California Public Utilities Commission
Workshop: CalFUSE Whitepaper & Staff Proposal
Demand Response and Retail Rates Sections | Energy Division
July 21, 2022
California Public Utilities Commission
Workshop Agenda
Time
Agenda Item
9:30
Opening, Logistics, and Safety
– Andrew Magie, Energy Division
9:40
Opening Remarks and Introduction
-
Commissioner Houck
-
Aloke Gupta, Energy Division
10:00
Presentation by Energy Division Staff on Demand Flexibility
Management (CalFUSE) whitepaper/proposal
-
Jean Lamming, Achintya Madduri
12:00
Lunch
1:00
Q&A
– Whitney Richardson, Energy Division
2:00
Break
2:10
Comments, Discussion
– Paul Phillips & Aloke Gupta, Energy Division
3:40
Closing Remarks
– Paul Phillips
4:00
Close Workshop
2
California Public Utilities Commission
Logistics
• Online and morning session will be
recorded
• Today's presentations & recording will
be uploaded onto DR Workshops
website
•Advanced DER and Demand
Flexibility Management Workshop
(ca.gov) (link dropped in chat)
• Hosts (Energy Division Staff)
• Andrew Magie
• Whitney Richardson
• Safety
• Note surroundings
and emergency exits
• Ergonomic check
• Call 9-1-1 or use chat
California Public Utilities Commission
Logistics
4
Mute/ Unmute
Participant List
Chat Audio Options
• All attendees have been muted
• If using the chat, make sure it is sent to “everyone”
• To ask questions, please ‘raise your hand’ and host will unmute you
so you can ask your question. If you would rather type, use the
“Q&A” function (send to “all panelists”)
• Questions will be read aloud by staff; attendees may be unmuted to
respond to the answer. (Reminder: Mute back!)
"Q&A": on the bottom right of
screen, click "3 dots"
California Public Utilities Commission
Ground Rules
• Workshop is structured to stimulate dialogue and engage different perspectives.
• Keep comments friendly and respectful.
• Please use Q&A feature only for questions, or technical issues.
• Please only ask clarifying questions during morning session. Comments and discussion
will be held in afternoon session.
• Do NOT start or respond to sidebar conversations in the Chat.
• Refrain from discussing any matters related to open proceedings while any
Commissioner or their advisors are in attendance.
California Public Utilities Commission
Opening Remarks
Commissioner Houck
July 21, 2022
California Public Utilities Commission
Workshop Introduction
Aloke Gupta, Demand Response Section | Energy Division
July 21, 2022
California Public Utilities Commission
Workshop Scope
• Workshop focused on providing an overview of the recently released* CalFUSE whitepaper
/ staff proposal and seeking feedback
– This workshop is not directly associated with any current or future proceeding
– The information and discussion at this workshop will not be part of any proceeding record
– No written comments are expected on this workshop
• CalFUSE whitepaper recommended:
– “…the CPUC initiate a Rulemaking…
– to take up this paper’s [staff] proposal.”
*Advanced DER and Demand Flexibility Management Workshop (ca.gov), released June 22, 2022.
California Public Utilities Commission
Workshop Scope
• Workshop intended to provide an overview of the recently released CalFUSE whitepaper /
staff proposal and seek feedback
– This workshop is not directly associated with any current or future proceeding
– The information and discussion at the workshop will not be part of any proceeding record
– No written comments expected on this workshop
• CalFUSE whitepaper recommended:
– “…the CPUC initiate a Rulemaking…
– to take up this paper’s [staff] proposal.”
• CPUC voting meeting on July 14, 2022:
– “Order Instituting Rulemaking to Advance Demand Flexibility Through Electric Rates”, voted out 4-0.
• Demand Flexibility Rulemaking (R.22-07-005)*:
– “The Commission anticipates that this proceeding will also consider: …(iii) establishing policies and programs
to advance demand flexibility pursuant to strategies identified in the Demand Flexibility Whitepaper or by a
working group; …”
• The Rulemaking Decision includes a preliminary scoping memo with preliminary issues:
– Opening comments due “Within 30 days of the effective date of this OIR.”
