Details for: SCE's Protest Response to Advice 4054-E.pdf


Click on the image for full size preview

Document data

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

September 3, 2019
Energy Division
Attention: Tariff Unit
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102

SUBJECT:

Reply of Southern California Edison Company to the Responses
of the California Efficiency + Demand Management Council,
OhmConnect, Inc., and CPower and Enel X North America, Inc. to
Advice 4054-E

Dear Energy Tariff Division Unit:
Pursuant to General Rule 7.4.3 of the California Public Utilities Commission
(Commission or CPUC)’s General Order (GO) 96-B, Southern California Edison
Company (SCE) hereby submits its reply to the responses of the California Efficiency +
Demand Management Council (the Council), OhmConnect, Inc. (OhmConnect), and
CPower and Enel X North America, Inc. (together, the Joint DR Parties) to Advice 4054E, Southern California Edison Company, Pacific Gas and Electric Company,
and San Diego Gas & Electric Company’s Demand Response Auction Mechanism Pilot
for 2020.
I.

Background

On July 12, 2019, the Commission issued D.19-07-009, authorizing a fifth year of the
DRAM pilot with an auction to take place in 2019 for deliveries between June 2020 and
December 2020 (2020 DRAM), as well as annual auctions for deliveries in 2021, 2022,
and 2023. The Commission ordered the IOUs to implement eight improvements for the
2020 DRAM and to submit an advice letter by August 12, 2019, addressing all contract
improvements and RFO guidelines. The IOUs complied with this requirement by
submitting Advice 4054-E on August 12, 2019. On August 26, 2019 the Council and
OhmConnect submitted their Responses to Advice 4054-E pursuant to the shortened
response period directed by the Commission’s Energy Division as described in SCE’s
email dated August 16, 2019. On August 27, 2019, the Joint DR Parties submitted their
Response to Advice 4054-E. SCE hereby submits its reply to these responses in

P.O. Box 800

8631 Rush Street

Rosemead, California 91770

(626) 302-9645

Fax (626) 302-6396





- Page 1 -

Energy Division California Public Utilities Commission September 3, 2019 Page 2 accordance with the shortened time period directed by the Commission’s Energy Division.1 II. SCE’s Reply to Responses A. SCE’s Proposed Qualitative Criteria Are Appropriate In AL 4054-E, SCE proposed to change two of its qualitative criteria for evaluating bids with the focus on prior DRAM performance.2 Specifically, SCE proposed to implement bands related to the Seller’s prior MW delivery performance in the DRAM such that delivering, in aggregate, between 100 and 75 percent of contracted capacity would result in a 10 percent assessed increase in cost for bid evaluation purposes. Further, delivering between 75 and 50 percent will result in a 25 percent assessed increase, and delivering less than 50 percent will result in a 50 percent assessed increase in cost.3 In its Response, the Council states that SCE’s revised criteria are excessive and unreasonable.4 OhmConnect likewise objects to the use of SCE’s proposed criteria and argues that the IOUs should use the same criteria and weightings as in the most recent DRAM solicitations.5 Implementing a qualitative performance criterion is appropriate given that some DRAM resources have consistently under-delivered their contracted capacity (in some instances by a significant amount). The DRAM is in its fourth year as a pilot with an authorized statewide budget of $63 million. This is sufficient time and budget to allow improvements in DRAM performance. However, according to independent analysis, performance is instead declining.6 According to a report from the CAISO’s Department of Market Monitoring 2018 Annual Report on Market Issues and Performance (CAISO DMM Report), in 2018 most demand response providers (DRP) received a waiver to maintain the 1-6pm Availability Assessment Hours (AAH), with DRPs that did not receive the waiver required to perform in the 4-9pm AAH window. The chart presented below, which comes from the CAISO DMM Report, shows that the 4-9pm AAH resources performed at or near zero percent of their Supply Plan quantity.7 This is an See August 22, 2019 e-mail from Simon Baker on behalf of Edward Randolph, Director, Energy Division to Service List for A.17-01-012 et. al., and G.O. 96-B Service Lists for SCE, PG&E and SDG&E. 2 The two criteria are substantially the same, but one reflects prior performance in 2017 DRAM deliveries while the other reflects prior performance in the 2018 and 2018-2019 DRAM deliveries. 3 AL 4054-E, p. 8. 4 Response of the Council, p. 2. 5 Response of OhmConnect, p. 3. 6 For instance, the September and October 2019 DRAM Supply Plan MW are only 53% of the Contracted MW for those months. 7 CAISO DMM Report, p. 45, available at http://www.caiso.com/Documents/2018AnnualReportonMarketIssuesandPerformance.pdf. The DMM report also noted that some DRPs have continued to overstate supply plans and 1
- Page 2 -

