Dive Brief:
- The California Public Utilities Commission last week ordered Pacific Gas & Electric and San Diego Gas & Electric to revisit the results of the state's second demand response auction, and procure additional capacity up to budget limitations, Greentech Media reports.
- Following the state's second Demand Response Auction Mechanism (DRAM), a group of suppliers complained the utilities examined less than half the bids required and should have acquired more capacity.
- PG&E will be required to spend another $6 million, and Greentech Media reports SDG&E must acquire $1.5 million more in DR resources. They will have 30 days to develop a plan to address the order.
Dive Insight:
In a win for third-party providers, California regulators agreed with their contention that SDG&E and PG&E "improperly limited" the bids they accepted in the most-recent demand response auction.
The commission's order directed PG&E to "re-evaluate all DRAM bids received in response to the original solicitation and procure additional DRAM capacity until either the applicable budget limitation is hit" or offers are depleted. The capacity will be for delivery beginning March or April, "up to either the registration limit, budget cap, or up to a point after which there are clear price outliers."
A similar order addressed SDG&E's DRAM capacity.
Several providers, Comverge, CPower, EnerNOC and EnergyHub, had petitioned the CPUC in August to direct utilities to acquire more capacity. “The Commission has stated that the minimums are just that—a floor, not a ceiling,” the group wrote.
When the auction results were announced in August, the three investor-owned utilities had acquired roughly 81 MW, with Southern California Edison netting 56 MW, PG&E clearing 21.4 MW and SDG&E netting 4 MW. SCE's auction results have already been approved.
The lackluster results were a disappointment following the success of the first DRAM auction. Last year the utilities acquired more than 40 MW of demand response resources compared to the required minimum of 22 MW. Total DR procurement through the innovative program now stands at roughly 120 MW.