*492688471.PDF (ca.gov)
California Public Utilities Commission
Core Mission
10
Safe
Reliable
Affordable
Clean
California Public Utilities Commission
Key Policy Drivers
Grid Modernization
Emissions
Reduction
Customer Choice &
Equity
Climate
Adaptation
11
California Public Utilities Commission
Key Strategies for Reducing Emissions
De-
carbonized
Power Supply
End Use
Electrification
Demand
Reduction
(EE)
12
California Public Utilities Commission
Key Strategies for Reducing Emissions
De-
carbonized
Power Supply
End Use
Electrification
Demand
Reduction
(EE)
Demand
Flexibility
13
California Public Utilities Commission
CalFUSE Proposal
• Enable widespread adoption of demand flexibility solutions
• Three-part policy framework proposed
– Standardized price access
– Dynamic electricity prices linked to real-time grid conditions & economics
– Customer options to manage and optimize energy usage and bills
*492688471.PDF (ca.gov)
California Public Utilities Commission
Overview: CalFUSE Whitepaper
Energy Division |
➢ Jean Lamming, Demand Response Section
➢ Achintya Madduri, Retail Rates Section
July 21, 2022
California Public Utilities Commission
Executive Summary
Staff Proposal
Pursue joint reforms of DR programs and Rate structures to
Promote Unified Strategies for Demand Management and Grid Optimization to
Achieve widespread adoption of demand flexibility solutions.
Policy Objective: Improve demand-side resource management…
• Through more effective demand response (DR) and retail rate structures,
• That leverage opportunities enabled by long term electrification and DER deployment,
• To better address grid issues associated with the growth of renewables, electrification,
and DER adoption, and support California’s clean energy goals.
California Public Utilities Commission
Anticipated Challenges over the Next Decade
Increasing renewables penetration
• Increased curtailment
• Steeper ramps ➔ reliability challenge
• Increased reliance on intermittent, use-limited supply ➔ reliability challenge
Increasing electrification of end uses (buildings, transportation)
• Increased cost of service due to higher load, if unmanaged
Increasing DER deployment
• Grid instability and increased cost of service, if unmanaged
• Fair compensation and cross-subsidy challenges
California Public Utilities Commission
Opportunity: Growing Demand Flexibility Potential
(2030)
• Doubling of rooftop solar 20 GW
• 3.5x growth in BTM storage 5.5 GWh storage capacity
• Transportation electrification 5M EVs ~ 250 GWh aggregate storage
~ 4x utility storage
• Building decarbonization Growth of smart, flexible end uses
– Smart thermostats/heat pumps,
– Smart electric (heat pump) water heaters
– Smart devices & plugs
• Growth of microgrids and other flexible, emerging end uses
Opportunity or Threat
California Public Utilities Commission
Current Approaches to Achieving Demand Flexibility
• Time-Differentiated Rates (Load Modifying Demand Response)
– Increasing number of special purpose IOU rates: TOU, CPP, EV, SGIP GHG signal …
– Increasing number of CCAs & Rates!
