DRAFT

PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Item No: 7 (Rev.1)

Agenda ID: 20180
ENERGY DIVISION RESOLUTION E-5186
January 13, 2022

R E S O L U T I O N

Resolution E-5186. San Diego Gas & Electric Company’s Demand

Response Programs’ Cost-Effectiveness pursuant to Decision 17-12-
003.

PROPOSED OUTCOME:
 Approves the Tier 1 Advice Letter filed by San Diego Gas & Electric
Company (SDG&E) reporting the costs and cost-effectiveness of
SDG&E’s Demand Response programs for Program Year 2019
pursuant to Ordering Paragraph 53 of Decision 17-12-003.
 Orders SDG&E to propose significant modifications to its Demand
Response portfolio to address its Demand Response programs’
failing cost-effectiveness; and include the proposals in its 2023-2027
Demand Response Portfolio Application consistent with Ordering
Paragraph 61 of Decision 17-12-003, and which is due on May 2,
2022.
 Declines to order SDG&E to submit a separate Demand Response
application with significant modifications to improve the cost-
effectiveness of its Demand Response portfolio, as was directed by
Decision 17-12-003.

SAFETY CONSIDERATIONS:
 There is no direct impact on safety.

ESTIMATED COST:
 This Resolution is not expected to increase costs, and it may reduce
costs by avoiding duplicate filings and redundant compliance.

By Advice Letter SDG&E AL 3562-E, filed on June 29, 2020.

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__________________________________________________________

SUMMARY

This Resolution finds that San Diego Gas & Electric Company (SDG&E)
complied with Ordering Paragraph (OP) 53 of Decision (D.) 17-12-003 in that
SDG&E Advice Letter 3562-E contains all the reporting elements on Demand
Response (DR) program cost-effectiveness that were required by the Decision.
This Resolution orders SDG&E to propose significant improvements to its DR
portfolio to address its DR programs’ failing cost-effectiveness and include the
proposals in its 2023-2027 DR Portfolio Application. Ordering Paragraph 61 of
D.17-12-003 directed SDG&E to file its 2023-2027 DR Portfolio Application on
November 1, 2021, which has been extended to May 2, 2022.1 This Resolution also
declines to order SDG&E to submit a separate Demand Response application
with significant modifications to improve the cost-effectiveness of its DR
portfolio, as was described by Decision 17-12-003.

BACKGROUND

On June 29, 2020, SDG&E filed Advice Letter 3562-E pursuant to OP 53 of D.17-
12-003, which directed SDG&E to submit a Tier 1 advice letter in June 2020
showing the costs and demonstrating the cost-effectiveness of SDG&E’s DR
programs administered in the previous year. OP 53 of D.17-12-003 specifically
directed SDG&E to submit a Tier 1 advice letter that includes the following:

1. The costs and cost-effectiveness of SDG&E’s DR programs administered in

the previous program year;

2. Progress reports on all the 2017 improvements SDG&E is in the process of

implementing or has implemented, including a description of the
improvement, its implementation status, and how it will impact or has
impacted the Total Resource Cost (TRC) ratios;

1
Per an Executive Director letter dated September 30, 2021, the Investor-Owned Utilities
were granted a 6-month extension of time due to ongoing DR work in the Summer
Reliability rulemaking.
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3. Report on the new changes and improvements to SDG&E’s portfolio to

improve the cost-effectiveness, including description of the programmatic
change, timeline for implementation, and how it will impact the TRC ratio
of the affected program; and

4. Updated cost-effectiveness ratios based on changing conditions, e.g.

programmatic changes, reductions in spending, market conditions, etc.

D.17-12-003 also states that if SDG&E failed to demonstrate improvements in its

DR programs’ cost-effectiveness through this advice letter, the Commission will
direct SDG&E to file an application in 2020 to propose significant changes to
improve its DR portfolio.2

NOTICE

Notice of SDG&E Advice Letter 3562-E was made by publication in the

Commission’s Daily Calendar. SDG&E states that a copy of the Advice Letter
was mailed and distributed in accordance with Section 4 of General Order 96-B.