Energy Division California Public Utilities Commission September 3, 2019 Page 3 issue that can impact system reliability, and negatively impacts DRP providers that have been responsible actors, and should be remedied. The Council argues that penalizing prior performance for less than 100% delivery of contract capacity is inconsistent with the Demonstrated Capacity penalty structure adopted in D.19-07-009.8 Similarly, OhmConnect argues that “coincident peak load” is inappropriate for prior performance because it does not align with the Commissionadopted guidelines for measuring demonstrated capacity of DRAM resources.9 To be clear, “coincident peak load” means the peak performance of a particular DRAM resource at a single point in time. This is an appropriate measurement because DRAM is a capacity product - meaning that only the capacity of the product at a single point in time is relevant to measuring the amount of product - and, therefore, only has value when measured at a single point in time. Other measurements take many points in time, throughout a given month (or even greater period of time) and collect them together to arrive at a cumulative total. However, such measurements are inappropriate because they give credit for performance at times other than when the capacity is needed for grid reliability. Any measure that aggregates multiple periods of time eviscerates the invoices, leading to customer funds being allocated to expensive resources that have performed poorly. See CAISO DMM Report, p. 27: “While the total amount of registered capacity and energy bids from demand response increased significantly between 2017 and 2018, the additional proxy demand response capacity was primarily offered into the day-ahead market at bid prices over $750/MWh and into the real-time market near the $1,000/MWh bid cap. See also CAISO DMM Report, p. 42: The incremental bid capacity in 2018 was from both supply plan and non-supply plan resources. The majority of demand response capacity remained concentrated at the top of the resource supply stack and was infrequently dispatched in the day-ahead and real-time markets.” 8 Response of the Council, p. 2. 9 Response of OhmConnect, pp. 3-4.
- Page 3 -