– Lengthy ratemaking process, generally lagging (out of date), sometimes conflicting
– Administratively complex & confusing to customers/industry
• Market-Integrated, Incentive-based DR Programs (Supply Side Demand Response)
– Multiple programs focused on load shed as resource adequacy
– Challenges in CAISO market integration, measurement & verification
– Administratively & technically complex, inefficient, high transaction costs
• Distribution level DR
– Additional localized, temporary rate/incentive tariffs or
– Incremental DER procurement contracts
California Public Utilities Commission
Present
Basket of Rates
(cost recovery / allocation, equity)
Basket of Supply-Side Programs
(market integrated)
Demand Side: Flexible Unified Signal for
Energy in California (CalFUSE)
Future
➔ Reduced complexity, Single point focus
➔ Highly scalable, widespread adoption
➔ Reduced cost of controls, automation
Distribution Level DR
➔ Complex, inefficient, expensive, confusing
➔ Difficult to scale, Limited adoption
➔ High cost of controls, automation
California Public Utilities Commission 21
Image Source: PNNL “DSO+T Study”, January 2022
The “CalFUSE” Vision
➔Widespread adoption of
demand flexibility solutions
➔Reduced peak loads,
energy prices,
infrastructure needs
➔Reduced cost of service
California Public Utilities Commission 22
The “CalFUSE” Staff Proposal
California Public Utilities Commission
Three Pillars of CalFUSE Policy Roadmap
Six Elements
Price Presentation
Element 1: Standardized price access
Rate Reform
(Three-prong strategy)
Element 2: Real
-time energy prices
Element 3: Real
-time capacity prices
Element 4: Bi
-directional prices
Customer Options for Energy
Optimization
Element 5: Subscription option
Element 6: Transactive option
23
California Public Utilities Commission
The CalFUSE “Framework”
Three Pillars Six Elements
Price Presentation
Element 1: Standardized price access
Rate Reform
(Three-prong strategy)
Element 2: Real
-time energy prices
Element 3: Real
-time capacity prices
Element 4: Bi
-directional prices
Customer Options for Energy
Optimization
Element 5: Subscription option
Element 6: Transactive option
24
California Public Utilities Commission
Six Elements of CalFUSE Framework (Opt-in)
1: Develop standardized, universal access to current electricity price
2: Introduce dynamic prices based on real-time, wholesale energy cost
3: Incorporate dynamic capacity charges based on real-time grid utilization
4: Transition to bidirectional prices (import & export)
5: Offer subscription option (historic load shape & energy quantity at OAT price)
6: Introduce transactive features (ability to lock in price in advance)
California Public Utilities Commission
Battery
Smart
Appliances
EV
EMS
House
EMS
EMS
HVAC
EMS
e-Water
Heater
EMS
https://MyElectricityPrice.com
John Doe
Address
Account #
Element 1: Standardized, Universal Access to
Electricity Price
Third Party
Service
Providers
(TSPs)
(standardized, statewide, web-based price portal)
$P
1PM
$P
2PM
$P
3PM
$P
4PM
….
$P
1PM
$P
2PM
$P
3PM
$P
4PM
….
• Hourly, [15 min, 5 min]
• Next day, 24 x hourly
California Public Utilities Commission
Battery
Smart
Appliances
EV
EMS
House
EMS
EMS
HVAC
EMS
e-Water
Heater
EMS
Price Machine
(Cloud Platform)
https://MyElectricityPrice.com
John Doe
Address
Account #
Flexible Architecture (Accommodate LSEs, POUs)
UDC
$P
Distribution
LSE
$P
Generation
,
• Next day, 24 x hourly
Third Party
Service
Providers
(TSPs)
$P
1PM
$P
2PM
$P
3PM
$P
4PM
….
(standardized, statewide, web-based price portal)
$P
1PM
$P
2PM
$P
3PM
$P
4PM
….
• Hourly, [15 min, 5 min]
6
Investor
-Owned Utilities
24 ➔
50
Community Choice Aggregators
40
Municipal Utilities
California Public Utilities Commission
Role of Third Parties
Third parties expected to play a major role in the implementation of
CalFUSE.
The CalFUSE “ecosystem” could include:
• Application developers focused on making the CalFUSE price signal accessible to
customers and devices,
• Device manufacturers integrating the necessary functionality to enable the devices
to interact with the CalFUSE signal,
• Automation service providers layering intelligent algorithms or artificial intelligence to
optimize device behavior in response to the CalFUSE signal,
• Energy management service providers offering services to customers for managing
multiple smart devices and optimize customer’s bills, and
• DER operators or aggregators pooling together and leveraging multiple customers
and their devices as a resource and offering services to LSEs or UDCs, etc.
