Request for Approval of Tariff Language to Implement the Policy on the Use of Prohibited Resources for Demand Response Approved in Decision

Transcription

1 Erik Jacobson Director Regulatory Relations Pacific Gas and Electric Company 77 Beale St., Mail Code B10C P.O. Box San Francisco, CA Fax: January 3, 2017 Advice 4991-E (Pacific Gas and Electric Company ID U 39 E) Public Utilities Commission of the State of California Subject: Request for Approval of Tariff Language to Implement the Policy on the Use of Prohibited Resources for Demand Response Approved in Decision Purpose In this advice letter, Pacific Gas & Electric Company (PG&E) requests California Public Utilities Commission (Commission or CPUC) approval of language for later insertion into rate schedules E-BIP and E-CBP to enable PG&E to implement the Commission s policy on the use of specified prohibited resources to provide demand response (DR). In addition, PG&E provides a budget for the costs needed to implement the prohibition, but no fund-shifting authority is requested. As discussed below, PG&E will incorporate the approved language into rate schedules E-BIP and E-CBP upon Commission approval of the investor-owned utilities (IOUs ) July 1, 2017 Tier 3 advice letter requesting approval of a final audit verification plan for prohibited resources. Background On October 5, 2016, the Commission issued Decision (D.) (Decision). In the Decision, the Commission formally adopted a prohibition on using specific behind-themeter technologies to provide DR, effective January 1, In so doing, it revised Ordering Paragraph (OP) 11 and deleted OPs of D , which had directed the IOUs to require non-residential DR participants to self-certify whether they own or operate a fossil-fueled backup generator (BUG), and to provide data on the model of BUGs owned by these customers. 2,3 In addition, D directed the IOUs to collect the BUGs usage data of these customers and determine the extent to which they were used during DR events. 1 Decision , Ordering Paragraph 3. 2 Id, Ordering Paragraph 1. 3 Id, Ordering Paragraph 2.

2 Advice 4991-E January 3, 2017 The Decision directed the IOUs to submit a Tier 3 advice letter proposing draft language for the new prohibition tariff provision for review and approval by the Commission, and proposing any fund-shifting within the 2017 DR budget to cover the costs of implementing the prohibition. 4 For non-residential DR programs, customers will be required to commit to not using a prohibited resource during a DR event or, for those customers that must run a prohibited resource during DR events, they may instead take a default adjustment. Residential customers are subject to the prohibition but are not required to provide an attestation or default adjustment. The Decision exempted the following PG&E DR programs from the prohibition: Residential and Non-Residential SmartAC TM, Optional Binding Mandatory Curtailment (OBMC), Scheduled Load Reduction Program (SLRP), Permanent Load Shift (PLS), Peak Day Pricing (PDP), SmartRate TM, and time-of-use (TOU) rates. 5 Therefore, only PG&E s Capacity Bidding Program (CBP), Base Interruptible Program (BIP), the Demand Response Auction Mechanism (DRAM) pilot, Supply Side II Pilot (SSP II), and Excess Supply Pilot (XSP) are subject to the prohibition (Eligible Programs). The Decision also stated that third-party DR providers shall enforce the prohibition for their own programs but that they must be able to demonstrate compliance to the IOUs. 6,7 Given this guidance, PG&E is responsible for directly implementing the prohibition for directly-enrolled customers in its BIP, SSP II, and XSP. It will be the responsibility of the third-party BIP and CBP aggregators to implement the prohibition for their customers and provide PG&E with the necessary information to enforce the prohibition (e.g., provide the default adjustment amount taken by customers in the aggregator s portfolio such that PG&E is able to adjust the capacity payments accordingly), and the responsibility of third-party DR providers to implement the prohibition for their customers participating in the DRAM pilot and any future DRAM program that may be established. PG&E s SSP II and XSP have no associated tariff but PG&E will add the language pertaining to the prohibition to the SSP II and XSP participant agreements. PG&E and the other IOUs will separately request revisions to the sections of the DRAM pilot purchase agreement that refer to the prohibition to be consistent with the Decision, as part of the supplemental advice letter for the DRAM pilot that is currently required by draft Resolution E The Decision also directed the IOUs to develop an audit verification mechanism by jointly retaining a consultant to assess whether it is possible, and if so by what methods and data sources, to evaluate whether non-residential customers are complying with the demand response prohibition requirement. 8 The joint IOUs consultant report must be 4 Id, Ordering Paragraph 4.c. 5 Id, Ordering Paragraph 3. 6 Id, Ordering Paragraph 3. 7 Id, p Id, Ordering Paragraph 5.

