2020 DRAM RFO

Overview and History

In accordance with Decision (“D.”) 14-12-024 – Decision Resolving Several Phase Two Issues and Addressing the Motion for Adoption of Settlement Agreement on Phase Three Issues (“DR Phase Two and Three Decision”) approved on December 4, 2014 by the California Public Utilities Commission (CPUC or Commission) and D.16-06-029, Decision Adopting Bridge Funding for 2017 Demand Response Programs and Activities, San Diego Gas & Electric Company (“SDG&E”) is issuing its 2019 DRAM RFO. The 2019 DRAM RFO is seeking local, system and flexible Resource Adequacy (“RA”) resources via a standard, non-negotiable Demand Response Auction Mechanism Purchase Agreement (“DRAM PA” or “PA”) for execution in accordance with the RFO Protocols.

Ordering Paragraph (“OP”) 5 and 6 of the DR Phase Two and Three Decision ordered the California Investor-owned utilities, including SDG&E, to file an advice letter with a standard contract (the PA) outlining the parameters of the 2016 DRAM pilot. Advice Letter 2729-E was filed on April 20, 2015 containing this information. This advice letter was approved, with certain modifications, on July 23rd, 2015 in the Resolution E-4728. As ordered, a supplemental Advice Letter (AL 2729-E-A) was then filed on August 24th, 2015 with further modifications to the PA and SDG&E’s DRAM 2016 pilot program.

SDG&E submitted Advice Letter (“AL”) 2796-E on October 9, 2015 with the programmatic details of the 2017 DRAM pilot. R.4754 approved AL 2796-E on January 28, 2016 with modifications that were required to be filed in a supplementary AL. Consistent with OP 14 of R.4754 SDG&E filed AL.2796-E-A on February 8, 2016 with the final DRAM 2016 contract and qualitative factors.

D.16-06-029 OP19 authorized a third auction pilot, the 2018 DRAM RFO Pilot, for which SDG&E filed AL 2949 on September 1, 2016. This AL was approved by R.4817 on January 19, 2017 with modifications. SDG&E filed supplemental AL 2949-A with these modifications on February 2., 2017. In accordance with R.4817 SDG&E submitted AL 3041 outlining SDG&E’s registrations for the 2018-2019 DRAM. As required by D.17-10-017 OP 10 SDG&E to worked with the Energy Division to use capacity values in bid selection criteria that appropriately prioritize bids for local resource adequacy.

Most recently, Decision (“D.”) 19-07-009 – Decision Addressing Auction Mechanism, Baselines, and Auto Demand Response for Battery Storage approved on July 11, 2019 by the California Public Utilities Commission (CPUC or Commission), San Diego Gas & Electric Company (“SDG&E”) is issuing its 2020 DRAM RFO. The 2020 DRAM RFO is seeking local and system resources via a standard, non-negotiable Demand Response Auction Mechanism Purchase Agreement (“DRAM PA” or “PA”) for execution in accordance with the RFO Protocols.

On August 12, 2019, SDG&E filed advice letter 3418-E, along with Southern California Edison (4054-E) and Pacific Gas & Electric (5615-E), in compliance with Ordering Paragraph 4 of D.19-07-009, seeking approval of the 2020 DRAM Pilot. Additionally, on September 17, 2019, SDG&E filed a supplemental advice letter, 3418-E-A, along with Sothern California Edison (4054-E-A) and Pacific Gas & Electric (5615-E-A). SDG&E’s advice letter and supplemental was approved on September 25, 2019. effective as of September 11, 2019. The advice letter and supplemental contain programmatic details of the DRAM pilot for 2020.

D.19-07-009 OP 4 authorized a fifth auction pilot, the 2020 DRAM RFO Pilot, for which SDG&E filed Advice Letter 3418-E on August 12, 2019, and Supplemental 3418-E-A on September 17, 2019. These Advice Letters were approved on September 25, 2019, effective as of September 11, 2019, and address the modifications made over the 2019 DRAM solicitation.

SDG&E Electric Rule 32 governs how SDG&E manages third party demand response providers (“DRPs”.) The Commission, in D. 19-07-009, has made significant modifications to the past DRAM decisions, which has again authorized SDG&E to put in place certain processes and systems to facilitate a DRP's ability to bid Proxy Demand Resources (PDRs) into the wholesale market. The DRAM PA is subject to the provisions of Rule 32 and any limitations authorized by the Commission relative to its implementation.

The DRAM is a pay-as-bid auction of monthly system, and flexible (with system) RA for Offerors to bid directly in the California Independent Operator System (“CAISO”) market, with participation from customers in the SDG&E’s service territory. Offerors must bid directly into the CAISO energy market and any resulting revenues or liabilities allocated solely to the Offeror. Offeror’s DR resource shall be comprised of a Proxy Demand Resource (PDR) or or multiple PDRs that aggregate customers within SDG&E’s Sub-LAP. SDG&E has a single Sub-LAP (as opposed to the other California IOUs that have multiple Sub-LAPs) so, in effect, any SDG&E customer, whether receiving commodity service from SDG&E or an Energy Service Provider, is eligible.

Scheduling Coordinator Request for Information

As part of 2016 DRAM, the IOUs were issued a Request for Information from Scheduling Coordinators open to providing SC services to demand response aggregators. Information provided in response to the RFI, and subsequent updates since, have been made public as part of the 2020 DRAM.

• Scheduling Coordinator Request for Offers (SC RFI)