2012-2014 Demand Response Program


Demand Response is a set of actions taken to reduce electric loads during times of emergencies or grid congestion, in order to: 1) Balance supply and demand such that demand does not exceed supply or 2) Alleviate rising electric supply costs.

In March 2011, PG&E, Edison, and SDG&E requested a combined $533 million to fund Demand Response programs for the 2012-14 program cycle.  In April 2012, the Commission issued a Decision reducing the utilities’ requested budgets by $76.1 million and ordered:

  • Retention of the Total Resource Cost (TRC) as the threshold for cost effectiveness
  • Program Administrator Cost (PAC) test and Ratepayer Impact Measure test will be used for context. 
  • A TRC error band of 10% due to the uncertainty of the cost effectiveness studies.
  • A TRC of 0.9 or greater is the threshold for a cost effective program.  
  • Modification of certain programs to meet a TRC of 0.9 (with 1.0 deemed cost-effective) for 2012-2014 program cycle only.
  • Move two types of Demand Response programs (Price-responsive and Reliability) toward direct participation in the CAISO wholesale market and operations.


DRA Policy Position

DRA supported the CPUC’s reduction of the budget reduction and the directive to modify programs that are not cost-effective.  However, DRA opposed the reduction of the cost-effectiveness threshold to a TRC of .09.  CPUC workshops will be useful to address any deficiencies in the current cost-effectiveness protocols.  DRA supports an aggressive move toward CAISO wholesale markets. The CPUC’s reduction in program budgets is consistent with DRA’s recommendations that budgets be reduced by $80M by eliminating certain non-cost-effective programs.

See DRA's August 22, 2011 Opening Brief.

See DRA's September 9, 2011 Reply Brief.


Proceeding Status

See the Proceeding docket.