3 Advice 4991-E January 3, 2017 served on the service list no later than April 1, The IOUs are then required to host a workshop for the consultant to explain its report. By July 1, 2017, the IOUs are required to file a Tier 3 advice letter requesting approval of a final proposed audit verification plan, incorporating feedback from the workshop. Once the audit verification plan is approved, PG&E will submit an advice letter containing revisions to the E-CBP and E-BIP tariffs that incorporates the language approved by the Commission in this advice letter and that reflects the approved audit verification plan. The advice letter will also include the revised BIP and CBP Add or Delete form used for enrollment. The IOUs may revise the DRAM pilot purchase agreement accordingly as well. Discussion The audit verification mechanism that is ultimately approved by the Commission will comprise a significant share of how PG&E implements the prohibition. However, because the verification process has not yet been determined, PG&E discusses the other aspects of the implementation process. Attestation Process: As discussed above, the Decision requires all existing and new non-residential participants of Eligible Programs to attest that they will not use a prohibited resource to reduce load during a DR event. Those DR participants that must operate a prohibited resource to support certain processes for safety or operational reasons must agree to a default adjustment in which the amount of DR each participant can provide is reduced by the nameplate capacity of the Prohibited Resource. Pursuant to the Commission requirement that DR providers and aggregators be required to demonstrate compliance with the prohibition 9, they must provide copies of their existing customer attestations and default adjustments to PG&E for DRAM and CBP by December 31, For the BIP, customer attestations and default adjustments must be submitted between November 1 and December 1, 2017, which is consistent with the annual open enrollment period. Going forward, these will be required at the time of customer enrollment and re-enrollment in the BIP or CBP. Pursuant to OP 4.b of the Decision, participants will select the attestation or default adjustment electronically as part of the enrollment process. CBP customers may update their initial selection (attestation or default adjustment), or default adjustment amount on a monthly basis as part of their aggregator monthly nomination. Directenrolled and aggregated BIP customers may update their attestation/default adjustment selection during the November open enrollment period each year between November 1 and December 1. Changes will be effective the following year. In all instances, PG&E must be notified of the change in a customer s status. Should PG&E have an eligible direct-enrolled residential program in the future, the prohibition will be explained in the participation agreement. 9 Id, p.40.

4 Advice 4991-E January 3, 2017 Any existing BIP or CBP customers that fail to respond by their respective deadlines will be removed from the program but will be eligible to re-enroll subject to the requirements associated with the prohibition. Any new DR customer that does not complete this component of the enrollment process will not be eligible to participate in the DR program. Any BIP or CBP customer that is found to have violated its attestation or default adjustment will be prohibited from participating in the BIP or CBP for the remainder of the calendar year. Communications Plan: Once revised E-BIP and E-CBP tariffs are approved by the Commission, PG&E will notify direct-enrolled BIP participants, and BIP and CBP aggregators of the revised tariff language. Once the Commission approves the July 1, 2017 advice letter containing the audit verification plan, PG&E will notify direct-enrolled BIP customers, and BIP and CBP aggregators that they must provide an attestation or default adjustment, and any other verification requirement approved by the Commission. Budget and Fund-shifting: In the table below, PG&E provides cost estimates for implementing the prohibition. These funds can be absorbed by PG&E s DR System Support Activities and Marketing, Education, and Outreach budgets, and so PG&E will not require fund-shifting authority. Third-party providers and aggregators will be responsible for bearing their own costs of implementation and enforcement. Estimated cost to implement the BUGS prohibition $ 414,000 BUGS Systems Activities: Capture default adjustment and change calculation for capacity payment for direct-enrolled customers Enhance existing online enrollment tool for new/existing enrollments and capture electronic signature $ 50,000 $ 200,000 Update BIP add forms and capture changes in system $ 124,000 BUGS Customer Communications Activities: Series of communications that include letter, , and telephone support; and notification that includes online portal for attestation Proposed Tariff Language $ 40,000 PG&E proposes to include the following language in the E-BIP and E-CBP rate schedules upon Commission approval. Per Commission direction, PG&E will ensure the language is located near or at the beginning of the rate schedules to the greatest extent possible. PG&E intends to file the actual tariffs with the final changes once the Commission approves the July 1, 2017 advice letter with the audit verification plan.