Energy Division California Public Utilities Commission September 3, 2019 Page 4 capacity measurement of the DRAM product and, therefore, negates the reliability value. In addition, the Demonstrated Capacity penalty and prior performance qualitative criteria structures serve different purposes. The DC penalty structure was adopted to determine the calculation of payments to the Seller based on monthly performance after they have signed a DRAM contract, whereas SCE’s qualitative criteria are assessed at the RFO stage to determine the competitiveness of a potential Seller’s bid. It is appropriate to hold existing DRAM Sellers to a high standard for their prior performance under a DRAM contract when determining whether they should receive further DRAM contracts, to ensure the reliability objective of the program is achieved and to prudently protect ratepayer investment. The Council’s argument that SCE’s proposed criteria are “in contravention of the intent of the DRAM, which is to encourage new entrants”10 is misplaced; DRAM will only be successful if all Sellers, both historical and potential new entrants contract to provide resources that are physically available and then deliver the contracted-for load reduction when those resources are needed by the grid. DRAM is a procurement mechanism and SCE’s proposed criteria align with the Commission’s desire to improve accuracy and performance and deter undesired market behavior.11 SCE’s proposed qualitative criteria support a competitive and reliable DRAM by giving preference to viable Sellers that have shown they can deliver on their commitments. The Council also proposes that all changes to qualitative criteria be approved by the Commission prior to being used in bid evaluation. As SCE and PG&E proposed in the DRAM Working Group report12 and as all three IOUs described in their comments on that report,13 DRAM procurement should use the least-cost best-fit (LCBF) methodology. As the “best-fit” part of the LCBF methodology, it is important that qualitative criteria be used in a manner similar to other procurement processes as part of eliminating carve-outs and supporting DRAM as a competitive procurement mechanism. Under the LCBF methodology, the IOUs retain the flexibility to design the qualitative criteria and that process does not require the Commission to approve all qualitative criteria prior to use. DRAM appears to be the exception, without good reason to continue as such. For this reason, the Commission should reject the Council’s proposal to approve all qualitative criteria prior to use. The Commission should also reject OhmConnect’s proposal that the same language on qualitative criteria that was approved for the DRAM III and IV RFOs be used going forward,14 because it is clear that those qualitative criteria were not sufficient to ensure that IOUs procured a reliable DRAM product. Response of the Council, p. 2. D.19-07-009, p. 59. 12 DRAM Working Group Report, filed August 9, 2019, p. 34. 13 SCE Comments, filed August 23, 2019, pp. 7-8; PG&E Comments, filed August 23, 2019, pp. 4-5; SDG&E Comments, filed August 23, 2019, p. 4. 14 Response of OhmConnect, p. 3. 10 11
- Page 4 -

Energy Division California Public Utilities Commission September 3, 2019 Page 5 B. The Mediation and Arbitration Clauses in SCE’s DRAM Pro Forma Appropriately Differ from PG&E and SDG&E’s In its Response, OhmConnect recommends that SCE adopt the timelines for Mediation and Arbitration described in PG&E and SDG&E’s 2019 DRAM Purchase Agreements.15 The rationale given for this change is “to create consistency across the three IOUs and to reduce the length of time a dispute might occur.”16 While consistency may be generally beneficial, there is also room for variation between the IOUs to provide flexibility to the Buyers and Sellers. In past DRAM years, SCE’s contract has differed from the other two IOUs on this matter, as pointed out by OhmConnect, and this variance has been allowed by the Commission. There has been no record built as to why SCE should align exactly with the other IOUs now, except for a vague appeal to “consistency.” As also pointed out by OhmConnect, SCE has revised its DRAM pro forma contract to adopt the language used by the other two IOUs in the Negotiation section. SCE found this to be an appropriate change to make but does not find the same to be true with the Mediation and Arbitration sections. Based on SCE’s experience with the mediation and arbitration process for energy contracts, including non-DRAM energy contracts, the timelines in SCE’s pro forma DRAM contract are appropriate, and may even be too short. In addition, the timelines in the DRAM pro forma contract are maximum timelines, and a dispute may be resolved faster than provided for by the timelines. For these reasons, SCE recommends the Commission deny OhmConnect’s proposal and grant SCE the flexibility to use the dispute resolution timelines that it has used in past DRAM contracts. If, however, the Commission decides that the Mediation and Arbitration timelines should be the same across the IOUs, SCE should be allowed to keep its standard alternative dispute resolution language as reflected in the DRAM pro forma contract submitted with Advice 4054-E and change only the timelines in those sections. SCE’s alternative dispute resolution language is used across all of its energy contracts and the DRAM contract should be consistent in this respect. C. It is Appropriate to Use the Term “Partial Dispatch,” and SCE Clarifies its Use of the Term In their Response the Joint DR Parties state that the use of the term “Partial Dispatch” to refer to a resource not achieving full reduction of load compared to the qualifying capacity (QC), when called upon, is confusing because “Partial Dispatch” refers to a scenario when the CAISO issues dispatch instructions for less than the amount offered. The Joint DR Parties propose that the term referring to performance of the resource relative to QC be renamed to “Partial Performance,” or something similar.17 Id., pp. 4-5. Id., p. 5. 17 Response of the Joint DR Parties, p. 2. 15 16
- Page 5 -

