Report: DER providers question California DRAM second auction

Dive Brief:

  • California's second Demand Response Auction Mechanism (DRAM) has drawn scrutiny from third party providers who argue the state's largest utilities could have procured more resources beyond the minimum targets set this year, Greentech Media reports. 
  • Combined, the largest investor-owned utilities acquired about 80 MW in the most recent auction compared with 40 MW last year.
  • California's DRAM mechanism aims to allow a wide range of resources, from customer battery storage to electric vehicles, to bid into wholesale markets for demand management. The auction gives distributed resources sized 100-kW and larger access to the state's electricity markets. 

Dive Insight:

California's first DRAM auction last year was a huge success, ultimately netting more than 40 MW compared to the required minimum of 22 MW. But Greentech Media reports a second auction may have netted fewer megawatts than it could have, leading to questions from distributed resource providers.

The utilities acquired roughly 81 MW, with SCE netting 56 MW, PG&E clearing 21.4 MW and SDG&E netting 4 MW. PG&E originally targeted 10 MW for this round, with SDG&E and SCE aiming for 2 MW and 10 MW respectively. Greentech reports the total procurement now stands at roughly 120 MW.

A group including Comverge, CPower, EnerNOC and EnergyHub, have told state regulators that PG&E and SCE examined less than half the bids required, saying utilities should have aimed higher in procuring more resources. 

“The Commission has stated that the minimums are just that—a floor, not a ceiling,” the group wrote, according to GTM. 

CAISO’s third round of DRAM acquisitions will "double the funding of the recently held 2017 round,” Elta Kolo, grid edge analyst for GTM Research Grid Edge, told Utility Dive.

According to the groups petitioning CPUC, redacted filings from the IOUs make it difficult to assess what portion of their DRAM budgets were spent. The utility filings do "not clearly demonstrate if the 2017 DRAM Pilot solicitations produced the expected results," they told regulators.

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Filed Under: Distributed Energy
Top image credit: California ISO