PG&Es 2009 Participating Load Pilot

2 Overview Regulatory Context Pilot Characteristics Lessons Next Steps

3 Regulatory Context December 2007 Federal Energy Act of 2007 (EISA 2007) February 2008 CPUC directs CA IOUs to further integrate Demand Resource in wholesale markets October 2008 FERC issues No. 719 December 2008 CPUC approves pilots that integrate in CAISO wholesale market

4 Participating Load Pilot Can we create demand response for the wholesale market with the attributes of supply side alternatives?

5 What is Participating Load? Load acting as a resource to: Participate in the wholesale market and offer ancillary service and energy products Load resource must be scheduled daily on an hourly basis, even without the DR load reduction: Separated from overall load schedules Must meet all CAISO technical specifications; e.g., 5- minute settlement metering, 10-minute responses, 4- second real time demand meter data, etc…

6 Pilot Characteristics Customer recruitment: Retail (HVAC), Industrial (Process), Local Gov. Office (HVAC) No co-generation or back up generation Already on Auto-DR Customer benefits: Receive Capacity + Energy (if called) incentives Able to receive real-time data Convenience and ease by having pre-determined load shed strategies; peace of mind CAISO ADS

7 Pilot Characteristics For real time meter data, PG&E used real time equipment to harvest meter data from end use sites transmit to the CAISO. Transmit meter data in 4-seconds. Communication must be running at all times even without DR bids. Setup node points in CAISOs EMS and Full Network Model (FNM) database. For notification of a dispatch events, once CAISO initiates the event, Auto-DR triggers the customers pre-determined load shed strategies within the customers EMS and sends an alerting the customer of an event.

8 Pilot Operations Pilot ran from July 29 th to October 31 st Day-Ahead Non-Spinning Bid during Monday – Friday Bid in as both contingency and economic

9 Example of PLP Event

10 Lessons: Technology Successful system integration: Real-time (4-second instantaneous) data delivered from customers site to CAISO EMS systems Seamless dispatch from CAISO to customers Customers did not recognize that an event was dispatched Feedback mechanism control between Auto-DR server to customer

11 Lessons: Operations Customers responded when called by the CAISO On average, resources were able to respond within 4 minutes of receiving the dispatches A total 16+ hours were called for non- spinning reserves More experience should lead to less forecasting errors

12 Lessons: End Use Resources Retail and office building customers are ideal candidates Dominant use of HVAC load Industrial participant less predictable High customer satisfaction: Since everything was automated, customers felt participation was easier Events were relatively short and not disruptive

13 Next Steps 2Q 2010: Continue to work on rules surrounding direct participation with the CPUC 3Q 2010: CAISO is scheduled to release and operate Proxy Demand Resource which will allow direct participation 1Q 2011: Field study for pilot demonstration on intermittent renewables 1Q 2011: Submit 2012 – 2014 DR portfolio proposal to CPUC. Portfolio will include programs that will have mechanism for bidding into wholesale market

14 Questions Steve McCarty Director – IDSM Portfolio Optimization & Metrics PG&E