Energy Division California Public Utilities Commission September 3, 2019 Page 6 SCE clarifies that it intends to refer to the CAISO meaning of the term “Partial Dispatch” by using this term, in that a “Partial Dispatch” occurs when a resource ID is dispatched by the CAISO for an amount that is less than the QC of the resource. When a resource is dispatched for its full QC, the DRP must submit those results for Demonstrated Capacity purposes whether or not the resource performed to the full QC. If the resource is dispatched for less than the full QC of the resource, the contract language permits the DRP to choose whether or not to submit those results for Demonstrated Capacity purposes. If the DRP chooses to submit them, the amount submitted will be compared against the QC for the entire resource for deriving the DC-QC ratio used for payment purposes--the DRP is not allowed to “scale up” performance to try to estimate possible results as if the whole resource had been dispatched. Failure to perform at a full market dispatch of a Resource ID should not be considered a partial dispatch. Under the Joint Respondents’ interpretation, a “partial dispatch” would include a DRP’s failure to deliver what the market required of the resource (that is, failure to perform at QC when the entire resource has been dispatched) – which is different than complete performance of a “Partial Dispatch” by the CAISO, in which the resource would be succeeding in delivering what the market required of the resource (though the amount required was less than the QC of the entire resource). The language proposed by the Joint Respondents would provide the DRP with a second opportunity to perform to its QC by testing after an unsuccessful dispatch, rendering meaningless the actual performance of the resource during a market dispatch and disrupting the process outlined in Section 1.6 of the DRAM pro forma contract. SCE recognizes that the proposed contract language may have caused some confusion  and that a Partial Dispatch can still achieve the full reduction of load equal to the qualifying capacity when the bid quantity is greater than the QC on the Supply Plan. To address this, SCE provides proposed edits to Section 1.6 of the DRAM pro forma contract in Attachment A to this Reply. These proposed edits clarify that a “Partial Dispatch” means a dispatch by the CAISO for less than 100% of the Qualifying Capacity of the applicable PDR. D. It is Appropriate to Maintain the Requirement for Sellers to Notify Buyers of the Customer Mix of their Proxy Demand Resources In its Response, OhmConnect proposes that the IOUs be required to delete Section 1.4(a)(ii), which requires Sellers to confirm to the Buyer in writing that each PDR identified by the Seller is comprised of solely Bundled Service Customers or Unbundled Service Customers. As rationale for their proposal, OhmConnect states that the phrasing is not clear as to whether the PDR is allowed to have a mix of Bundled and Unbundled Customers, but not a third type of customer, or whether each PDR must be only Bundled Customers or only Unbundled Customers. OhmConnect also states that this requirement goes beyond what CAISO requires for a PDR. As to OhmConnect’s first objection, SCE confirms that the second interpretation is correct, that each PDR must be comprised of only Bundled Customers or only Unbundled Customers. This
- Page 6 -

