Details for: SDG&E Reply to Joint Parties Protest - SDG&E Advice Letter 3522-E.pdf

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Clay Faber - Director
Regulatory Affairs
8330 Century Park
Court San Diego, CA
Tel: 858-654-3563

May 19, 2020
Energy Division Tariff Unit
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, California 94102


Reply of San Diego Gas & Electric Company to Protest of California Efficiency +
Demand Management Council, CPower, Enel X North America, Inc., and
Ohmconnect, Inc. to San Diego Gas & Electric Company Advice Letter 3522-E
(Demand Response 2018-2022 Mid-Cycle Review)

In accordance with Section 7.4.3 of General Order 96-B, San Diego Gas & Electric Company
(SDG&E) hereby replies to the Protest filed by California Efficiency + Demand Management
Council, CPower, Enel X North America, and OhmConnect, Inc. (collectively, the Joint Parties),
to SDG&E Advice Letter (AL) 3522-E (Demand Response 2018-2022 Mid-Cycle Review).
On March 27, 2020 1, SDG&E submitted Tier 3 AL 3522-E in compliance with Decision (D.) 1609-056 Ordering Paragraph (OP) 9 to provide a mid-cycle review of its Demand Response (DR)
2018-2022 Program Cycle. SDG&E received the Joint Parties protest on May 5, 2020. 2
SDG&E’s Reply to Sections I and IV of The Joint Parties’ Protest of SDG&E AL 3522-E 3

Issues Common to the IOUs’ Advice Letters
A. Exclusion of PSPS Events from DR Program Baselines

SDG&E’s mid-cycle review provided only necessary changes to the program(s). SDG&E agrees
that it would be reasonable to exclude PSPS events from baseline calculations (for CBP) and
incentive calculations (for BIP), but SDG&E’s systems are not currently programmed to omit
PSPS events in these calculations. It would be difficult and potentially costly to make these
incremental changes. SDG&E does not believe that the benefits would outweigh the costs of

The Joint Parties Protest states SDG&E AL 3522-E was submitted on April 1, 2020. However, SDG&E AL
was submitted March 27, 2020.
On April 12, 2020, the California Public Utilities Commission (Commission) extended the protest period for
this Advice Letter from April 15, 2020 to May 5, 2020. On May 8, 2020, the Commission extended the
deadline for SDG&E, Pacific Gas & Electric Company and Southern California Edison Company to reply to
protests to May 19, 2020.
SDG&E does not take any position with respect to the comments regarding AL 5799-E (Pacific Gas and
Electric) or AL 4182-E (Southern California Edison).


