BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ) ) ) ) ) ) ) ) ) )

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of San Diego Gas & Electric Company (U 902-M for Approval Of Demand Response Program Augmentations And Associated Funding For The Years 2013 Through 2014 Application of Southern California Edison Company (U 338-E Proposing Improvements And Augmentations To Its Existing Demand Response Program Portfolio For The Summers Of 2013 And 2014 A. 12-12-016 (Filed December 21, 2012 A.12-12-017 (Filed December 21, 2012 REPLY COMMENTS OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E ON THE PROPOSED DECISION ADDRESSING COMMISSION STAFF REPORT ON 2012 DEMAND RESPONSE PROGRAM RESULTS I. INTRODUCTION Pursuant to Rule 14.3 of the Rules of Practice and Procedure of the California Public Utilities Commission (Commission, Southern California Edison Company (SCE hereby submits these comments in reply to the various parties Opening Comments on the Proposed Decision (PD Addressing Commission Staff Report On 2012 Demand Response Program Results, which was mailed on June 11, 2013 in Application (A. 12-12-016, et al. 1 SCE has reviewed the various positions of the parties and respectfully offers the following Reply Comments. 1 The following parties filed Opening Comments on the PD: San Diego Gas & Electric Company (SDG&E, the Division of Ratepayer Advocates (DRA, and the California Independent System Operator (CAISO. 1

II. DISCUSSION A. The Commission Should Reject DRA s Proposed Finding Of Fact And Ordering Paragraph Regarding Program Fatigue In its comments, the DRA recommends, solely for SCE, a new finding of fact and new ordering paragraph regarding customer fatigue. DRA recommends the following: New Finding of Fact: For the non-emergency program, SCE considers optimizing performance and minimizing customer fatigue in its decision to trigger a DR program. New Ordering Paragraph: SCE shall investigate as part of their annual Demand Response program process evaluation 1 any evidence of customer fatigue and 2 investigate the trade-off between program performance and customer fatigue with a view to determine the maximum demand reduction possible at acceptable levels of customer fatigue on all non-emergency programs in which customer fatigue is a consideration for triggering the program. SCE disagrees with both of DRA s recommendations because they are inconsistent with the record. As shown in this proceeding, for summer 2012, SCE included customer fatigue when considering the dispatch of certain programs; but not all programs. SCE only applied this approach to its Peak Time Rebate Program (PTR and Demand Bidding Program (DBP; both of which have no penalties and can be dispatched daily year-round. 2 SCE s other non-emergency based programs do not consider customer fatigue because they utilize either heat rates or market prices as triggers, have monthly/annual event limits, and incur penalties for non-performance (i.e., Capacity Bidding Program and Aggregator Managed Portfolio contracts. DRA s comments also suggest that the cost-effectiveness evaluation of demand response (DR programs should consider customer fatigue. This suggestion is unnecessary and unsupported by the record. DRA is introducing new cost-effectiveness policy, which is more 2 Daily excluding holidays. SCE also considered fatigue in its residential a/c cycling program in 2012 because it was transitioning from an emergency only program (e.g., very minimal dispatch to one which was dispatched for an average of 21 hours per customer. 2

appropriately addressed in the context of the next DR rulemaking rather than through this proceeding. Moreover, the Commission s cost-effectiveness model adopted in Decision (D.10-12-045 would likely capture any effects of fatigue through a reduced MW value (e.g., reduced benefits based on the ex post results (e.g., past year results. SCE did not address in its opening comments the requirement to evaluate PTR for customer fatigue because it is not opposed to such a requirement. However, SCE does object to evaluating customer fatigue for all non-emergency programs. Because DBP is SCE s only other program that considers fatigue, SCE finds it reasonable to include the program in the analysis. Rather than create a new ordering paragraph regarding customer fatigue, SCE is amenable to modifying the ALJ s Ordering Paragraph 9 as follows: 9. San Diego Gas & Electric Company and Southern California Edison Company shall investigate as part of their annual Demand Response program process evaluation, any evidence of Peak Time Rebate customer fatigue and its impact on program design and dispatch. In addition, Southern California Edison shall investigate any evidence of Demand Bidding Program customer fatigue and its impacts on program design and dispatch. B. The CAISO Comments Demonstrate That Market Integration Will Reduce The Need To Conduct Daily And Weekly Forecast Reporting And Evaluate Why Utilities Use Peaker Plants CAISO states in its comments that, the daily and weekly demand response program forecasts will be a non-issue when DR programs are bid into the ISO market. SCE agrees. As SCE has stated earlier in this proceeding, the need to evaluate daily forecasts to ex post results will be moot when market integration is made available. 3 As more of SCE s programs are integrated the forecasting report will likely change. Furthermore, as the CAISO points out, the comparison of peaker plant usage to DR will be evaluated through the market mechanisms once the DR resources are integrated with the CAISO market. 4 In other words, the need to determine why IOUs dispatch peakers compared to DR programs will also be a non-issue because resources 3 SCE s March 4, 2013 Response to ALJ February 21, 2013 Ruling at Appendix A, p. 15 of 34. 4 CAISO comments at p. 5. 3

in the wholesale market are used on least cost marginal economic basis, and DR programs would be treated the same. As such, SCE recommends that the Commission reject DRA s proposal to evaluate why utilities are using peaker plants at a much higher rate than DR programs. III. CONCLUSION SCE appreciates the opportunity to provide these reply comments on the PD. Respectfully submitted, JANET S. COMBS R. OLIVIA SAMAD /s/ Janet S. Combs By: Janet S. Combs Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770 Telephone: (626 302-1524 Facsimile: (626 302-7740 E-mail: janet.combs@sce.com July 8, 2013 4

