BEFORE the PUBLIC UTILITIES COMMISSION of the STATE of CALIFORNIA Application of San Diego Gas & Electric Company (U-902-E)
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BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of San Diego Gas & Electric Company (U-902-E) Requesting Approval and Funding for Application No. A.17-01-___ 2018-2022 Demand Response Portfolio in (Filed January 17, 2017) compliance with Decision 16-09-056. APPLICATION OF SAN DIEGO GAS & ELECTRIC COMPANY (U 902 E) REQUESTING APPROVAL AND FUNDING FOR 2018-2022 DEMAND RESPONSE PORTFOLIO E. Gregory Barnes Attorney for SAN DIEGO GAS & ELECTRIC COMPANY 8330 Century Park Court, CP32D San Diego, California 92123 Telephone: (858) 654-1583 Facsimile: (619) 699-5027 Email: [email protected] January 17, 2017 TABLE OF CONTENTS I. INTRODUCTION .............................................................................................................. 1 A. Summary of Funding Request ................................................................................ 1 B. Background and Guiding Principles for SDG&E’s Demand Response (DR) Portfolio .................................................................................................................. 2 C. Portfolio Cost Effectiveness Reflects that DR is in a Transition Period ................ 5 D. Supporting Testimony ............................................................................................. 8 II. STATUTORY AND PROCEDURAL REQUIREMENTS................................................ 8 A. Rule 2.1(a) – (c) ...................................................................................................... 8 1. Rule 2.1(a) – Legal Name ........................................................................... 8 2. Rule 2.1(b) – Correspondence .................................................................... 9 3. Rule 2.1(c) – Category, issues and schedule ............................................... 9 a. Proposed Category of Proceeding ................................................... 9 b. Need for Hearings ........................................................................... 9 c. Issues to be Considered ................................................................... 9 d. Proposed Schedule .......................................................................... 9 B. Rule 2.2 – Articles of Incorporation ..................................................................... 10 C. Rule 3.2 – Authority to Change Rates .................................................................. 10 1. Rule 3.2(a)(1) – Balance Sheet ................................................................. 10 2. Rule 3.2(a)(2) – Statement of Effective Rates .......................................... 10 3. Rule 3.2(a)(3) – Statement of Proposed Rate Change .............................. 10 4. Rule 3.2(a)(4) – Description of Property and Equipment ......................... 11 5. Rule 3.2(a)(5) and (6) – Summary of Earnings ........................................ 11 6. Rule 3.2(a)(7) – Statement Regarding Tax Depreciation ......................... 11 7. Rule 3.2(a)(8) – Proxy Statement ............................................................. 12 8. Rule 3.2(a)(10) – Statement re Pass Through to Customers ..................... 12 9. Rule 3.2(b) – Notice to State, Cities and Counties ................................... 12 10. Rule 3.2(c) – Newspaper Publication ....................................................... 12 11. Rule 3.2(d) – Bill Insert Notice ................................................................. 13 III. SERVICE .......................................................................................................................... 13 IV. CONCLUSION ................................................................................................................. 13 VERIFICATION ATTACHMENT A - Financials, Balance Sheet, Income Statement Q3 2016 i ATTACHMENT B - Electric Tariff Table of Contents Effective January 1, 2017 ATTACHMENT C - Statement of Proposed Rate Increases ATTACHMENT D - Original Cost and Depreciation Q3 2016 ATTACHMENT E - Summary of Earnings Q3 2016 ATTACHMENT F - Service List - Notice to State, Cities, and Counties ii BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of San Diego Gas & Electric Company (U-902-E) Requesting Approval and Application No. A.17-01-___ Funding for 2018-2022 Demand Response (Filed January 17, 2017) Portfolio in compliance with Decision 16-09- 056. APPLICATION OF SAN DIEGO GAS & ELECTRIC COMPANY (U 902 E) REQUESTING APPROVAL AND FUNDING FOR 2018-2022 DEMAND RESPONSE PORTFOLIO Pursuant to Article 2 of the Commission’s Rules of Practice and Procedure and Decision (“D.”) 16-09-056,1 San Diego Gas & Electric Company (SDG&E) submits this application requesting