- California regulators last week directed the state's three large investor-owned utilities to hold an auction next year for demand response resources to be delivered in 2019, continuing the state's use of demand management to balance the grid.
- The decision requires Southern California Edison and Pacific Gas and Electric to procure $6 million of demand response, while San Diego Gas & Electric will obtain $1.5 million, according to the order.
- In its third third Demand Response Auction Mechanism (DRAM) auction earlier this year, utilities acquired 200 MW of resources. The Advanced Energy Management Alliance hailed the decision, which was made over concerns that insufficient funds had been allocated to the auction. AEMA said absent the CPUC's decision, "it was unclear what the future would hold for demand response."
California's DRAM mechanism has acquired increasing amounts of demand response in each successive auction, but providers had expressed concern that the level of funding available for two-tear delivery periods was inadequate to encourage growth.
Combined, Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison acquired 40 MW of DR in the first auction, 80 MW in the second and 200 MW in the third.
Katherine Hamilton, executive director of the Advanced Energy Management Alliance, issued a statement hailing the decision to continue the auctions. “This decision shows a continued commitment to growth of clean and reliable resources like demand response, in California," Hamilton said. "Absent this decision, it was unclear what the future would hold for demand response and DRAM.”
Over the summer, the California ISO approved efforts to enhance the ability of demand response to participate in the wholesale power markets, as part of the state's efforts to allow greater market participation for a wider range of resources.
New ISO rules will give providers three new ways to evaluate demand response performance that will better reflect different types of demand response and their configurations. The new rules resulted from a stakeholder process focused on demand response and energy storage.