FW: Load Profile Eligibility, from PG&E



> -----Original Message-----
> From:	MELJ%GIR%BCS@bangate.pge.com [SMTP:MELJ%GIR%BCS@bangate.pge.com]
> Sent:	Monday, July 28, 1997 11:11 AM
> To:	iobstfeld@msn.com; blunden@gmpvt.com; jsole@hooked.net;
> johnf@epsusa.com; pss24@paylessshoesource.com; Price, James E.;
> pss24@paylessshoesource.com; jlondon@wafs.com; judypau@aol.com;
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> coonsk@connext.com; kgoeke@worldnet.att.net;
> klackey@edison-source.com; lbaldewin@edison-source.com;
> lvanwage@sdge.com; meb1@rlw.com
> Subject:	Load Profile Eligibility
> 
> Due to email difficulties, many (if not all) of you did not receive
> friday's 
> attempted electronic distribution of the supplemental workshop report
> on load 
> profile elgibility.  Please confirm receipt of this message by reply
> email 
> addressed to either "melj@pge.com" or to the reply path which appears 
> automatically for this message on your system.
> 
> Attached please find the report document only, in both MS Word and
> ASCII text 
> formats. I will be sending the report attachments in 2 upcoming
> emails, as 
> many email servers appear to have difficulty with total file
> attachment size. 
>  If you do not receive or are unable to read any of these documents,
> please 
> look for them on the DA/Load Profile Methodologies Web page later
> today.
> 
> Thank you for your patience.  Please note that parties have the
> opportunity to 
> comment directly to the CPUC on this report by August 8th.
> 
> Matt Lecar
> PG&E
> (415)973-1643
> BEFORE THE PUBLIC UTILITIES COMMISSION
> 	OF THE STATE OF CALIFORNIA
> 
> 
> ____________________________________
> Order Instituting Rulemaking on the		)
> Commission's Proposed Policies		)
> Governing Restructuring California's   	)	R. 94-04-031
> Electric Services Industry and		)
> Reforming Regulation				)
> ____________________________________)
> Order Instituting Investigation on		)
> the Commission's Proposed Policies		)
> Governing Restructuring California's		)	I. 94-04-032
> Electric Services Industry and		)
> Reforming Regulation				)
> 						)
> ____________________________________)
> 
> 
> 
> 
> 
> 
> 
> 
> SUPPLEMENT TO THE REPORT ON THE JUNE 5, 1997 DIRECT ACCESS WORKSHOP ON
> LOAD PROFILING:  ELIGIBILITY ISSUES
> 
> 
> Submitted by Pacific Gas and Electric Company (U 39E),
> San Diego Gas and Electric Company (U 902E), and
> Southern California Edison Company (U 338E)
> 
> 
> 
> 
> 					ROGER J. PETERS
> 					PETER OUBORG	
> 					Law Department
> 					PACIFIC GAS AND ELECTRIC COMPANY
> 					P. O. Box 7442
> 					San Francisco, CA  94120
> 					Telephone:  (415) 973-2286
> 					Fax: (415) 973-5520
> 					Attorneys for
> 					PACIFIC GAS AND ELECTRIC COMPANY
> July 25, 1997
> 
> 1. INTRODUCTION
> 
> On  June 5, 1997, Pacific Gas and Electric Company (PG&E), Southern
> California Edison Company (Edison), and San Diego Gas and Electric
> Company (SDG&E) (the Utility Distribution Companies (UDCs)), jointly
> convened a public workshop to discuss methodologies for the
> development and implementation of statistical load profiles for use in
> Direct Access.  As ordered in the Commission's decision on Direct
> Access (D. 97-05-040), this workshop was to "[C]onsider allowing the
> development of specific load profiles to include some customers whose
> maximum demand is at or above 20 kW but below 50 kW."  In a workshop
> report, filed with the Commission on  June 16, 1997, the UDCs stated
> that issues related to load profile eligibility and any exemptions
> from the hourly metering requirement for Direct Access customers with
> maximum demands between 20 and 50 kW were being deferred to a
> follow-on workshop to be held within 30 days.  
