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STRAW PROPOSALS FOR LOAD IMPACT ESTIMATION AND COST EFFECTIVENESS EVALUATION OF BEFORE THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking Regarding
Policies and Protocols for Demand Response
Load Impact Estimates, Cost-Effectiveness
Methodologies, Megawatt Goals and Alignment
with California Independent System Operator
Market Design Protocols.
Rulemaking 07-01-041


STRAW PROPOSALS FOR LOAD IMPACT ESTIMATION AND
COST EFFECTIVENESS EVALUATION OF
SOUTHERN CALIFORNIA EDISON COMPANY, SAN DIEGO GAS & ELECTRIC
COMPANY, AND PACIFIC GAS AND ELECTRIC COMPANY PURSUANT TO THE
ASSIGNED COMMISSIONER AND ADMINISTRATIVE LAW JUDGES SCOPING
MEMO AND RULING DATED APRIL 18, 2007



PETER OUBORG




MICHAEL D. MONTOYA
SHIRLEY A. WOO



JANET S. COMBS
Pacific Gas and Electric Company


Southern California Edison Company

77 Beale Street, B30A



2244 Walnut Grove Avenue
San Francisco, CA 94105



P. O. Box 800
Telephone: (415) 973-2248


Rosemead, CA 91770
Facsimile: (415) 973-0516


Telephone: (626) 302-1524
E-Mail:
SAW0@pge.com



Facsimile: (626) 302-7740







Email:
janet.combs@sce.com

Attorneys for
PACIFIC GAS AND ELECTRIC COMPANY
Attorneys for













SOUTHERN CALIFORNIA EDISON







COMPANY
STEVEN
D.
PATRICK
San Diego Gas & Electric Company


101 Ash Street
San Diego, CA 92101-3017
Telephone:
(213) 244-2954
Facsimile: (213)
629-9620
Email:
spatrick@sempra.com


Attorney for
SAN DIEGO GAS & ELECTRIC COMPANY




Dated: July 16, 2007


- 1 -

BEFORE THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking Regarding
Policies and Protocols for Demand Response
Load Impact Estimates, Cost-Effectiveness
Methodologies, Megawatt Goals and
Alignment with California Independent
System Operator Market Design Protocols.
Rulemaking 07-01-041


STRAW PROPOSALS FOR LOAD IMPACT ESTIMATION AND
COST EFFECTIVENESS EVALUATION OF
SOUTHERN CALIFORNIA EDISON COMPANY, SAN DIEGO GAS & ELECTRIC
COMPANY, AND PACIFIC GAS AND ELECTRIC COMPANY PURSUANT TO THE
ASSIGNED COMMISSIONER AND ADMINISTRATIVE LAW JUDGES
SCOPING MEMO AND RULING DATED APRIL 18, 2007



The Assigned Commissioner and Administrative Law Judges Scoping Memo and Ruling
(ACR) established the first two topics for this rulemaking: 1) establish a comprehensive set of
protocols for estimating the load impacts of demand response programs and 2) establish
methodologies to determine the cost-effectiveness of demand response programs. The ACR then
directed Southern California Edison Company (SCE), San Diego Gas & Electric Company
(SDG&E) and Pacific Gas and Electric Company (PG&E) (together, Joint Utilities) to submit
straw proposals on load impact estimation and cost effectiveness methodology for consideration
in workshops set for July 19-20 and August 1-3. The Joint Utilities submit the straw proposals
for load impact estimation and cost effectiveness methodology attached to this pleading in
compliance with the ACR and the Administrative Law Judges May 25, 2007 ruling (Ruling).
1
/


1/
The ACR set July 13, 2007 as the date for filing the load impact and cost effectiveness straw
proposals. On July 11, 2007, ALJ Hecht granted the Joint Utilities request for an extension to
July 16, 2007 and made the extension applicable to other parties who will file straw proposals.
- 2 -
The Ruling states that the major focus of the straw proposals is to develop a useable
overall framework and methodology, and the process should not focus disproportionately on
defining any given input value. (Ruling, page 3) To define the key issues for the Joint Utilities
straw proposals and to suggest, but not limit, possible approaches for addressing those issues, the
Ruling also distributed a Staff Guidance document. The Staff Guidance includes issue areas that
are contentious and complex, as the Ruling acknowledges in its discussion of the cost
effectiveness straw proposal. The Staff Guidance also requires the straw proposals to include
new, unexplored, difficult areas, especially for load impact estimates from demand response
programs.
2
/