5 Advice 4991-E January 3, 2017 Rate Schedule E-BIP: USE OF PROHIBITED RESOURCES: Prohibited Resources: Effective on January 1, 2018, the following list of fossil fueled distributed energy technologies are prohibited in providing load reduction during demand response events: Technologies using diesel, natural gas, gasoline, propane, or liquefied petroleum gas, in Combined Heat and Power (CHP) or non-chp configuration ( Prohibited Resources ). Stand-alone storage and storage coupled with renewable generation are allowed to be used during demand response events but must meet the relevant greenhouse gas emissions factor thresholds adopted for the Self Generation Incentive Program. Attestation: All directly enrolled customers are required to attest to never using a Prohibited Resource during a demand response event while enrolled in the BIP program or provide a default adjustment. All new directly enrolled customers must attest or provide a default adjustment at the time of enrollment. All existing directly enrolled customers must provide this information between November 1, 2017 and December 1, DR aggregators are responsible for managing the attestation of customers participating in their portfolios and demonstrating to PG&E how they intend to enforce the prohibition and the attestation. In addition, DR aggregators must provide PG&E with the customer attestations and default adjustments of each customer. Use of the Prohibited Resource(s) for Safety Reasons: (1) Election to Use Prohibited Resource(s): Customers, both directly enrolled or participating in a DR aggregator s portfolio, who must use the Prohibited Resource for safety reasons during a demand response event under this Schedule must affirmatively elect to use the Prohibited Resource(s) for safety reasons. All directly enrolled customers must submit an update electronically through the Demand Response Enrollment Tool prior to December 1, 2017 to make an affirmative election. After January 1, 2018, all such customers must submit an update electronically through the Demand Response Enrollment Tool to affirmatively elect the use of the Prohibited Resource for safety reasons during a demand response event either at the time of enrollment or during the open enrollment period each year between November 1 and December 1, to affirmatively elect this option. Changes will be effective January of the following year. DR aggregators must administer the attestation of the customer participating in the DR aggregator s portfolio. (2) Default Adjustment Value (DAV) for Directly Enrolled Individual Customers: All directly enrolled individual customers making an affirmative election must provide the nameplate capacity value of its Prohibited Resource through the Demand Response Enrollment Tool at the time of making an affirmative

6 Advice 4991-E January 3, 2017 election as discussed above. If a directly enrolled customer is changing its capacity of the Prohibited Resource, the customer must do so through the Demand Response Enrollment Tool during the open enrollment period each year between November 1 and December 1. Changes will be effective January of the following year. (3) Default Adjustment Value (DAV) for DR Aggregator Portfolio: DR aggregators are responsible to collect and provide the Default Adjustment Value for each customer in a DR aggregator s portfolio based on the nameplate capacity value of the Prohibited Resource elected to be used by each customer in the DR aggregator s portfolio using Form by December 1, If a customer enrolled in the aggregation is changing its capacity of the Prohibited Resource, the DR aggregator must submit an updated Form with a revised DAV in an Affirmative Election during the open enrollment period each year between November 1 and December 1. Changes will be effective in January of the following year. (4) If the customer has multiple prohibited resources for the same service account, then the Default Adjustment Value will be the sum of the nameplate capacity value from all prohibited resources on the same site. Enforcement of Prohibition: (1) A participant must either attest or elect a Default Adjustment by December 1, Any participant without a valid attestation or affirmative election may be removed from the BIP program on the customer s next regularly scheduled meter read date. Once removed from the BIP program, if the customer is able to provide PG&E with either a valid attestation or an affirmative election at the time of re-enrollment, the customer may reenroll pending available space under the cap on emergency demand response programs. If no space under the cap is available at the time, the customer may elect to be placed on the waiting list. (2) PG&E may remove a customer from the BIP program if: (a) the customer attested to no use of Prohibited Resource but was verified with incurred usage of Prohibited Resource during a demand response event, or (b) a customer submitted an invalid nameplate capacity value for the Prohibited Resources. Such customers will be removed from the BIP program until the next enrollment period and will also be prohibited from participating in the Capacity Bidding Program for the balance of the calendar year.