28
California Public Utilities Commission
Element 1: Key Implementation Questions
1. What processes, systems, or entities are necessary to
facilitate the development and maintenance of the
statewide price portal as described?
2. What should be the timeline to implement the statewide
price portal?
3. Should the price portal be available by default to all
customers of all LSEs in the state?
4. What processes, systems, or entities are necessary to
facilitate the development, operation, and maintenance of
the price machine?
29
California Public Utilities Commission
CalFUSE Framework: Element 2
1: Develop standardized, universal access to current electricity price
2: Introduce dynamic prices based on real-time, wholesale energy cost
3: Modify prices for dynamic capacity charges based on real-time grid utilization
4: Transition to bidirectional prices (import & export)
5: Offer subscription option (historic load shape & energy quantity at OAT price)
6: Introduce transactive features (ability to lock in price in advance)
California Public Utilities Commission
Battery
Smart
Appliances
EV
EMS
House
EMS
EMS
HVAC
EMS
e-Water
Heater
EMS
Price Machine
(Cloud Platform)
https://MyElectricityPrice.com
John Doe
Address
Account #
Element 2: Locational Dynamic Prices per
Wholesale Energy Cost
UDC
$P
Distribution
LSE
$P
Generation
Input at set up
Real-time
LMP
,
• Next day, 24 x hourly
Third Party
Service
Providers
(TSPs)
$P
1PM
$P
2PM
$P
3PM
$P
4PM
….
(standardized, statewide, web-based price portal)
$P
1PM
$P
2PM
$P
3PM
$P
4PM
….
• Hourly, [15 min, 5 min]
California Public Utilities Commission
Benefits: Real-Time Locational Prices Linked
to CAISO Market
1. Reflects CAISO market conditions, encourages load shift
2. Reduces curtailment, evening ramp, emissions
3. Enhances reliability
4. Reduces energy procurement costs for all customers
5. Complements anticipated proposed amendments to CEC’s Title 20
(Load Management Standards)
California Public Utilities Commission
Element 2: Key Implementation Questions
1. What should be the time base for the LMP component of
the CalFUSE signal that represents the variable commodity
energy cost?
2. What locational granularity should be used for the LMP
component of the CalFUSE signal?
33
California Public Utilities Commission
5-Min Stretch Break :)
Image Source: iamthinks.blogspot.com
https://www.showeet.com/19/06/2016/templates/title-slide-templates-for-powerpoint-and-keynote/
California Public Utilities Commission
CalFUSE Framework: Element 3
1: Develop standardized, universal access to current electricity price
2: Introduce dynamic prices based on real-time, wholesale energy cost
3: Incorporate dynamic capacity charges based on real-time grid utilization
4: Transition to bidirectional prices (import & export)
5: Offer subscription option (historic load shape & energy quantity at OAT price)
6: Introduce transactive features (ability to lock in price in advance)
California Public Utilities Commission
Utility Costs Dissected
36
• Capacity prices should be dynamic, linked to utilization, and volumetric: $/kWh
– Not based on individual customer factors such as the peak customer demand
during a billing period (i.e., $/kW such as, monthly demand charges)
– Should incentivize usage when it benefits the generation and distribution system
AND will reduce long-term infrastructure costs
California Public Utilities Commission
Element 3: Scarcity Pricing for Capacity Cost
Recovery
• Current approach