The Joint Utilities straw proposals cover all the issue areas identified in the Staff
Guidance, but the depth and degree of sophistication in the straw proposals have been
constrained by the broad span of the issues, their complexity, their novelty in some instances,
and the limited time available to develop the proposals. Therefore the Joint Utilities appreciate
the Rulings acknowledgement that additional work will be needed to develop robust protocols
for estimating load impact and to resolve cost effectiveness methodological issues and inputs.
(Ruling, page 3.)
///
///
///


2/
Two examples of issue areas (without limitation) that involve uncharted, difficult territory are ex
ante estimation for load impacts and dynamic pricing for cost effectiveness. These required
topics in the Staff Guidance significantly increase the scope and complexity of the straw
proposals, and may require additional time and effort beyond this part of R.07-01-041 to be
developed.
- 3 -
The attached Joint Utilities straw proposals are as comprehensive as possible given the
tasks required and the time available. The Joint Utilities respectfully request that the parties and
the Commission recognize that further developments should be expected and allowed for load
impact estimation protocols and cost effectiveness methodologies in the future.

Respectfully submitted,

PETER OUBORG
SHIRLEY A. WOO


/s/
Pacific Gas and Electric Company
77 Beale Street
San Francisco, CA 94105
Telephone: (415) 973-2248
Facsimile: (415) 973-0516
E-Mail: SAW0@pge.com

Attorneys for
PACIFIC GAS AND ELECTRIC COMPANY

On behalf of SOUTHERN CALIFORNIA EDISON
COMPANY AND SAN DIEGO GAS & ELECTRIC
COMPANY

July 16, 2007





Joint IOU Straw Proposal on Load Impact Estimation for
Demand Response







Submitted by:
Pacific Gas & Electric Co.
Southern California Edison Co.
San Diego Gas & Electric Co.


Prepared by:

Stephen S. George, Ph. D.
Michael Sullivan, Ph. D.
Josh Bode

Freeman, Sullivan & Co.


July 16, 2007

Joint IOU Straw Proposal on Load Impact Estimation for
Demand Response
1

EXECUTIVE SUMMARY..................................................................................................... 1

2

BACKGROUND AND OVERVIEW .................................................................................... 6

2.1

B
ACKGROUND
....................................................................................................................... 6

2.2

T
AXONOMY OF
D
EMAND
R
ESPONSE
P
ROGRAMS
............................................................... 8

2.3

P
URPOSE OF THIS
D
OCUMENT
........................................................................................... 11

2.4

R
EPORT
O
RGANIZATION
.................................................................................................... 12

3

EVALUATION PLANNING ............................................................................................... 13

3.1

U
NDERSTANDING
DR

I
MPACTS AND
B
ENEFITS
................................................................ 13

3.2

U
NDERSTANDING
W
HAT
I
S
N
EEDED
................................................................................. 15

3.3

E
X
P
OST
V
ERSUS
E
X
A
NTE
E
STIMATION
.......................................................................... 17

3.4

P
ROGRAM
L
IFE
C
YCLE
C
ONSIDERATIONS
....................................................................... 17

3.5

P
ROGRAM
S
IZE
................................................................................................................... 18

3.6

M
ASS
M
ARKET
V
ERSUS
L
ARGE
C&I

P
ROGRAMS
............................................................ 18

3.7

E
VALUATION
T
ODAY AND
E
VALUATION
T
OMORROW
.................................................... 19

4

EX POST EVALUATION FOR EVENT BASED PROGRAMS ..................................... 20

4.1

P
ROTOCOLS
......................................................................................................................... 20

4.1.1

T
IME
P
ERIODS
...................................................................................................