7 Advice 4991-E January 3, 2017 Rate Schedule E-CBP USE OF PROHIBITED RESOURCES: Prohibited Resources: Effective on January 1, 2018, the following list of fossil fueled distributed energy technologies are prohibited in providing load reduction during demand response events: Technologies using diesel, natural gas, gasoline, propane, or liquefied petroleum gas, in Combined Heat and Power (CHP) or non- CHP configuration ( Prohibited Resources ). Stand-alone storage and storage coupled with renewable generation are allowed to be used during demand response events but must meet the relevant greenhouse gas emissions factor thresholds adopted for the Self Generation Incentive Program. Attestation: DR aggregators are responsible to manage the attestation with their customers and be able to demonstrate to PG&E how it is tracking and enforcing the attestation. DR aggregators must provide PG&E with the customer attestations and default adjustment. Use of the Prohibited Resource (s) for Safety Reasons: (1) Election to Use Prohibited Resource(s): A customer who must use the Prohibited Resource for safety reasons during a demand response event must affirmatively elect to use the Prohibited Resource(s) for safety reason. DR aggregators are responsible to manage their customer s election and be able to demonstrate to PG&E how it is tracking and enforcing the prohibition. (2) Default Adjustment Value: DR aggregators are responsible to submit to PG&E the Default Adjustment Value based on the nameplate capacity value of the Prohibited Resources elected to be used by the customers at the time of nomination. (3) If the customer has multiple Prohibited Resources for the same service account, then the Default Adjustment Value will be the sum of the nameplate capacity value from all prohibited resources on the same site. Use of the Prohibited Resource(s) for Safety Reasons: (1) Election to Use Prohibited Resource(s): Customers participating in a DR aggregator s portfolio, who must use the Prohibited Resource for safety reason during a demand response event under this Schedule, must affirmatively elect to use the Prohibited Resource(s) for safety reasons. DR aggregators must administer the attestation of the customer participating in the aggregator s portfolio at the time of enrollment or on a monthly basis to affirmatively elect this option.

8 Advice 4991-E January 3, 2017 (2) Default Adjustment Value (DAV) for DR Aggregator Portfolio: DR aggregators are responsible to collect and provide the Default Adjustment Value for each customer in the DR aggregator s portfolio based on the nameplate capacity value of the Prohibited Resource elected to be used by each customer in the DR aggregator s portfolio using Form by December 1, If a customer enrolled in the aggregation is changing its capacity of the Prohibited Resource, the DR aggregator must submit an updated Form with a revised DAV in an Affirmative Election on a monthly basis as part of their aggregator monthly nomination. (3) If the customer has multiple prohibited resources for the same service account, then the Default Adjustment Value will be the sum of the nameplate capacity value from all prohibited resources on the same site. Enforcement of Prohibition: (1) A participant must either attest or elect a Default Adjustment by December 31, Any participant without a valid attestation or affirmative election may be removed from the CBP program the following month. Once removed from the CBP program, if the customer is able to provide PG&E with either a valid attestation or an affirmative election at the time of re-enrollment, the customer may re-enroll. (2) PG&E may remove a customer from the CBP program (a) if the customer attested to no use of Prohibited Resource but was verified with incurred usage of Prohibited Resource during a demand response event, or (b) a customer submitted an invalid nameplate capacity value for the Prohibited Resources. Such customers will be removed from the CBP program for the balance of the calendar year and will also be prohibited from participating in the Base Interruptible Program during this time. ENERGY PAYMENT: (Revisions in bold) The Hourly Energy Payments will be determined as follows: Nominated Energy HR = Nominated Capacity HR Delivered Energy HR = lesser of (Delivered Capacity HR Default Adjustment Value) or 1.5 * Nominated Energy HR If Delivered Energy HR >= Nominated Energy HR Energy Payment HR = Delivered Energy HR * Energy Price HR If Delivered Energy HR < Nominated Energy HR