– Non-Residential: Demand charge based on
customer’s peak load
– Residential: Volumetric prices
• Issues with current approach
– Encourages non-economic behavior
– No signal to reduce peak system load
– Increase in cost of service with
misalignment between supply and demand
• ➔ Hourly capacity charges ($/kWh) to
recover cost of fixed capacity
– Distribution capacity
– Generation capacity (Resource Adequacy)
– Ramping capacity (Flex RA)
Hourly Capacity Charge ($/kWh)
% Capacity Utilization (real-time grid conditions)
100% Capacity Utilization
Proposed: Scarcity Price Function
- Recover more fixed costs as system
utilization increases
- Based on long-run marginal cost of
adding capacity
California Public Utilities Commission
• Scarcity prices based on grid conditions determine Delivery, Gen, and Flex Gen prices:
– Revenue = Sum-product of test year hourly load and hourly scarcity prices (for each capacity element)
– Scaled to recover the appropriate annual revenue (same as OAT) for each “section” of the system
UDC:
$P
Distribution
= f(x)
LSE: $P
Gen RA
= g(y)
LSE: $P
Flex RA
= h(z)
*Based on design used in SCE/TEMIX RATES Pilot (2016-2019)
Example: Scarcity Pricing for Capacity Costs
Price Machine computes composite price = $P
Distribution
+ $P
RA Capacity
+ $P
Flex RA
+ $LMP
California Public Utilities Commission
Battery
Smart
Appliances
EV
EMS
House
EMS
EMS
HVAC
EMS
e-Water
Heater
EMS
Price Machine
(Cloud Platform)
https://MyElectricityPrice.com
John Doe
Address
Account #
Real-time
Grid Utilization
x = UDC Circuit Load
y = LSE Net Load
z = LSE Net Load Ramp
Element 3: Dynamic Capacity Charges based on
Local Grid Utilization
DO
$P
Distribution
LSE
$P
Generation
Input at set up
Real-time
, 5 min]
• Next day, 24 x hourly
UDC
$P
Distribution
= f(x)
LSE
$P
RA Capacity
= g(y)
LSE
$P
Flex RA
= h(z)
LMP
Third Party
Service
Providers
(TSPs)
$P
1PM
$P
2PM
$P
3PM
$P
4PM
….
• Hourly, [15 min,
(standardized, statewide, web-based price portal)
California Public Utilities Commission
Example: SCE/TeMix “RATES” Pilot
Composite Hourly Prices based on Hourly Capacity Utilization & CAISO LMP
Source: SCE / TeMix “RATES” Pilot funded by CEC (EPIC)
-100
0
100
200
300
400
500
600
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
$/MWh
Hourly Stacked Prices for a Summer Day
FCR = Fixed Cost Recovery
California Public Utilities Commission
Objectives Achieved via Hourly Capacity Prices
1. Encourage load shift complementary to grid-based economics
2. Shift fixed cost recovery burden onto load driving high system utilization and
capacity upgrades
3. Ensure full recovery of revenue requirements
– Prices can be scaled to recover same revenue as OAT for various segments of the
distribution system (ensures fairness across a service territory)
4. Minimize long-term infrastructure costs
5. Allow flexible rate design options to reflect policy choices
– Different cost allocations and recovery by customer class
6. More frequent and granular updates to prices to stabilize revenues AND
incorporate system efficiency gains from demand flexibility into rates
California Public Utilities Commission
Element 3: Key Implementation Questions
1. What geographical scope should be used to define the “localized”
available infrastructure (that serves as the basis for determining real-
time utilization level) for the different capacity elements of CalFUSE?
2. Should all fixed costs be recovered via dynamic volumetric prices or
only marginal generation and distribution capacity costs?