PROTESTS

SDG&E Advice Letter 3562-E was timely protested by the Public Advocates
Office at the California Public Utilities Commission (Cal Advocates) on July 20,
2020. Cal Advocates points out that SDG&E’s reported cost-effectiveness ratios
fail to demonstrate the cost-effectiveness of its DR programs. 3 Cal Advocates also
points out that if SDG&E fails to demonstrate improvements in its DR programs’
cost-effectiveness through this advice letter, the Commission must direct SDG&E
to file an application in 2020 to propose significant changes to improve its DR
portfolio.4 As a result, Cal Advocates requested that the Commission direct

2
D.17-12-003, p. 130.
3
Cal Advocates Protest, p. 2.
4
Cal Advocates Protest, p. 2.
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SDG&E to file an application within 90 days of the disposition of this advice

letter to propose significant changes to improve its DR programs. 5

SDG&E timely responded to the protest of Cal Advocates on July 27, 2020. While
SDG&E did not dispute the facts regarding the failing cost-effectiveness of its DR
programs,6 it explained that Cal Advocates request was unfeasible. First, SDG&E
stated that the timing of Cal Advocates’ request, to file a DR application within
90 days, was misplaced and would lead to duplication of effort because SDG&E
would begin preparing its next application for its DR programs in the spring of
2021 in order to meet the on-cycle filing deadline of November 1, 2021, for the
Investor-Owned Utilities’ (IOUs) DR applications.7 SDG&E explained that
ordering a separate DR application would create a separate DR proceeding from
the other two IOUs, thereby duplicating regulatory effort.8 In addition, SDG&E
explained that it would take several months to develop an application and
would require the effort of its staff resources that were already engaged in the
DR season.9 Thus, SDG&E asserted that the timing of Cal Advocates’ request
would create a significant amount of work for Commission and SDG&E staff that
would result in minimal gain.10 Second, SDG&E asserted that the timing of Cal
Advocates request was not guaranteed to bring about improved cost-
effectiveness as it would unnecessarily shorten the research, planning, and
decision-making processes that are currently underway and necessary for the
preparation of SDG&E’s 2023-2027 DR Portfolio Application.11

5
Cal Advocates Protest, pp. 2, 4.
6
SDG&E Reply to Cal Advocates Protest, pp. 1-2.
7
SDG&E Reply to Cal Advocates Protest, p. 2.
8
SDG&E Reply to Cal Advocates Protest, p. 2.
9
SDG&E Reply to Cal Advocates Protest, p. 2.
10
SDG&E Reply to Cal Advocates Protest, p. 2.
11
SDG&E Reply to Cal Advocates Protest, p. 3.
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DISCUSSION

The Commission has reviewed SDG&E Advice Letter 3562-E, the protest, and
SDG&E’s reply and finds that SDG&E complied with OP 53 of D.17-12-003 in
that the Advice Letter contains all the reporting elements on DR program cost-
effectiveness that were required by the decision.

Cal Advocates cites Section 2 of Section 7.4.2 in the General Rules of General
Order (GO) 96-as grounds for its protest:

(2) The relief requested in the advice letter would violate statute or Commission
order, or is not authorized by statute or Commission order on which the utility
relies:

We appreciate Cal Advocates’ arguments but disagree with its suggestions

because SDG&E did comply with OP 53 of D.17-12-003. As described above, we
find that SDG&E has provided all of the information required by the decision.

Cal Advocates also requests that the Commission direct SDG&E to file an
application within 90 days of the disposition of the Advice Letter to propose
significant changes to improve its DR programs. We appreciate that this request
is consistent with our prior Decision but decline to take this action because it
would be impractical given the facts currently at hand. Ordering Paragraph 61 of
D.17-12-003 ordered the IOUs to file their 2023-2027 DR Portfolio Applications on
November 1, 2021, which has been extended to May 2, 2022. At this time,
ordering SDG&E to file a separate DR application within 90 days to address its
DR programs’ cost-effectiveness, while its 2023-2027 DR Portfolio Application is
also due in May of 2022, would create duplicate processes to review SDG&E’s
DR programs. This would strain Energy Division staff resources who are already
committed to the CPUC’s summer reliability proceeding (R.21-11-003) where DR
issues are a central focus. We conclude that both stakeholder and Energy
Division staff resources can better address SDG&E’s cost-effectiveness issues in
its upcoming 2023-2027 DR Portfolio Application rather than soliciting two
separate Applications for similar purposes. As such, we find it reasonable to
direct SDG&E to propose significant improvements to its DR portfolio to address

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its DR programs’ failing cost-effectiveness and include the proposals in its 2023-
2027 DR Portfolio Application instead of submitting duplicative applications.

