Details for: 3837-E (Part 1 of 1).pdf

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Gary A. Stern, Ph.D.
Managing Director, State Regulatory Operations

August 2, 2018
(U 338-E)

Information Only Advice Letter
Informational Overview of the Retail Automated Transactive
Energy System Pilot

The advice letter provides the California Public Utilities Commission (Commission) an
overview of the Retail Automated Transactive Energy System (RATES) pilot. Funded by
the California Energy Commission (CEC) under a $3.2 million Electric Program
Investment Charge (EPIC) grant (GFO-15-311), the RATES pilot is a multi-year
experimental retail research study, limited to approximately 100 residential, small and
medium commercial customer volunteers. Universal Devices Inc. and TeMix Inc. are the
EPIC grant awardees and developers and operators for this study, with informational
and technical support provided by Southern California Edison Company (SCE) and the
California Independent System Operator (CAISO).
SCE customers, recruited by the RATES team, are participating in the EPIC study so
that the CEC can better understand how residential, small and medium business
electricity customers can self-manage their electrical usage in innovative ways that can
reduce their costs, maintain their comfort, while automatically responding to dynamic
“buy” and “sell” transactive energy tenders (i.e., priced offers) that reflect the wholesale
and retail costs and support the current environmental and economic California policy
The RATES transactive pricing formulas recover the CAISO locational marginal cost,
delivery losses and fixed costs, and generation fixed cost not included in the CAISO
prices. Participants will be protected from highly variable bills during the RATES study
with the rebates because most of their usage is based on a monthly historical
subscription and they can possibly benefit from these variable prices by automatically
buying when prices are low and selling back when prices are high by shifting and
shaping their energy use automatically. The purpose of this proof of concept pilot is to
test and demonstrate the participant systems and interfaces, the transactive energy
P.O. Box 800