3. Should the scarcity price curves be customer class specific?
42
California Public Utilities Commission
CalFUSE Framework: Element 4
1: Develop standardized, universal access to current electricity price
2: Introduce dynamic prices based on real-time, wholesale energy cost
3: Incorporate dynamic capacity charges based on real-time grid utilization
4: Transition to bidirectional prices (import & export)
5: Offer subscription option (historic load shape & energy quantity at OAT price)
6: Introduce transactive features (ability to lock in price in advance)
California Public Utilities Commission
Benefits of Symmetric, Bidirectional Prices
1. Easily discoverable, transparent, predictable economic value
– Simplifies DER Valuation & Operations
2. Distributed, economically-driven self-dispatch of DERs
– Removes need for supervisory control/coordination of BTM devices
3. Scarcity prices ensure that export (and import) prices are linked to cost
causation
– Reduces unintended cost-shift
4. Improved monetization of DER services to the grid (locational, temporal)
– Transparent capacity value of exports to the distribution system
5. Enable full V2G integration
– Mobile storage used to enhance grid resiliency
– e.g., season use of electrified school busses
California Public Utilities Commission
Analysis: Simulation of Energy Storage Dispatch
All Amounts
Annualized
Retail Rate
Bill w/o
Storage
Bill with
Storage
Bill Savings
with Storage
GHG
Emissions
Reduced
(metric tons)
Number
of Cycles
Residential
TOU-D-Prime $1,849 $1,397 $447
0.25
150
CalFUSE
$1,644 $725 $919
0.36
201
Commercial
TOU-8 (with
NCDC)
$543K $513K $33K
3.78
332
CalFUSE
$590K $523K $66K
28.43
393
• Storage dispatch optimized to SCE TOU rates vs. CalFUSE price signal
• Result: Bill and GHG savings significantly higher with CalFUSE
Note: Results were generated by ED Staff using OSESMO (Open-Source Energy Storage Model).
This tool has been used to evaluate CPUC’s SGIP (Self-Generation Incentive Program)
California Public Utilities Commission
Element 4: Key Implementation Questions
1. Are the existing customer data access policies, systems, processes (in
conjunction with the Element 1 price portal) adequate to allow third-
party service providers of BTM DERs and automated energy
management tools to fully leverage a CalFUSE signal and maximize
customer benefits?
46
California Public Utilities Commission
CalFUSE Framework: Element 5
1: Develop standardized, universal access to current electricity price
2: Introduce dynamic prices based on real-time, wholesale energy cost
3: Incorporate dynamic capacity charges based on real-time grid utilization
4: Transition to bidirectional prices (import & export)
5: Offer subscription option (historic load shape & energy quantity at OAT price)
6: Introduce transactive features (ability to lock in price in advance)
California Public Utilities Commission
0
0.5
1
1.5
2
2.5
3
0 5 10 15 20
Usage (kWh)
Time (hour)
Subscribed Actual
Difference between
Subscription and Actual
Consumption is billed at
dynamic rate
Subscription load shape is billed at OAT
(e.g., TOU) rate.
Excess Subscription is
credited at dynamic rate
Customer-Specific Baseline Subscriptions: Historic Load Shape &
Energy Quantity at OAT Price
Stabilizing Element (Hedge) for Both Customers and Utilities
• Quantity should be
based on historical
usage.
• Using the OAT
ensures that
customer bills are
similar to prior years
• Options for
subscriptions shape
include: Customer-
specific, class-
averaged, climate-
zone weighted.
California Public Utilities Commission
Benefits of “Customer Baseline Subscription”
Protection
• Protects customers
against bill volatility
• Eases customers
transition
• Non-responsive
customers pay similar
bills
Flexibility
• Encourages
opportunistic load shift
• Accommodates
changes in demand
(e.g., new DERs)
Predictability
• Stabilizes revenue
recovery for distribution
operators, LSEs
California Public Utilities Commission
Fixed Cost Recovery Options
Cost Component
CalFUSE Options
Status
Quo
Misc Program Fixed Costs
(PPP, EE, etc.)
1.
Embedded in baseline subscription
2.
Volumetric, scarcity-based prices
3.
Monthly fixed charges
Fixed Charges (limited),
Demand Charges
(non
-residential)
Non
-Marginal Capacity
Volumetric: Some Time
-
differentiated + Flat
adder
Marginal Capacity
Volumetric / Scarcity price linked to grid
utilization
Energy (including losses)
Volumetric / Locational marginal price
linked to CAISO
50
California Public Utilities Commission
Element 5: Key Implementation Questions
1. How should baseline subscription profiles be updated/revised?
2. What are alternative approaches to bill/revenue stabilization as
dynamic rates are offered at wider scale?