Energy Division California Public Utilities Commission September 3, 2019 Page 7 section of the DRAM pro forma contract has not changed from previous years. As to OhmConnect’s second objection, the purpose for this requirement has nothing to do with the CAISO’s processes, rather, it is used to determine whether Rule 24 applies to a particular DRP, as Rule 24 applies to DRPs serving Bundled Customers but not DRPs serving only Unbundled Customers.18 SCE needs to know what type of customers a particular DRP is serving so that it can fulfill its responsibilities under Rule 24. For these reasons, it is appropriate to preserve Section 1.4(a)(ii) of the DRAM pro forma contract. E. Language Allowing a Service Account to be Counted in Only One PDR is Accurate In their separate Responses, the Council and OhmConnect both express concerns over ambiguity in the language prohibiting counting the performance of a service account that moves between DRAM PDRs in more than one PDR for the month.19 SCE does not see any ambiguity, however, given the apparent confusion SCE will adopt the language proposed by OhmConnect.20 F. It is Appropriate to Use the Term “Dispatch Instruction” In its Response, OhmConnect states that the term “Dispatch Instruction” is defined ambiguously in the DRAM pro forma contract and that the phrase “during all of the hours referenced in the Dispatch Instruction corresponding to the applicable Availability Assessment Hours” should be deleted from Section 1.6(a)(i).21 OhmConnect’s rationale is that “Dispatch Instruction” is defined only as having the definition in the CAISO Tariff, and that dispatch instructions come from the CAISO in varying lengths of time. Removing this phrase is not appropriate as DRAM participants are required to comply with the CAISO Tariff, including its definition of “Dispatch Instruction.” OhmConnect singles out the term “Dispatch Instruction” as being defined “ambiguously” because it uses the definition in the CAISO Tariff, yet many of the definitions in the DRAM pro forma contract refer to having the meaning in the CAISO Tariff, such as Bid, Demand Response Provider, Day-Ahead Schedule, Distributed Energy Resource Aggregation, Proxy Demand Resource, and Resource ID. OhmConnect makes no reference to the ambiguity of these other definitions. In addition, the Dispatch Instruction language has the effect of requiring DRAM Sellers to dispatch DRAM resources that receive market awards. This requirement should not be removed. 18 See SCE’s Rule 24, Section A, “Applicability.” Available at https://library.sce.com/content/dam/scedoclib/public/regulatory/tariff/electric/rules/ELECTRIC_RULES_24.pdf. 19 Response of the Council, pp. 3-4; Response of OhmConnect, p. 7. 20 OhmConnect’s proposed language is as follows: “Seller shall only include the performance of any DRAM Resource Customer service account that was moved in a Showing Month pursuant to Section 3.4(d) in one PDR for purposes of the calculation of Demonstrated Capacity for such Showing Month.” 21 Response of OhmConnect, pp. 5-6.
- Page 7 -

Energy Division California Public Utilities Commission September 3, 2019 Page 8 G. The DRAM Pro Forma Already Allows Sellers to Provide Supply Plans 15 Days Before Buyer’s Compliance Filings In its Response, the Joint DR Parties state that Paragraph 3.1(a)(i) of the DRAM pro forma contract requires the Seller to submit the supply plan for the full year or monthly showing either 15 calendar days before the Buyer’s supply plan filing is due, if they choose to use the Exhibit D format, or 15 business days before the Buyer’s supply plan filing is due, if they choose not to use the Exhibit D format. The Joint DR Parties argue that, to avoid confusion, this paragraph should be revised so that Seller supply plans may be submitted to the Buyer 15 calendar days before the Buyer must submit its supply plans.22 However, this is already the case. The 15 calendar day requirement refers to when the Seller submits its supply plan to the Buyer in a format similar to Exhibit D of the DRAM pro forma contract. On the other hand, the Seller may choose to exercise the option to utilize the 15 business day requirement by using a format not substantially similar to Exhibit D. This method provides a compromise that allows for greater flexibility by allowing a choice for Sellers and ensuring the Buyers have sufficient time to process the Seller’s supply plan (15 calendar days for those using the agreed-upon form; 15 business days for those using their own form). The proposal of the Joint DR Parties seeks the benefits of this flexibility without the responsibility of using an agreed-upon form. The pro forma already provides Sellers the flexibility they seek by allowing for a Seller’s supply plan to be provided 15 calendar days before the Buyer’s supply plans, and no revision is necessary to this section. H. It is Appropriate to Strike Section 1.5(b) In its Response, OhmConnect objects to the removal of Section 1.5(b), which allows a DRAM Seller to reduce its Product Monthly Quantity if there are insufficient Rule 24 registrations. As rationale, OhmConnect states that (1) a Commission statement that Rule 24 registrations should not limit DRAM procurement does not apply because Section 1.5(b) has to do with delivery, not procurement; (2) although current Rule 24 registration trends do not indicate a potential shortage, trends can change rapidly; and, (3) that the existence of Section 1.5(b) shows that the remaining clauses are insufficient to protect Sellers. First, the DRAM pro forma did not propose to strike Section 1.5(b), but only one clause of that section that refers to insufficient Rule 24 registrations being a valid reason for a Seller to reduce its Product Monthly Quantity.23 SCE assumes that OhmConnect is referring to that phrase alone and responds accordingly. The phrase stricken from Section 1.5(b) referred to “insufficient Rule 24 registrations under D.16-06-008 22 23 Response of the Joint Respondents, p. 3. See AL 4054-E, Attachment B, 2020 DRAM Purchase Agreement, redline version, at p. 4.
- Page 8 -