8631 Rush Street

Rosemead, California 91770

(626) 302-9645

Fax (626) 302-6396


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ADVICE 3837-E (U 338-E) -2- August 2, 2018 platform, and the interfaces to the distribution, load serving entity and CAISO systems. As illustrated by Figure 1, the buy and sell tenders in the RATES study are developed based on actual market costs from the CAISO, the SCE distribution operator, and the SCE load-serving entity. Communicated and recorded using a Transactive Energy platform by TeMix, the Transactive Energy tenders are sent to each participant who volunteers for the study. The automated energy management system (ISY) by Universal Devices installed in each home processes the tenders, other forecasting information and participant input from the SCE meter. The RATES optimization algorithms propose schedules for operation of specific participant devices such as air conditioners and pool pumps. It also creates buy and sell transactions that are securely recorded on the Transactive Energy platform ledgers. Figure 1: Key Elements of RATES The RATES study has been designed as an innovative optional rate plan that: • • • Stabilizes participant bills and utility revenues using participant specific subscriptions for electricity consumption to ensure recovery of fixed and variable costs for all parties; Provides variable pricing for increased and decreased usage from the subscribed hourly kW, typically with automated response to the tenders to benefit the participant; and Calculates a monthly bill for the subscription, and the buy and sell transactions that modify the subscription based on the automated response and actual metered usage from the customer. Participants in the RATES study have entered into a participant agreement (Agreement) with Universal Devices Inc. and TeMix Inc.
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ADVICE 3837-E (U 338-E) -3- August 2, 2018 The subscription aspect of the Agreement will use historical meter usage data that the participant has agreed to provide for this pilot using SCE’s Green Button Third Party Connection Service. The subscription kWh quantity in each hour of a year will be shaped to approximate the participants’ historical meter usage. The monthly bill of the subscription will be calculated based on the subscribed hourly quantities and the participant’s current SCE otherwise applicable tariff (OAT). Hence if there is no significant change in participant usage during the study, the participant’s bill will not significantly change and SCE’s revenues will not change. Participants who volunteer for the study are provided with an OpenADR 2.0 certified energy management system (ISY) and connectivity to the RATES platform. The RATES platform sends day-ahead hourly and 5-minute interval real time buy and sell priced tenders to each participant’s energy management system which together with participant preferences are used to help participants manage the operation and costs of operation of their HVAC system, pool pumps, electric vehicle (EV) chargers and other controllable appliances. Additionally, participants are provided with a voice interactive interface to help the participant understand how much they are using and paying for electricity and to set their temperature and other preferences. The process for determining the RATES monthly bill for the purposes of the research study is illustrated in Figure 2. Create Subscription •Hourly Subscription based on meter history •Monthly Cost based on current rate plan Calculate Transactive Net Credit •Transactive Tender Prices based on SCE costs •Automated Forward Transactions modify subscription at Tender Prices •Actual metered usage less subscription quantity automatically transacted at Ex-post Tender Prices Calculate RATES Monthly Bill •Monthly Subscription Cost •Less Monthly Transactive Net Credit Figure 2: How the RATES Monthly Bill is Determined
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ADVICE 3837-E (U 338-E) -4- August 2, 2018 The full impact of customer savings in the RATES study cannot be properly tested without actually implementing the Transactive Energy automatic response of the participant’s devices to changing prices of electricity. The strategy for this assessment is to allow a participant’s RATES energy management system to (1) suggest more cooling, pumping or charging when the transactive tender price from RATES is very low compared to the current SCE OAT price and (2) less cooling, pumping or charging when the transactive tender price is very high compared to the SCE OAT price. Unfortunately, the participant may see a negative benefit of the RATES pilot when the tenders encourage increased usage during lower (or negative) RATES prices due to the current SCE OAT structure, even though both the participant and the overall CAISO system would benefit from the participant’s usage as modified and suggested by the RATES tenders. To resolve this challenge, as illustrated below, a RATES participant rebate process will be developed. Each month the participant will need to continue to pay their regular SCE bill based on their current SCE OAT rate plan, as there is no change to the participants current SCE OAT in the RATES study. As part of the research study, each month the participants will also receive a separate RATES monthly “shadow” bill that they will NOT pay (to illustrate their potential savings). So that participants remain in the study, Universal Devices and TeMix, using project funds from the EPIC grant, will provide the participants rebates each month for possible “excess charges” so they will not pay more than their SCE OAT, and actually potentially less after rebates based on their savings as participants in the RATES pilot. Pay SCE Monthly Bill RATES Monthly Bill Rebate Participant for Cumulative Monthly Bill Savings Figure 3: How the Participant is Billed and Rebated The RATES study is already active in SCE’s territory in its initial stages and the dynamic Transactive Energy tenders (with the rebate processes) are scheduled to commence in July 2018. Universal Devices and TeMix report to the CEC on the results of the study as required by the EPIC grant and such reports will be available to the Commission as requested. No cost information is required for this advice letter.
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ADVICE 3837-E (U 338-E) -5- August 2, 2018 This advice letter will not increase any rate or charge, cause the withdrawal of service, or conflict with any other schedule or rule. TIER DESIGNATION Pursuant to General Order (GO) 96-B, Energy Industry Rule 5.1, this advice letter is submitted with a Tier 1 designation. NOTICE In accordance with GO 96-B, General Rule 6.2, this information-only advice letter is not subject to protest. In accordance with General Rule 4 of GO 96-B, SCE is serving copies of this advice letter to the interested parties shown on the attached GO 96-B service list. Address change requests to the GO 96-B service list should be directed by electronic mail to or at (626) 302-3719. For changes to all other service lists, please contact the Commission’s Process Office at (415) 703-2021 or by electronic mail at Further, in accordance with Public Utilities Code Section 491, notice to the public is hereby given by submitting and keeping the advice letter at SCE’s corporate headquarters. To view other SCE advice letters submitted with the Commission, log on to SCE’s web site at For questions, please contact Reuben Behlihomji at (626) 302-6444 or by electronic mail at Southern California Edison Company /s/ Gary A. Stern Gary A. Stern, Ph.D. GAS:rb:cm Enclosures
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CALIFORNIA PUBLIC UTILITIES COMMISSION ADVICE LETTER SUMMARY ENERGY UTILITY MUST BE COMPLETED BY UTILITY (Attach additional pages as needed) Company name/CPUC Utility No.: Southern California Edison Company (U 338-E) Utility type: Contact Person: Darrah Morgan  ELC  GAS  PLC  HEAT Phone #: (626) 302-2086  WATER E-mail: E-mail Disposition Notice to: EXPLANATION OF UTILITY TYPE ELC = Electric PLC = Pipeline GAS = Gas HEAT = Heat Advice Letter (AL) #: Subject of AL: (Date Submitted/ Received Stamp by CPUC) WATER = Water 3837-E Tier Designation: 1 Information Only Advice Letter - Informational Overview of the Retail Automated Transactive Energy System Pilot Keywords (choose from CPUC listing): Compliance AL type:  Monthly  Quarterly  Annual  One-Time  Other If AL submitted in compliance with a Commission order, indicate relevant Decision/Resolution #: Does AL replace a withdrawn or rejected AL? If so, identify the prior AL: Summarize differences between the AL and the prior withdrawn or rejected AL: Confidential treatment requested?  Yes  No If yes, specification of confidential information: Confidential information will be made available to appropriate parties who execute a nondisclosure agreement. Name and contact information to request nondisclosure agreement/access to confidential information: Resolution Required?  Yes  No Requested effective date: N/A No. of tariff sheets: -0- Estimated system annual revenue effect: (%): Estimated system average rate effect (%): When rates are affected by AL, include attachment in AL showing average rate effects on customer classes (residential, small commercial, large C/I, agricultural, lighting). Tariff schedules affected: None Service affected and changes proposed1: Pending advice letters that revise the same tariff sheets: 1 Discuss in AL if more space is needed. None
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All correspondence regarding this AL shall be sent to: CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California 94102 E-mail: Gary A. Stern, Ph.D. Managing Director, State Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, California 91770 Telephone: (626) 302-9645 Facsimile: (626) 302-6396 E-mail: Laura Genao Managing Director, State Regulatory Affairs c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 San Francisco, California 94102 Facsimile: (415) 929-5544 E-mail:
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