9 Advice 4991-E January 3, 2017 Protests Energy Payment HR = (Delivered Energy HR ) * Energy Price HR less (Nominated Energy HR - Delivered Energy HR ) * the higher of the ex-post energy price for the event hour or the Energy Price HR Where the Energy Price HR = 15,000 BTU/kWh * PG&E citygate midpoint gas price as published by Platts Gas Daily for the date of the CBP Event ($/BTU) Anyone wishing to protest this filing may do so by letter sent via U.S. mail, facsimile or , no later than January 23, 2017, which is 20 days after the date of this filing. Protests must be submitted to: CPUC Energy Division ED Tariff Unit 505 Van Ness Avenue, 4 th Floor San Francisco, California Facsimile: (415) EDTariffUnit@cpuc.ca.gov Copies of protests also should be mailed to the attention of the Director, Energy Division, Room 4004, at the address shown above. The protest shall also be sent to PG&E either via or U.S. mail (and by facsimile, if possible) at the address shown below on the same date it is mailed or delivered to the Commission: Erik Jacobson Director, Regulatory Relations c/o Megan Lawson Pacific Gas and Electric Company 77 Beale Street, Mail Code B10C P.O. Box San Francisco, California Facsimile: (415) PGETariffs@pge.com Any person (including individuals, groups, or organizations) may protest or respond to an advice letter (General Order 96-B, Section 7.4). The protest shall contain the following information: specification of the advice letter protested; grounds for the protest; supporting factual information or legal argument; name, telephone number, postal address, and (where appropriate) address of the protestant; and statement that the protest was sent to the utility no later than the day on which the protest was submitted to the reviewing Industry Division (General Order 96-B, Section 3.11).

10 Advice 4991-E January 3, 2017 Effective Date Pursuant to General Order (GO) 96-B and D , this advice letter is submitted with a Tier 3 designation and will be effective upon Commission approval. Notice In accordance with General Order 96-B, Section IV, a copy of this advice letter is being sent electronically and via U.S. mail to parties shown on the attached list and the parties on the service list for R Address changes to the General Order 96-B service list should be directed to PG&E at address PGETariffs@pge.com. For changes to any other service list, please contact the Commission s Process Office at (415) or at Process_Office@cpuc.ca.gov. Send all electronic approvals to PGETariffs@pge.com. Advice letter filings can also be accessed electronically at: /S/ Erik Jacobson Director, Regulatory Relations cc: Service List R