Energy Division California Public Utilities Commission September 3, 2019 Page 9 Ordering Paragraph 6,” which gave SCE funding to support up to 42,000 Rule 24 registrations. However, the Commission has since authorized funding for SCE to support up to 100,000 registrations, and so this phrase in Section 1.5(b) is out of date. It is also the case that SCE has only filled approximately 1/3 of the allotted registrations at this point. Although trends can change, as noted by OhmConnect, it is difficult to see the number of Rule 24 registrations approaching 100,000 in the near future, given that the DRAM budgets will remain flat for the next four years. In the event that registrations do begin to approach the 100,000-mark, SCE has the ability to file an application to request funding to support additional registrations. In addition, the first phrase of Section 1.5(a) allows Sellers to reduce Product Monthly Quantity if they are unable to register the DRAM resource “due solely to the actions or inactions of Buyer or the CAISO…”24 This language is broader than the stricken language and would cover a shortage in Rule 24 registrations. Therefore, the Seller is not harmed by striking of this phrase. For these reasons, SCE recommends the Commission reject OhmConnect’s proposal to reverse the striking of the phrase concerning Rule 24 registrations from Section 1.5(b) of the DRAM pro forma contract. I. It is Appropriate for Buyers to Draw Upon Performance Assurance In its Response, the Council recommends that the IOUs withdraw a change made to Section 5.5(a) regarding administration of Performance Assurance. The Council states that allowing an IOU to draw upon Performance Assurance in the event of outstanding unpaid amounts owed from Seller to Buyer is not well-defined and will negatively impact Sellers’ ability to secure financing.25 The proposed language clarifies the Performance Assurance language from previous DRAM RFOs. It is logical that, if a Seller owes money to the Buyer, and the Buyer is holding Performance Assurance for that Seller, the Buyer would use the Performance Assurance to cover the amount owed. That is how security deposits work. While SCE understands that there are concerns, how these concerns would impact a Seller’s ability to secure financing are unstated, unclear, and unspecific. Meanwhile, experience has shown that the current performance assurance language is insufficient to ensure that a Seller’s performance assurance may be used for its intended purpose as a security deposit. Therefore, simply withdrawing this change will still leave Buyers without sufficient recourse without any demonstrated benefit to Sellers, their financiers, or the ratepayers. J. SCE Recognizes the Error in Section 7.2(b)(v)(B) OhmConnect states that there is an error in Section 7.2(b)(v)(B) that points to the 24 Id. 25 Response of the Council, p. 3.
- Page 9 -

Energy Division California Public Utilities Commission September 3, 2019 Page 10 incorrect conditions.26 SCE recognizes that this is an error and will make the proposed change. V. Conclusion SCE appreciates the opportunity to submit this reply to Protests of Advice 4054-E. Sincerely, /s/ Gary A. Stern, Ph.D. Gary A. Stern, Ph.D. GAS:ng/rm:jm cc: Edward Randolph, Director, CPUC Dorothy Duda, CPUC Energy Division Sara Steck Myers, CPower and Enel X John Anderson, OhmConnect, Inc. Greg Wikler, California Efficiency + Demand Management Council Service List A.17-01-012 et al. 26 Response of OhmConnect, p. 7.
- Page 10 -

