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Calif. PUC Draft Would Impose Conditions for Demand Response to Receive Local RA Credit
August
10, 2011
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The California PUC issued a proposed decision which would modify several aspects of the treatment of demand response under the Resource Adequacy (RA) mechanism.
Specifically, the proposed order (R.09-10-032) would adopt the following changes to the current RA rules for demand response resources:
- A demand response resource may receive local RA credit only if it is capable of being dispatched by local area. This requirement would go into effect for the 2013 RA compliance year.
- Creation of a new Maximum Cumulative Capacity bucket for demand response resources for 2013. Implementation details on the new Maximum Cumulative Capacity bucket for demand resources would be deferred to the upcoming 2013 RA compliance year proceeding.
- Fossil-fueled emergency back-up generation resources would not be permitted to receive system or local RA credit as demand response resources.
Limiting demand response's ability to receive local RA credit to cases in which the resource is capable of being dispatched by local area was first proposed by the California ISO, and opposed by the utilities.
The draft decision would, "agree in principle with the CAISO that the fundamental reason for a locational dispatchability requirement for all RA resources is to meet local capacity needs."
"This rule will make demand response resources provide reliability benefits similar to other RA resources. The alternative -- forcing the CAISO to manage demand response resources that do not meet a locational dispatchability requirement -- could increase energy costs for consumers by requiring the CAISO both to purchase capacity which may not fit its needs or to purchase additional capacity to cover uncertainties about dispatch," the draft concludes.
Furthermore, the draft would allow the utilities, for the 2013 RA compliance year, to request from the PUC Energy Division exemptions from the rule for specific demand response programs.
The draft would deny a proposed modification to use a registered capacity method to measure the Qualifying Capacity of a Proxy Demand Resource Product, instead of using the previously adopted load impact protocols. The proposed modification was supported by retail suppliers. The draft would instead continue to use the load impact protocols for demand response resources, consistent with D.10-06-036.
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