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Public Utilities Commission May 19, 2020 implementing these changes. Furthermore, such system changes and testing were not budgeted for these incremental changes and would need to be requested after the implementation and stabilization of SDG&E Customer Information System replacement program in early 2021. B. Assessment of a 5-in-10 Baseline for Non-Residential CBP Customers Reply: The Joint Parties “protest” the IOU’s mid-cycle filing on the grounds that it fails to evaluate the 5in-10 baseline for non-res customers. However, according with D.19-07-009 (“Decision Addressing Auction Mechanism, Baselines, and Auto Demand Response for Battery Storage”), Ordering Paragraph 18 (page 113) states that: “…18. Pacific Gas and Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company (the Utilities) shall include a proposal in their 2020 demand response portfolio mid-cycle advice letter filing, for implementing the 5-in-10 baseline for residential customers, with a 40 percent cap. The proposal shall include estimated costs, statistics about the accuracy of the aggregate and individual baseline, an assessment of the benefits for using the baseline, and a timeline. Following a qualitative assessment, if the implementation costs are less than the benefits of the improved baseline, Energy Division is authorized to recommend adoption in the resolution addressing the mid-cycle review” (emphasis added). The protest is misplaced as 5-in-10 for non-res customers is beyond the scope of the filing. CPUC instructed (in D.19-07-009 at OP 18) the IOUs to analyze the 5-in-10 for residential customers, not both res and non-res customers. In the Baseline Analysis Working Group report prepared by Nexant (November 20th, 2017) recommended that 10 in10 baseline for non-residential customer with a 20% cap for weekday is a better option than 5 in10 baseline option. Finally, the wholesale settlement is currently using the 10 in 10 baseline option for nonresidential customers. C. Leveling the Competitive Playing Field between IOU and Third-Party DR Programs Reply: The Joint Parties request that the utilities provide website statistics is not in scope of the Mid Cycle Review Process and should be considered as part of the 2023 - 2027 DR Funding Application. None of the IOUs have approved funding for handling this type of request. Links and the names of the approved third-party DR Providers are already available for customers to see and contact if they wish. It is the responsibility of the third-parties to operate independently from the utilities and to market their own programs. The Joint Parties state that the process in which third-parties apply for the SDG&E technology deployment program is confusing to customers and propose that a workshop be held on this issue. SDG&E does not oppose a workshop, however, we caution that the CPUC requirement that customers receive the upfront incentives from the utilities but ongoing payment from thirdparties is inherently complicated. Details specific to the SDG&E enrollment process are included in the additional issues section below. 2
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Public Utilities Commission D. Aggregator Eligibility for Technology Incentives May 19, 2020 Reply: In the past, SDG&E in its Technology Incentive Program (TI) did allow a pass through of the incentive payment from the customer to a third-party. The third-party contractor was aware that the final 40% payment was based solely upon the customer’s program performance. Unfortunately, in many cases the customer didn’t perform as expected; and in the cases where the incentive was a pass through, many of the third-parties, weren’t completely compensated for their work. Because many of the third-parties ended up losing money, they eventually withdrew completely from participation in the TI program. In 2017, the Commission ordered in (D.16-06-029) that the IOU’s were to lower the incentive to $200/kW, pay up to 75% of total project cost and continue to utilize a 60/40 payment split. As part of SDGE’s revised program terms and conditions, SDGE would no longer facilitate direct third-party payments. This way the third-party is protected and is no longer at risk for nonperformance by the customer. How the customer pays the contractor for their services/equipment is between them. SDG&E only pays the customer the program incentive. Since SDG&E has made these changes, we have seen contractors and customers come back to participate in the program as reported in the MCR. As for SDG&E’s residential technology deployment program (TD) customers, the statements made by the Joint Parties about the large number of residential customers who canceled their applications are incorrect. All of these “canceled” applications were canceled by SDG&E because the customer was ineligible. Customers did not cancel their own applications due to difficulties with the application process. The application process for residential customers is simple and effective. Customers login to their thermostat account online and apply to the program through manufacturer website. Also for customers that want the incentive but participate in an eligible third-party program, SDG&E sends a customized welcome e-mail to customers of third-parties explaining that they will receive a $50 incentive from SDG&E, but that they will continue to participate with their thirdparty and that any ongoing incentives will come from their third-party. We also mention that third-party customers are eligible on our marketplace website. The policy of paying the customers directly was also affirmed in D.18-11-029, OP 6. . E. The IOUs Should Pilot Shift, Shimmy and Shape Programs Reply: The Joint Parties mentioned the IOUs should develop pilots to test the type of DR products envisioned by the March 2017, 2025 California Demand Response Potential DR Potential Study. SDG&E agrees new pilots should be tested, however this is out of scope for the mid-cycle review and would require a Commission decision and additional funding. IV. SDGE A. CBP i. Adopt CBP Elect with Hourly Bids. Reply: The Joint Parties state in their replies: “[a]s PG&E has indicated, there is significant customer interest in this option…” referring to the CBP Elect product offered by PG&E. SDG&E’s CBP Program Advisor appreciates the suggestions to improve the program, however, does not have data to support whetherSDG&E’s CBP Elect will also significantly have the same customer interest in its territory. SDG&E in the AL 3522-E made proposals for necessary changes to CBP. Additionally, SDG&E’s Customer Information System replacement program (new CIS) was approved in D.18-08-008. As part of the CIS replacement program schedule, SDG&E will require 3