3. How can the role of third-party energy managers and service
providers be best leveraged for baseline subscriptions?
4. What best practices should be considered for educating customers
about CalFUSE price signal and baseline subscriptions?
51
California Public Utilities Commission
CalFUSE Framework: Element 6
1: Develop standardized, universal access to current electricity price
2: Introduce dynamic prices based on real-time, wholesale energy cost
3: Incorporate dynamic capacity charges based on real-time grid utilization
4: Transition to bidirectional prices (import & export)
5: Offer subscription option (historic load shape & energy quantity at OAT price)
6: Introduce transactive features (ability to lock in price in advance)
California Public Utilities Commission
Element 6: Transactive Features
California Public Utilities Commission
Battery
Smart
Appliances
EV
EMS
House
EMS
EMS
HVAC
EMS
e-Water Heater
EMS
Price Machine
(Cloud Platform)
https://MyElectricityPrice.com
John Doe
Address
Account #
Real-time
Grid Conditions
x = Circuit Aggregate Load
y = LSE Aggregate Load
z = LSE Net Load Ramp
Element 6: Transactive Features
DO
$P
Distribution
LSE
$P
Generation
Input at set up
Real-time
• [Week-ahead, 7x24 x hourly]
• [Additional forward prices…]
3. [Forward Buy/Sell Contracts]
, 5 min]
• Next day, 24 x hourly
UDC
$P
Distribution
= f(x)
LSE
$P
RA Capacity
= g(y)
LSE
$P
Flex RA
= h(z)
1. Import / Export @ Current Price
2. Fixed Price Subscriptions
LMP
Third Party
Service
Providers
(TSPs)
$P
1PM
$P
2PM
$P
3PM
$P
4PM
….
• Hourly, [15 min,
(standardized, statewide, web-based price portal)
California Public Utilities Commission
Hour Ending
Equity Considerations in the CalFUSE Proposal
A
B
C
D
5p 6p
E
7p
8p
Demand (kW)
Capacity Limit
One-part
Tariff:
All customers
pay higher
price, unless
they shift
1. Opt-in
2. CalFUSE signal can be tailored for
low-income customers
3. Baseline subscription to hedge
against extreme outcomes
4. Early adopters reduce cost of
service for everyone
– Drive technology cost reduction
– Enable wider adoption
5. Transactive Layer: Savings realized
by all (including non-participants)
California Public Utilities Commission
Hour Ending
Equity Considerations in the CalFUSE Proposal
A
B
A
5p
B
C C
D D
5p 6p
E
7p
8p 6p
E
7p
8p
Demand (kW)
Capacity Limit
Multi-part Tariff (Transactive Layer):
Only customer A shifts load to 5P via an
advanced transaction => All customers pay
reduced price
One-part
Tariff:
All customers
pay higher
price, unless
they shift
1. Opt-in
2. CalFUSE signal can be tailored for
low-income customers
3. Baseline subscription to hedge
against extreme outcomes
4. Early adopters reduce cost of
service for everyone
– Drive technology cost reduction
– Enable wider adoption
5. Transactive Layer: Savings realized
by all (including non-participants)
California Public Utilities Commission
Benefits of a Transactive System
LSEs & Distribution
Operators
• Improves visibility,
planning, operations
• Feedback loop to
manage scheduling,
e.g., EV charging
CAISO
• More visibility, reduce
load forecast error
Customers
• Transactive energy
management tools,
optimize cost… for
advanced customers
• Locks in price savings
to all customers
California Public Utilities Commission
Analysis: Simulation of Transactive System for
ERCOT Grid
• Study conducted by PNNL, funded by DOE
– Slightly more advanced transactive framework: forecasts of available supply and
demand bids are used to generate prices
– Transactive price is bidirectional, symmetric, and “revenue-neutral” (similar to CalFUSE)
• Significant shifting of energy use from high demand periods to low price
periods
– Reduced peak load: 9-15%; Reduced daily load swings: 20-44%
– Similar reductions in wholesale price variation
• Net annual benefit ~12-19% of total ERCOT system costs ($3.3-5.0 billion)
– Reduced wholesale energy costs and deferred infrastructure upgrade costs
• Equity: sustained benefits for all customers
– Participating customers: 14-16% savings; Non-participating customers: 10-14% savings
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California Public Utilities Commission
Element 6: Key Implementation Questions
1. Should there be one system for the whole state, or should there be
multiple systems (perhaps one per UDC, or one per LSE)?