Energy Division California Public Utilities Commission September 3, 2019 Page 11 ATTACHMENT A
- Page 11 -

Energy Division California Public Utilities Commission September 3, 2019 Page 12 Proposed Edits to Section 1.6(a) to Clarify Use of the Term “Partial Dispatch” 1.6. Demonstrated Capacity (a) Each invoice submitted by Seller to Buyer pursuant to Section 4.2 shall include a statement, in a form substantially similar to Exhibit C, of the amount of the Qualifying Capacity for each type of Product for such Showing Month that Seller was capable of delivering (“Demonstrated Capacity”), utilizing the results from one of the following methods, as provided below (subject to the additional restrictions set forth in Section 1.6(b)). (i) The results of a DC Dispatch of the applicable PDR in the DRAM Resource during the Showing Month, provided that the PDR provided load reduction during all of the hours referenced in the Dispatch Instruction corresponding to the applicable Availability Assessment Hours. The Demonstrated Capacity for System and Local Capacity will equal the maximum hourly load reduction during any hour of such DC Dispatch as calculated using the Capacity Baseline; provided that, for the Showing Month of August, the Demonstrated Capacity for System and Local Capacity will equal the average hourly load reduction during any two (2) consecutive hours as calculated using the Capacity Baseline. The Demonstrated Capacity for Flexible Capacity will equal the average hourly load reduction during any hour of such DC Dispatch as calculated using the Capacity Baseline; provided that, for the Showing Month of August, the Demonstrated Capacity for Flexible Capacity will equal the average hourly load reduction during any two (2) consecutive hours as calculated using the Capacity Baseline. If the CAISO issues a dispatch instruction for Seller submits the results of a DC Dispatch for less than one hundred percent (100%) of the Qualifying Capacity of the applicable PDR (a “Partial Dispatch”), Seller may elect to submit the results of such Partial Dispatch for its Demonstrated Capacity showing (in which event, the resulting load reduction resulting from such Partial Dispatch will still be compared to the Qualifying Capacity of the entire PDR for purposes of deriving the DC-QC ratio of the DR Resource in accordance with Section 4.1). (ii) In the event that the CAISO does not dispatch there is no DC Dispatch of the PDR in the DRAM Resource for one hundred percent (100%) of the its Qualifying Capacity of during the applicable Showing Month, and if Seller does not submit the results of a Partial Dispatch during the Showing Month as contemplated under 1.6(a)(i) above, the results of a DC Test. The Demonstrated Capacity for System and Local Capacity will equal the maximum hourly load reduction during any hour of such DC Test as calculated using the Capacity Baseline; provided that, for the Showing Month of August the Demonstrated Capacity for System and Local Capacity will equal the average hourly load reduction during any two (2) consecutive hours as calculated using the Capacity Baseline. The Demonstrated Capacity for Flexible Capacity will equal the average hourly load reduction during any hour of such DC
- Page 12 -

Energy Division California Public Utilities Commission September 3, 2019 Page 13 Test as calculated using the Capacity Baseline; provided that, for the Showing Month of August the Demonstrated Capacity for Flexible Capacity will equal the average hourly load reduction during any two (2) consecutive hours as calculated using the Capacity Baseline. (iii) In the event the CAISO does not dispatch the that there is no DC Dispatch of the PDR in the DRAM Resource during the Showing Month for one hundred percent (100%) of its the Qualifying Capacity during of the applicable Showing Month, if Seller does not submit the results of a Partial Dispatch as contemplated under 1.6(a)(i) above, and there is no DC Test of the PDR in the DRAM Resource during the Showing Month as contemplated under 1.6(a)(ii) above, the Demonstrated Capacity will equal the average amount of capacity for such PDR in the DRAM Resource that the Seller bid into the applicable CAISO Markets solely during the Availability Assessment Hours of the Showing Month in compliance with the CAISO MOO.
- Page 13 -