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Public Utilities Commission May 19, 2020 a one-year CIS “freeze period” in 2020 to reduce the overall risks and customer impact during the transition to the new system. During the freeze period, structural changes to the legacy CIS systems will be deferred until the new CIS is implemented and stabilized, which is expected in early 2021. The system freeze impacts any CBP systems changes. ii. Remove DRAM-related Eligibility Requirements. Reply: The CBP tariff mentions DRAM-related Eligibility Requirements along with Resolution E-4728. While SDG&E agrees with removing this requirement that was put in place in 2015 and believes it is no longer a requirement because it referred to DRAM pilot, SDG&E only filed necessary changes to CBP in the mid-cycle review AL 3522-E and did not believe cleanup items to be considered necessary at this time. iii. Transition Residential CBP Pilot Directly to Full Program Reply: SDG&E was ordered in D.17-12-003 OP22 to propose a one-year residential CBP Pilot. The budget was capped at $708,000 for the one-year pilot including administration and incentive. SDG&E complied with the ordering paragraph by including the proposal in AL 3522-E. SDG&E believes it to be premature to transition into a full program or extend into 2022 until we receive data from participation from our customers and aggregators. The system enhancements required to accept residential customers will be significant and as mentioned above the CIS replacement program prevents changes to legacy systems until after stabilization. In addition, the budget of $708,000 would need to be increased to support the significant changes necessary for full program implementation and could only happen after CIS replacement. B. AC Saver Reply: We did not find any issues for AC Saver DO or DA that require a response. C. Technology Deployment Program i. Replacing Customer Incentive with Bill Credit Reply: SDG&E’s customer incentives for the commercial thermostat program currently provides an incentive check. The reality with this program is that customers complete the application and then fail to complete the remainder of the steps required to send checks, thus missing out on receiving their incentives. The process of preparing checks must include receiving a W-9 from the customer and verifying it. Most of the time the customer does not return the W-9 and foregoes receiving the rebate check. SDG&E’s goal is to improve the process, streamline the steps and help customers receive their rebates quickly. SDG&E believes bill credits fulfill this goal and is in the best interest of the customers. SDG&E should continue to have the flexibility we currently have to issue customer incentives using the method of our choosing. ii. Additional Proposed Changes. Reply: The Joint Parties comment that the process by which customers enroll through SDG&E to receive the $50 TD thermostat incentive for customers enrolled in third-party program is confusing to customers. SDG&E shares the Joint Parties’ goal to make the TD enrollment process clear to customers but the specific suggestions proposed by the Joint Parties are not feasible. As the Joint Parties state, SDG&E has a landing page which explains how the TD program 4
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Public Utilities Commission May 19, 2020 works for both SDG&E AC Saver customer and customers of third-parties. The webpage then directs applicants to the Google-Nest and ecobee webpages because these manufacturers have the ability to instantly verify that a thermostat is installed and online. SDG&E discussed the possibility of a separate thermostat verification portal for third party applicants with both GoogleNest and ecobee, but both companies stated that they do not provide this type of service. . Google-Nest uses the term Rush Hour Rewards on its enrollment sites on a national basis for all its utility partners so that is not a customizable feature of their platform. SDG&E has undertaken reasonable efforts to reduce the confusion. In additional to the launch page, SDG&E does send a customized welcome e-mail to customers of third-parties explaining that the will receive $50 from SDG&E but that the customer will continue to participate with their third-party and that any ongoing incentives will come from their third-party. We also mention that third-party customers are eligible on our marketplace website. SDG&E believes that the best long-term solution to this issue would be to have the third-parties provide any upfront enrollment or technology incentives to their own customers directly. In order to do this the third-parties could submit a DRAM bid high enough to cover the incentive costs. This way the customers would be applying for both the enrollment/technology incentive and participation incentive through the third-party which would eliminate the confusion caused by the current split payment method. It would also ensure the DRAM bids from third-party providers can be compared on an apples to apples basis, instead of the awkward hybrid model of receiving one incentive from SDG&E and the other from their third-party. We recognize that moving to the model is out of scope of the mid-cycle advice letter, but we believe it is the conceptually appropriate process. Conclusion For all the foregoing reasons, SDG&E respectfully requests that SDG&E AL 3522-E be approved as submitted on March 27, 2020. Sincerely, /s/ Clay Faber CLAY FABER Director – Regulatory Affairs Cc: A. 17-01-012, et al. Service List. R.13-09-011 Service List 5
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