CERTIFICATE OF SERVICE I hereby certify that, pursuant to the Commission s Rules of Practice and Procedure, I have this day served a true copy of the REPLY COMMENTS OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E ON THE PROPOSED DECISION ADDRESSING COMMISSION STAFF REPORT ON 2012 DEMAND RESPONSE PROGRAM RESULTS on all parties identified on the attached service list(s A.12-12-017 and A.12-12-016. Service was effected by one or more means indicated below: Transmitting the copies via e-mail to all parties who have provided an e-mail address. Placing the copies in sealed envelopes and causing such envelopes to be delivered by hand or by overnight courier to the offices of the Commissioner(s or other addressee(s. ALJ Kelly A. Hymes CPUC 505 Van Ness Ave San Francisco, CA 94102 Comm. Michael R. Peevey CPUC 505 Van Ness Ave. San Francisco, CA 94102 Placing copies in properly addressed sealed envelopes and depositing such copies in the United States mail with first-class postage prepaid to all parties for those listed on the attached non-email list. Directing Prographics to place the copies in properly addressed sealed envelopes and to deposit such envelopes in the United States mail with first-class postage prepaid to all parties. Executed this Monday, July 8, 2013 at Rosemead, California. /s/ Irene Gutierrez Irene Gutierrez Legal Assistant SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770

CPUC - Service Lists - A1212016 http://www.cpuc.ca.gov/service_lists/a1212016_80657.htm Page 1 of 4 7/8/2013 CPUC Home CALIFORNIA PUBLIC UTILITIES COMMISSION Service Lists PROCEEDING: A1212016 - SDG&E - FOR APPROVAL FILER: SAN DIEGO GAS & ELECTRIC COMPANY LIST NAME: LIST LAST CHANGED: JULY 1, 2013 DOWNLOAD THE COMMA-DELIMITED FILE ABOUT COMMA-DELIMITED FILES Back to Service Lists Index Parties STEVEN D. PATRICK R. OLIVIA SAMAD ATTORNEY ATTORNEY SAN DIEGO GAS AND ELECTRIC COMPANY SOUTHERN CALIFORNIA EDISON COMPANY 555 WEST FIFTH STREET, SUITE 1400 2244 WALNUT GROVE AVE. / PO BOX 800 LOS ANGELES, CA 90013-1011 ROSEMEAD, CA 91770 FOR: SAN DIEGO GAS AND ELECTRIC COMPANY FOR: SOUTHERN CALIFORNIA EDISON COMPANY SUE MARA LISA-MARIE SALVACION PRINCIPAL RTO ADVISORS, LLC LEGAL DIVISION 164 SPRINGDALE WAY ROOM 5029 REDWOOD CITY, CA 94062 505 VAN NESS AVENUE FOR: ALLIANCE FOR RETAIL ENERGY SAN FRANCISCO, CA 94102-3214 MARKETS/DIRECT ACCESS CUSTOMER COALITION FOR: DRA JONATHAN D. PENDLETON NORA SHERIFF COUNSEL ALCANTAR & KAHL PACIFIC GAS & ELECTRIC COMPANY 33 NEW MONTGOMERY ST., STE. 1850 77 BEALE STREET, MC B30A SAN FRANCISCO, CA 94105 SAN FRANCISCO, CA 94105 FOR: CALIFORNIA LARGE ENERGY CONSUMERS FOR: PACIFIC GAS & ELECTRIC COMPANY ASSOCIATION SARA STECK MYERS JOHN M. CUMMINS, ESQ. ATTORNEY AT LAW ASSOCIATE COUNSEL - DEPT OF THE NAVY 122 28TH AVE. FEDERAL EXECUTIVE AGENCIES

