) integration of the DR and EE potential studies to support analysis under the integrated resource planning (IRP) process. The purpose of the staff proposal was both to take advantage of opportunities for adding DR functionality for very little incremental cost, when an EE investment is already incurred, and also to assist customers in preparing for the rollout of time of use (TOU) and other time-varying electric rates happening over the next several years. The PD recommends using DR funding to implement the proposal as well as several general requirements and policy principles that address metrics, processes, budgets, evaluation, and co-valuation of integrating both EE and DR activities.

The full decision is available at