approval and funding for its 2018-2022 demand response portfolio. I. INTRODUCTION The basis for SDG&E’s application is described below, along with a description of the testimony supporting the application served contemporaneously herewith. This testimony provides the detail supporting SDG&E’s request for funding. A. Summary of Funding Request SDG&E’s total funding request in this application for the period 2018-2022 is $97.9 million, as summarized in the following table: 1 Decision Adopting Guidance for Future Demand Response Portfolios and Modifying Decision 14-12- 024 (October 5, 2016), at 97, ordering paragraph 6, requires: No later than January 16, 2017, Pacific Gas and Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company [collectively referred to herein as the “IOUs”] shall each file an application requesting approval and funding for 2018 demand response portfolios for existing models of demand response programs and activities pursuant to the guidance provided in this decision. Id., at 98, ordering paragraph 9, provides that such applications shall be for program years 2018-2022. D.16-12-032 (December 5, 2016) corrects errors in D.16-09-056 but does not affect the citations in this application. [Greg – not sure if you want to include this statement, so feel free to delete.] Total Budget Request 2018 2019 2020 2021 2022 TOTAL $ Millions $22.2 $19.1 $18.7 $19.0 $19.0 $97.9 These numbers include requests of $3,259,000 for Electric Rule 32 direct market participation support, and $4,778,000 for the Demand Response Auction Mechanism (DRAM) budget. Both the Electric Rule 32 and DRAM requests are outside the demand response portfolio, and therefore, SDG&E does not include these two cost categories in the DR portfolio. The prepared direct testimony of B. Elaine MacDonald2 details the proposed budgets for 2018 through 2022 demand response portfolio under the authorized funding categories, plus program cost recovery, fund-shifts and reporting. B. Background and Guiding Principles for SDG&E’s Demand Response (DR) Portfolio This application proposes to enable SDG&E to continue to provide its customers with innovative DR programs that offer customers options that fit their homes and businesses. At the end of 2016, SDG&E counted over 28,000 thermostats installed through its technology program, giving customers even more control over their energy usage. As a provider of both Energy Efficiency and DR programs, along with a host of other customer touch points, SDG&E has a great opportunity to encourage customers to achieve a clean energy future. SDG&E is eager to leverage this position to provide offerings that help achieve the state’s climate goals. SDG&E’s proposals for the 2018-2022 Demand Response portfolio represent a culmination of recent Commission directives aimed at transitioning DR to an integrated CAISO3 2 Chapter 6 of the testimony supporting this application and served contemporaneously herewith. See, id., especially Tables EMD A-1 through A-3 at pp. EMD-1-4. 3 California Independent System Operator Corporation. 2 resource, increasing third-party participation, and improving programs through technology neutrality. Most importantly, 2018 represents the first year of full bifurcation of the utility’s programs. All SDG&E programs are clearly identified as either (1) supply side (SS) resources, and bid into the CAISO markets by the utility; or (2) Load Modifying DR (LMDR) which helps the utility shift or reduce loads at critical or peak times thereby reducing the load forecast or supporting local sub-lap needs. Further, SDG&E’s broad program portfolio supports the Commission’s objective of streamlining and consolidating DR in the DR portfolio,4 as well as maintaining the utility’s role as a strong and viable supplier of both supply side and load modifying DR. D.15-02-007 adopted the Joint Party proposal which established working groups and the performance of a demand response potential study.5 D.14-12-024 required full implementation of the bifurcation of demand response programs by 2018 (and hence, full integration of supply side resources into the CAISO market), with 2016 and 2017 denoted as transition years.6 D.16- 09-056 described D.15-02-007 as where: … the Commission solidified its commitment to the integration of demand response into the CAISO market by first concluding that event-based load modifying resources have no measureable capacity value and thus requiring that only demand response programs integrated into the CAISO energy market or embedded in the California Energy Commission’s unmanaged/base case load forecast will receive capacity value.7 4 R.13-09-011, Joint Assigned Commissioner and Administrative Law Judge’s Ruling Providing Guidance for 2017 Demand Response Programs and Activities Proposal Filings (September 15, 2015) at 13.