CPUC - Service Lists - A1212016 http://www.cpuc.ca.gov/service_lists/a1212016_80657.htm Page 2 of 4 7/8/2013 SAN FRANCISCO, CA 94121 1 AVENUE OF THE PALMS, STE. 161 FOR: ENERNOC, INC. SAN FRANCISCO, CA 94130 FOR: FEDERAL EXECUTIVE AGENCIES (FEA JUDITH SANDERS CALIFORNIA ISO 250 OUTCROPPING WAY FOLSOM, CA 95630 FOR: CALIFORNIA INDEPENDENT SYSTEM OPERATOR (CAISO Information Only BARBARA BARKOVICH CASE ADMINISTRATION BARKOVICH & YAP PACIFIC GAS & ELECTRIC COMPANY EMAIL ONLY EMAIL ONLY EMAIL ONLY, CA 00000 EMAIL ONLY, CA 00000 MRW & ASSOCIATES, LLC EMAIL ONLY EMAIL ONLY, CA 00000 KAREN TERRANOVA ALCANTAR & KAHL EMAIL ONLY EMAIL ON LY, CA 00000-0000 KHOJASTEH DAVOODI DANIEL W. DOUGLASS NAVY ACQ-UTILITY RATES & STUDIES OFFICE ATTORNEY DEPT OF THE NAVY, FACILITIES ENGINEERING DOUGLASS & LIDDELL 1322 PATTERSON AVE., SE - BLDG NO. 33 21700 OXNARD ST., STE. 1030 WASHINGTON NAVY YARD, DC 20374-5018 WOODLAND HILLS, CA 91367 FOR: ALLIANCE FOR RETAIL ENERGY MARKETS (AREM/DIRECT ACCESS CUSTOMER COALITION (DACC CASE ADMINISTRATION DAVID P. LOWREY SOUTHERN CALIFORNIA EDISON COMPANY SOUTHERN CALIFORNIA EDISON COMPANY 2244 WALNUT GROVE AVENUE 1515 WALNUT GROVE AVE. ROSEMEAD, CA 91770 ROSEMEAD, CA 91770 DONALD C. LIDDELL ANNLYN M. FAUSTINO DOUGLASS & LIDDELL REGULATORY CASE ANALYST & SUPPORT 2928 2ND AVENUE SDG&E/SCGC SAN DIEGO, CA 92103 8330 CENTURY PARK COURT, CP31E SAN DIEGO, CA 92123 JOY C. YAMAGATA MONA TIERNEY-LLOYD REGULATORY CASE ADMIN. DIR., WESTERN REGUALTORY AFFAIRS SAN DIEGO GAS & ELECTRIC COMPANY ENERNOC, INC. 8330 CENTURY PARK COURT, CP32D PO BOX 378 SAN DIEGO, CA 92123 CAYUCOS, CA 93430 FOR: SAN DIEGO GAS & ELECTRIC COMPANY

CPUC - Service Lists - A1212016 http://www.cpuc.ca.gov/service_lists/a1212016_80657.htm Page 3 of 4 7/8/2013 CARA GOLDENBERG KEN ABREU DIAN GRUENEICH CONSULTING, LLC PACIFIC GAS & ELECTRIC COMPANY 201 MISSION STREET, SUITE 1200 245 MARKET STREET SAN FRANCISCO, CA 94105 SAN FRANCISCO, CA 94105 LUKE A. TOUGAS HILLARY CORRIGAN PACIFIC GAS & ELECTRIC COMPANY CALIFORNIA ENERGY MARKETS 245 MARKET STREET 425 DIVISADERO ST. STE 303 SAN FRANCISCO, CA 94105 SAN FRANCISCO, CA 94117-2242 MATTHEW O'KEEFE DELPHINE HOU OPOWER CALIF. INDEPENDENT SYSTEMS OPERATOR 760 MARKET STREET, 4TH FLOOR 250 OUTCROPPING WAY SAN FRANCISCO, CA 94920 FOLSOM, CA 95630 JOHN GOODIN MELANIE GILLETTE CALIFORNIA INDEPENDENT SYSTEM OPERATOR DIR - WESTERN REG. AFFAIRS 250 OUTCROPPING WAY ENERNOC, INC. FOLSOM, CA 95630 115 HAZELMERE DRIVE FOLSOM, CA 95630 State Service DAVID B. PECK ALAN MECK CPUC ELECTRICITY PLANNING & POLICY BRANCH MARKET STRUCTURE, COSTS AND NATURAL GAS EMAIL ONLY AREA 4-A EMAIL ONLY, CA 00000 505 VAN NESS AVENUE SAN FRANCISCO, CA 94102-3214 AUDREY LEE BRUCE KANESHIRO EXECUTIVE DIVISION DEMAND SIDE PROGRAMS BRANCH ROOM 5307 AREA 4-A DANIEL BUCH KELLY A. HYMES DEMAND SIDE ANALYSIS BRANCH DIVISION OF ADMINISTRATIVE LAW JUDGES AREA ROOM 5111 PAULA GRUENDLING RAJAN MUTIALU DEMAND SIDE PROGRAMS BRANCH DEMAND SIDE ANALYSIS BRANCH AREA 4-A AREA 4-A

CPUC - Service Lists - A1212016 http://www.cpuc.ca.gov/service_lists/a1212016_80657.htm Page 4 of 4 7/8/2013 RORY COX SCARLETT LIANG-UEJIO DEMAND SIDE ANALYSIS BRANCH DEMAND SIDE PROGRAMS BRANCH AREA 4-A AREA 4-A SUDHEER GOKHALE TAARU CHAWLA ELECTRICITY PRICING AND CUSTOMER PROGRAM DEMAND SIDE PROGRAMS BRANCH ROOM 4102 ROOM 4010 TIM G. DREW XIAN "CINDY" LI DEMAND SIDE ANALYSIS BRANCH ELECTRICITY PRICING AND CUSTOMER PROGRAM AREA 4-A ROOM 4104 TOP OF PAGE BACK TO INDEX OF SERVICE LISTS