> On the morning of July 16, 1997, after due notice to all participants
> in the Load Profiling Workshop process and to parties on the formal
> Restructure service list, the UDCs convened a follow-on workshop
> devoted exclusively to issues of load profile eligibility.  A number
> of active participants at the Load Profile Workshop also attended the
> eligibility discussion.  Workshop attendees represented California
> state regulatory agencies, large and small customer representatives,
> potential energy service providers and aggregators, energy industry
> consultants, and metering systems providers.  A list of all
> participants in the Load Profiling Workshop process is provided in
> Attachment A.  The meeting was facilitated by Dawn Tiura of The Denali
> Group, Inc., a consultant hired for this purpose, and proceeded
> according to the final agenda (see Attachment B).
> Representatives from the UDCs presented concerns with the extension of
> load profile eligibility to medium-sized customers and identified
> conditions under which an interim or temporary eligibility exemption
> regime could be acceptable.  PG&E and SDG&E generally recommend an
> "Interim Blanket Exemption" approach that would allow the use of
> statistical load profiling for all Direct Access customers up to 50
> kW, on an interim basis (i.e. during 1998), conditioned upon an
> agreement that parties support the UDCs' simplified interim load
> profiling methodology proposal. 
> Edison opposes this blanket approach and suggests that a "Temporary
> Backlog Exemption" may be appropriate, specifically targeted to those
> customers between 20 and 50 kW who are temporarily unable to procure a
> meter due to the existence of a significant UDC "meter backlog queue."
> Such a queue could develop due to a delay in Commission-approved
> standards for non-UDC metering and meter installations, if UDCs are
> unable to obtain and put in place sufficient resources for installing
> DA compatible meters to meet the full demand of customers in the 20 to
> 50 kW size range in a timely manner.  Absent the need for such a
> temporary exemption, Edison recommends that no exemptions be granted
> to the 20 kW threshold for load profile eligibility.  CLECA and CMA
> support the "No Exemptions" position.
> All three UDCs predicate their proposals on several assumptions about
> load profile application and ratemaking treatment.  One key assumption
> is that the same unique load profile will be used for a customer in
> both ISO settlements with Scheduling Coordinators and the PX and in
> UDC billing/crediting of PX charges.  All parties to the Load Profile
> workshop and the eligibility workshop support this proposal.
> Additionally, the UDCs' proposals assume that the Commission will
> adopt the UDCs' residual CTC calculation methodology for Direct Access
> customers with hourly metering.1
> A fourth proposal was put forward by the Department of General
> Services (DGS), SPURR-REMAC, the Office of Ratepayer Advocates (ORA),
> the California Retailers' Association (CRA), and the California Farm
> Bureau (CFB) (the Joint Proponents), included as Attachment C.  These
> parties propose to extend load profile eligibility indefinitely, for
> all customers up to 50 kW maximum demand and below a threshold
> consumption level of 200,000 kWh per year (based on available
> historical average usage data).  This threshold eligibility level is
> based on considerations of meter affordability, assuming a two-year
> pay-back from estimated potential savings levels for customers
> electing Direct Access. 
> CellNet proposes that another consumption level, other than 200,000
> kWh, could alternatively be employed.  CellNet also proposes that, in
> the interests of fairness and simplicity, a non-demand metered
> customer's eligibility could be determined using load profile
> information to develop proxy monthly peak demands.  
> Following presentations of each of these proposals, the remainder of
> the workshop was devoted to discussion.  The following sections of
> this report identify the major arguments raised for and against each
> proposal. A number of parties believe that, absent any
> Commission-approved rules on metering exemptions, some customers with
> demands in this range may be unable to afford or obtain a meter on
> January 1, 1998, and would therefore be at least temporarily precluded
> from taking Direct Access.  Accordingly, a Commission decision is
> needed to resolve whether any exemptions should be granted to the
> metering requirement for Direct Access customers between 20 and 50 kW
> maximum demand, and if so, how such exemptions should be determined.
> 
>  2. UDC PROPOSALS
> 	The UDC proposals for load profile eligibility and Direct Access
> (DA) metering requirement exemptions reflect an attempt to answer
> concerns raised regarding those customers between 20 and 50 kW maximum
> demand who may be precluded from obtaining Direct Access as a result
> of a lack of either affordability or availability of DA metering.