COMMENTS

Public Utilities Code section 311(g)(1) provides that this Resolution must be
served on all parties and subject to at least 30 days public review.  Any
comments are due within 20 days of the date of its mailing and publication on
the Commission’s website and in accordance with any instructions
accompanying the notice. Section 311(g)(2) provides that this 30-day review
period and 20-day comment period may be reduced or waived upon the
stipulation of all parties in the proceeding.

The 30-day review and 20-day comment period for the draft of this resolution
was neither waived nor reduced. Accordingly, this draft resolution was mailed
to parties for comments, and will be placed on the Commission's agenda no
earlier than 30 days from today.

No parties filed comments.

FINDINGS

1. Ordering Paragraph (OP) 53 of Decision (D.) 17-12-003 directed San Diego

Gas & Electric Company (SDG&E) to submit a Tier 1 Advice Letter in June
2020 demonstrating the costs and cost-effectiveness of SDG&E’s Demand
Response (DR) programs administered in the program year of 2019.
2. On June 29, 2020, SDG&E filed Advice Letter 3562-E, which was compliant
with the direction given by D.17-12-003 because it included all the reporting
elements required by OP 53 of the decision.
3. D.17-12-003 states that if SDG&E failed to demonstrate improvements in its
DR programs’ cost-effectiveness through the required Tier 1 Advice Letter,
the Commission will direct SDG&E to file an application in 2020 to propose
significant changes to improve its DR portfolio.

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4. Separately, Ordering Paragraph 61 of D.17-12-003 ordered SDG&E to file its

2023-2027 DR Portfolio Application on November 1, 2021, which has been
extended to May 2, 2022.
5. Ordering SDG&E to file a separate DR application within 90 days of this
Resolution to address its DR programs’ cost-effectiveness, when its 2023-2027
DR Portfolio Application is due in May of 2022, would create duplicate
processes to review SDG&E’s DR programs.
6. The review of a separate SDG&E DR application, in addition to the 2023-2027
DR Portfolio Application due in May 2022, would strain Energy Division
staff resources who are already committed to the CPUC’s summer reliability
proceeding (R.21-11-003) where DR issues are a central focus.
7. Energy Division staff and stakeholders can review and better address
SDG&E’s cost-effectiveness issues in SDG&E’s 2023-2027 DR Portfolio
Application.
8. It is reasonable to require SDG&E to propose significant modifications to its
DR portfolio to address its DR programs’ failing cost-effectiveness and
include the proposals in its 2023-2027 DR Portfolio Application.
9. It is reasonable to not require SDG&E to file a separate DR application within
90 days of the date of this Resolution to address its DR programs’ cost-
effectiveness because it would duplicate review processes and strain Energy
Division staff resources.

THEREFORE IT IS ORDERED THAT:

1. San Diego Gas & Electric Company Advice Letter 3562-E is approved.
2. San Diego Gas & Electric Company shall propose significant modifications to
its Demand Response portfolio to address its Demand Response programs’
failing cost-effectiveness and include the proposals in its 2023-2027 Demand
Response Portfolio Application, which is due May 2, 2022.
3. San Diego Gas & Electric Company shall not file a separate Demand Response
application to address its Demand Response programs’ cost-effectiveness.

This Resolution is effective today.

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I certify that the foregoing resolution was duly introduced, passed and adopted
at a conference of the Public Utilities Commission of the State of California held
on January 13, 2022; the following Commissioners voting favorably thereon:

_____________________
Rachel Peterson
Executive Director

Attachment 1:
E-5186 Draft Agenda Resolution (SD&E AL 3562) (Rev.1) Redline.pdf