11 CALIFORNIA PUBLIC UTILITIES COMMISSION ADVICE LETTER FILING SUMMARY ENERGY UTILITY MUST BE COMPLETED BY UTILITY (Attach additional pages as needed) Company name/cpuc Utility No. Pacific Gas and Electric Company (ID U39 E) Utility type: Contact Person: Yvonne Yang ELC GAS Phone #: (415) PLC HEAT WATER and EXPLANATION OF UTILITY TYPE ELC = Electric GAS = Gas PLC = Pipeline HEAT = Heat WATER = Water (Date Filed/ Received Stamp by CPUC) Advice Letter (AL) #: 4991-E Tier: 3 Subject of AL: Request for Approval of Tariff Language to Implement the Policy on the Use of Prohibited Resources for Demand Response Approved in Decision Keywords (choose from CPUC listing): Compliance AL filing type: Monthly Quarterly Annual One-Time Other If AL filed in compliance with a Commission order, indicate relevant Decision/Resolution #: D Does AL replace a withdrawn or rejected AL? If so, identify the prior AL: No Summarize differences between the AL and the prior withdrawn or rejected AL: Is AL requesting confidential treatment? If so, what information is the utility seeking confidential treatment for: No Confidential information will be made available to those who have executed a nondisclosure agreement: N/A Name(s) and contact information of the person(s) who will provide the nondisclosure agreement and access to the confidential information: Resolution Required? Yes No Requested effective date: Upon Commission s Approval Estimated system annual revenue effect (%): N/A Estimated system average rate effect (%): N/A No. of tariff sheets: N/A When rates are affected by AL, include attachment in AL showing average rate effects on customer classes (residential, small commercial, large C/I, agricultural, lighting). Tariff schedules affected: N/A Service affected and changes proposed: N/A Pending advice letters that revise the same tariff sheets: N/A Protests, dispositions, and all other correspondence regarding this AL are due no later than 20 days after the date of this filing, unless otherwise authorized by the Commission, and shall be sent to: California Public Utilities Commission Pacific Gas and Electric Company Energy Division EDTariffUnit 505 Van Ness Ave., 4 th Flr. San Francisco, CA EDTariffUnit@cpuc.ca.gov Attn: Erik Jacobson Director, Regulatory Relations c/o Megan Lawson 77 Beale Street, Mail Code B10C P.O. Box San Francisco, CA PGETariffs@pge.com

12 PG&E Gas and Electric Advice Filing List General Order 96-B, Section IV AT&T Division of Ratepayer Advocates Office of Ratepayer Advocates Albion Power Company Don Pickett & Associates, Inc. OnGrid Solar Alcantar & Kahl LLP Douglass & Liddell Pacific Gas and Electric Company Anderson & Poole Downey & Brand Praxair Atlas ReFuel Ellison Schneider & Harris LLP Regulatory & Cogeneration Service, Inc. BART Evaluation + Strategy for Social SCD Energy Solutions Innovation Barkovich & Yap, Inc. G. A. Krause & Assoc. SCE Bartle Wells Associates GenOn Energy Inc. SDG&E and SoCalGas Braun Blaising McLaughlin & Smith, P.C. GenOn Energy, Inc. SPURR Braun Blaising McLaughlin, P.C. Goodin, MacBride, Squeri, Schlotz & San Francisco Water Power and Sewer Ritchie CENERGY POWER Green Charge Networks Seattle City Light CPUC Green Power Institute Sempra Energy (Socal Gas) California Cotton Ginners & Growers Assn Hanna & Morton Sempra Utilities California Energy Commission ICF SoCalGas California Public Utilities Commission International Power Technology Southern California Edison Company California State Association of Counties Intestate Gas Services, Inc. Southern California Gas Company (SoCalGas) Calpine Kelly Group Spark Energy Casner, Steve Ken Bohn Consulting Sun Light & Power Center for Biological Diversity Leviton Manufacturing Co., Inc. Sunshine Design City of Palo Alto Linde Tecogen, Inc. City of San Jose Los Angeles County Integrated Waste TerraVerde Renewable Partners Management Task Force Clean Power Los Angeles Dept of Water & Power TerraVerde Renewable Partners, LLC Clean Power Research MRW & Associates Tiger Natural Gas, Inc. Coast Economic Consulting Manatt Phelps Phillips TransCanada Commercial Energy Marin Energy Authority Troutman Sanders LLP Cool Earth Solar, Inc. McKenna Long & Aldridge LLP Utility Cost Management County of Tehama - Department of Public McKenzie & Associates Utility Power Solutions Works Crossborder Energy Modesto Irrigation District Utility Specialists Crown Road Energy, LLC Morgan Stanley Verizon Davis Wright Tremaine LLP NLine Energy, Inc. Water and Energy Consulting Day Carter Murphy NRG Solar Wellhead Electric Company Defense Energy Support Center Nexant, Inc. Western Manufactured Housing Communities Association (WMA) Dept of General Services ORA YEP Energy