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May 13, 2010
Brattle Principal Joe Wharton Presents Results from PG&E’s Demand Response Programs to the California Demand Response Measurement and Evaluation Committee

On Thursday, May 13, 2010 Brattle principal Dr. Joe Wharton delivered a presentation at a statewide Demand Response Load Impact Workshop sponsored by the California Demand Response Measurement and Evaluation Committee (DRMEC) regarding results from the demand response (DR) programs enrollment forecasting model prepared for PG&E. The DRMEC is a formal committee operating under the auspices of the California Public Utilities Commission (CPUC) to oversee the evaluation of statewide demand response activities. Dr. Wharton’s presentation, "Modeling the Enrollment Forecasts for PG&E’s Non-Residential DR Programs 2010 – 2020," was based on work sponsored by PG&E and done by a team from Brattle’s San Francisco office. In his presentation, Dr. Wharton laid out a set of the econometric and other analytical methodologies that Brattle used for 16 current and planned DR programs for non-residential customers, which supported the annual filings by PG&E on April 1, 2010. Following CPUC Load Impact Protocols, PG&E combined these enrollment forecasts with independently developed forecasts of load reduction per enrollee. The product of these forecasts determines the amount of megawatts (MW) of long-run DR resources that PG&E expects to develop to meet California’s policy of aggressively pursuing demand-side energy solutions. The results of the analysis indicate growth in enrollment for all but one of PG&E’s 14 continuing DR programs. The largest absolute growth is attributed to the new Peak Day Pricing (PDP) program, which takes advantage of the systematic installation of over 590,000 smart meters for medium- and small-sized PG&E business customers between 2009 and 2012. The forecast shows the dramatic impact of the CPUC’s policy of defaulting applicable customers on the PDP rate but always allowing them to opt out to Time of Use (TOU) rates if they prefer. Among PG&E’s largest customers, PDP is expected to grow from roughly 540 participants in 2009 to over 4,000 in 2013. From PG&E’s medium- and small-sized customers, a much larger group of 250,000 customers are expected to join PDP. Finally, another 290,000 customers will join a TOU rate, which is becoming the mandatory rate for those who do not choose PDP. By 2013, all PG&E non-residential customers will be paying time-differentiated rates, which encourage less electricity usage and thus bill savings when power costs are the highest. The model forecasts equally important growth in the enrollment of customers in PG&E’s ongoing DR programs, driven by enhanced marketing of these well-designed programs. For example, the Base Interruptible Program (BIP) is currently the largest DR program with about 185 customers and 180 MWs of DR resource. Through 2020, its enrollment is forecast to grow by 50 percent among the large-sized customers. The BIP customers provide significant load response for emergency situations. Another example is the successful Aggregator Managed Portfolio (AMP) that is operated by third party “aggregators” under contract with PG&E, who recruit customers and provide technical enhancement so as to support reliable DR performance. AMP is expected to grow 70 percent by 2020, under the assumption that the CPUC approves contract amendments that PG&E has negotiated and submitted. To view Dr. Wharton’s presentation, please follow the link below.