2010 California Statewide Non-Residential Critical Peak Pricing Evaluation

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Created on Monday, 04 April 2011 00:00

This report provides ex post and ex ante load impact estimates for the default Critical Peak Pricing (CPP) tariffs that have been implemented by California's three investor owned utilities, Pacific Gas and Electric Company (PG&E), Southern California Edison (SCE) and San Diego Gas and Electric Company (SDG&E).

This is the first time in the U.S. that critical peak pricing has been used as the default tariff for such a substantial number of large and medium customers. The 2010 California experience provides the largest body of evidence regarding non-residential customer choices and price response on default dynamic pricing. It also provides the only source of data to date for medium customer price responsiveness under default dynamic pricing. This report contains the ex post and ex ante load impact estimates for all three utilities. Ex post impacts reflect the change in average hourly electricity demand attributable to the CPP tariff for specific 2010 days in which higher priced event days were called. In contrast, ex ante impacts are based on performance and load reduction patterns during historical event days but are standardized for normal and extreme weather year conditions that align with system planning. On average, PG&E, SCE and SD&GE called on roughly 1,650, 4,100 and 1,350 customers, respectively, to reduce loads on event days. PG&E called 9 critical peak events and obtained an average load reduction of 23.0 MW, or 3.9% of the average reference load on event days. SCE called 12 critical peak events, including an event on September 27th, when the peak temperature in downtown Los Angeles reached 110°F. SCE participants provided an average load reduction of 30.7 MW, or 2.8%. SDG&E called four critical peak events in 2010. Like SCE, one event was called on SDG&E's all-time system peak day, September 27th. The approximately 1,350 accounts enrolled on SDG&E's CPP tariff provided an average load reduction of 18.8 MW, or 5.26% of estimated peak load across all events.

In addition to producing estimates for historical event days, the analysis examined the extent to which several factors affected price responsiveness, including industry type, prior participation on voluntary CPP, dual participation in other DR programs and AutoDR or enabling technology. For PG&E and SDG&E, it was also possible to quantify the effect of customers' insuring part of their load against high prices. For SDG&E, it was possible to analyze persistence of impacts across multiple years and the effect of bill protection. To date, SDG&E is the only utility where it has been possible to analyze the effect of these two important issues among non-residential customers.

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