> The affordability concern stems from a belief that DA-compatible
> metering, once approved by the Commission, may prove cost prohibitive
> for certain types of customers between 20 and 50 kW, particularly
> customers with low load factors (i.e. customers with low kWh
> consumption relative to their maximum demands).  At a given demand
> level, low load factor customers will have lower kWh consumption and
> bills, and therefore may experience smaller Direct Access savings over
> which to amortize the cost of new metering (including hardware,
> software, installation, meter reading, data management, and meter
> maintenance costs).
> 	A second argument that parties put forward for extending the
> load profile eligibility threshold is the fear that sufficient meters
> or meter installation capacity will not be available in the early
> months of 1998 to meet market demand.  This may be the case either due
> to a lack of approved standards for non-UDC metering and meter
> installations, coupled with a lack of sufficient UDC resources to meet
> market metering demand, or due to a lack of availability of DA
> compatible metering and/or meter installation expertise in the early
> stages of a competitive marketplace.  While some ESPs believe that
> meter availability will be a serious problem, meter manufacturers and
> large customer groups assert the market will be able to fully meet the
> demand for DA compatible meters at prices below the UDCs tariff
> metering charges.2 
> 	All three UDCs and many other parties at the workshop also share
> a concern that the accuracy of the load profiling methodology will
> naturally decline with increasing customer size, due to the greater
> variability in usage patterns of larger customers.  Extending load
> profile eligibility to customers above 20 kW is therefore likely to
> contribute larger volumes of Unaccounted For Energy (UFE) attributable
> to load profile error, which must be allocated administratively by the
> ISO.  CLECA and CMA argue that eligibility exemptions should be
> deferred until the ISO's software is sufficiently advanced to handle
> the proposed separation of load profile error from other sources of
> UFE.3
> 
> Southern California Edison
> 	Edison's presentation (included as attachment D) lays out an
> analysis, assuming a metering charge of $15/month and 10% savings for
> Direct Access (versus a 2.4 cent/kWh average PX price).  Edison
> estimates, based on these assumptions, that perhaps as few as 15,000
> of Edison's approximately 100,000 customers between 20 and 50 kW would
> find it cost prohibitive to purchase a DA meter.4  Furthermore, Edison
> contends that these same low load factor customers are generally
> cross-subsidized under existing class-average bundled service rates,
> and therefore may expect to see less incentive to move to Direct
> Access than other kinds of customers, regardless of load profile
> eligibility.   Therefore, Edison believes that no exemptions need be
> made to cure affordability problems.
> 	With respect to availability, Edison is sympathetic to the
> potential "catch 22" of requiring customers to obtain metering to be
> eligible for Direct Access, should Edison be unable to provide meter
> installations in a timely fashion prior to approval of metering
> standards.  In response to this concern, Edison suggests that load
> profile eligibility could be extended on a temporary basis for
> individual customers less than 50 kW maximum demand who request DA
> metering from Edison, during such time as these customers find
> themselves in a backlog queue awaiting meter installation.  This
> Temporary Backlog Exemption would be eliminated following Commission
> approval of standards for competitive metering and meter
> installations, to allow the market to accommodate customer demand for
> DA metering.
> 	Edison's chief concern with exempting any additional customers
> from the DA metering requirement is that it may cause CTC "leakage" -
> that is, opportunities for customers to systematically shift or avoid
> CTC costs by taking advantage of the ratemaking treatment for
> transition costs for hourly metered customers.  All three UDCs believe
> that such opportunities will be magnified if CTC charges are not
> calculated on the hourly residual basis proposed in the UDCs'
> Ratesetting Unbundling applications, or if different load profiles are
> allowed to be used for ISO settlement and UDC billing/crediting of PX
> charges.   The Joint Proponents do not agree that CTC "leakage" is a
> particular concern with regard to the extension of load profile
> eligibility above 20 kW.
