California regulators get another year to consider demand response issues

Dive Brief:

The California Public Utilities Commission has extended the 2018-2022 demand response programs application proceeding after determining that an evaluation of the demand response auction mechanism (DRAM) pilot requires more time.
In 2015, regulators launched the DRAM pilot to begin testing utilities' ability to procure aggregated demand response for resource adequacy. But in a recent ruling, Commissioner Martha Guzman Aceves concluded preliminary results from a review of the pilot show the issues are "too complex" to be tackled in an informal review process.
The ruling extends the deadline of the proceeding by a year, until July 17, 2019, and expands the scope in order to "determine the next steps for the demand response auction mechanism."

Dive Insight:

California has been operating the DRAM program in pilot phase for a few years now, but it is not a permanent program yet. California held its third DRAM auction in 2017, and utilities acquired 200 MW of resources. In October, the PUC directed utilities to hold another auction this year for demand response resources to be delivered in 2019.

Regulators were supposed to finish up consideration of utility programs by July 17 in the formal open proceeding, but have now given themselves another year to fully consider an examination of the first years' results.

The PUC's Energy Division has completed an evaluation of the DRAM pilot, and according to Guzman Aceves' ruling, the preliminary finding "indicates issues that are too complex to be addressed in the informal resolution process." The ruling also warns that the findings of the evaluation report "may raise matters related to the next steps of the pilot, which may include demand response budgetary implications."

Guzman Aceves also warned that the PUC needs more time to "complete unresolved issues" in the proceeding, including providing guidance for pilots to promote demand response in disadvantaged communities and transmission constrained local capacity areas. The commission faced a time crunch last year to develop program budgets, which resulted in "insufficient time to develop a complete record to address several demand response policy matters," wrote Guzman Aceves.

A conference hearing is slated for June 12 at PUC headquarters in San Francisco.