2. What are the processes, agreements, and understandings that are
necessary between UDCs and LSEs to facilitate the transactive
elements of CalFUSE?
3. What standards, rules, and regulations are required to facilitate a
robust, secure, and efficient transactive system? What regulatory
oversight is required?
4. What factors should an LSE consider in deciding how to formulate bids
in a transactive system?
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California Public Utilities Commission 60
Upcoming IOU Pilots
California Public Utilities Commission
Upcoming CalFUSE Pilots
• CalFUSE Pilots authorized by Summer Reliability OIR Phase 2 (D.21.12.05) to
launch on May 1
• VCE/PG&E “AgFIT” agricultural pumping dynamic rate pilot
– Jointly implemented by Polaris, TeMix, VCE, and PG&E
– Authorized for 5MW (~1MW enrolled)
– Provides farmers week-ahead prices which they can use to pre-schedule irrigation
cycles using TeMix Transactive Layer
• SCE “RATES Phase 2” dynamic rate pilot
– Open to all C&I and residential SCE customers
– Will be available across SCE service territory
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California Public Utilities Commission
Current and upcoming IOU Dynamic Rate Pilots
• PG&E Commercial EV Day Ahead RTP (CEV DAHRTP) rate (D.21-11-017) – October 2023
– Optional day-ahead, hourly RTP rate for Commercial EV customers.
– Includes a dynamic MGCC Adder and a time-differentiated Revenue Neutral Adder
– Distribution rate includes a discounted demand charge-“Subscription”
– Cost-based export rate-rider (in proceeding: A.20-10-011)
• PG&E GRC Phase 2 RTP rate (A.19-11-019) – October 2023
– Optional DAHRTP generation rate open to multiple customer classes.
– Joint settlement has been filed regarding the rate design, which mirrors much of the CEV rate
– Decision is expected in July 2022.
• SDG&E GRC Phase 2 RTP rate & High-Power EV(HPEV) RTP Rate (A.21-12.006/A.21-12.008)
– Applications for C&I RTP pilot and RTP export rate-rider for HPEV customers have been
consolidated into a single proceeding.
– Rate design includes day-ahead hourly market prices, CPP adders for MGCC.
– SDG&E to revise its applications in supplemental testimony based on ED staff guidelines.
Note: All the above pilots offer dynamic generation rates and do not include dynamic distribution
rates.
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California Public Utilities Commission 63
End of Briefing
California Public Utilities Commission
Lunch Break until 1:30 PM.
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Q&A
Whitney Richardson, Retail Rates Section | Energy Division
July 21, 2022
California Public Utilities Commission
10-Min Stretch Break :)
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California Public Utilities Commission
Comments & Discussion
Energy Division |
❑ Paul Phillips, Retail Rates Section
❑ Aloke Gupta, Demand Response Section
July 21, 2022
California Public Utilities Commission
Closing Remarks
Paul Phillips, Retail Rates Section | Energy Division
July 21, 2022
California Public Utilities Commission
Thank you for attending today’s Advanced DER & Demand
Flexibility Management Workshop. Feedback welcome.
Hosts’ contact:
Andrew Magie – Andrew[email protected].gov
Whitney Richardson – Whitney.Richardson@cpuc.ca.gov
Presenters’ contact:
Jean Lamming – Jean.Lamming@cpuc.ca.gov
Achintya Madduri – Achintya.Madduri@cpuc.ca.gov