> 
> PG&E and SDG&E
> 	PG&E and SDG&E propose that profile eligibility be extended to
> all customers between 20 and 50 kW on an interim basis in 1998, and
> that the subject of a longer-term eligibility threshold for load
> profile use be deferred without prejudice to a proceeding in 1998
> proposed by the UDCs in the Load Profiling Workshop report.  Only
> actual experience with Direct Access implementation and the use of
> load profiling will provide the necessary data to evaluate questions
> of meter availability and affordability, and the impacts of wider load
> profile eligibility on ISO/SC and PX/UDC settlement accuracy.  In the
> interim, PG&E and SDG&E believe that parties should accept the UDCs'
> proposal for a simplified load profile methodology, using existing,
> static load shapes, developed by the UDCs, and segmented at the rate
> class level.  As stated above, all three UDCs wish to reserve their
> rights to revisit their eligibility proposals pending the outcome of
> the UDCs' proposed residual CTC calculation methodology.
> 	In answer to questions, PG&E and SDG&E stated that the proposal
> to raise load profile eligibility to 50 kW in 1998 would not lead to
> any increase in 376 costs.  PG&E also clarified that its proposal for
> the eligibility of streetlight accounts is under review.
> 
> 3.  OTHER PARTIES' PROPOSALS
> CellNet
> 	CellNet is a manufacturer of Automated Meter Reading technology
> and meter data communication systems.  CellNet presented an alternate
> proposal for determining the demand levels for non-demand metered
> customers, used in calculating the load profile threshold eligibility
> criteria.  CellNet's proposal, which differs from the UDC proposals
> for this calculation, is included as Attachment E.  
> CellNet believes that hourly metering will be cost-effective for a
> majority of customers in the 20 to 50 kW range, and that meter costs
> will decline rapidly with the advent of competition.  In order to
> incent efficient competition in metering, CellNet argues that the
> rules for determining load profile eligibility at either the 20 kW
> level or at any higher exemption threshold level must be made clear,
> fair, and simple.  Good rules will also help to mitigate gaming
> opportunities and will serve to minimize UDC implementation costs.  
> CellNet proposes that the same hourly load profile used in billing
> customers for energy be used to calculate a non-demand metered
> customer's monthly maximum demand, in order to determine whether that
> customer exceeds the demand-based eligibility threshold for the use of
> a load profile.  PG&E's 35 hp criteria for agricultural rate schedules
> and SDG&E's 12,000 kWh cutoff would instead create arbitrary
> distinctions between customers with identical loads, based solely on
> how the customers are currently classified or metered.
> 
> DGS/SPURR-REMAC/ORA/CRA/CFB
> 	DGS presented a Joint Proponents' proposal (Attachment C) aimed
> at providing blanket relief from the DA metering requirement for those
> customers between 20 and 50 kW with low load factors.  The Joint
> Proponents' analysis estimates that a 200,000 annual kWh level is
> required to recover Edison's tariff levels of metering costs, with
> estimated 5 and 10% Direct Access savings and a two year pay-back.
> The Joint Proponents propose that customers between 20 and 50 kW with
> consumption levels below 200,000 kWh per year (based on historic
> average usage) be granted a "Permanent Consumption-Based Exemption"
> from the metering requirement and be eligible for the use of load
> profiling.  Finally, the Joint Proponents express a desire for a forum
> and process for incorporating customer-generated load profile
> information, where available and verifiable, in developing new
> profiles for customers between 20 and 50 kW who might otherwise be
> required to obtain DA metering.5  
> DGS states that the Joint Proponents' exemption proposal is necessary
> in order to provide to all customers an effective opportunity to
> participate in Direct Access.  Since the parties believe installation
> of a meter will prove uneconomic for many customers with loads between
> 20 and 50 kW, they stress that a failure to make their proposed
> exemption available would create an insurmountable barrier to Direct
> Access for some customers.
> CellNet noted that the proposed 200,000 kWh threshold corresponds to a
> peak annual demand of approximately 39 kW, based on an average
> customer load factor (59%).  However, the actual peak demand for any
> individual 200,000 kWh customer could be significantly higher or
> lower.
> The Joint Proponents also voice support for the proposed Temporary
> Backlog Exemption.  The parties are also generally amenable to the
> proposed Interim Blanket Exemption, in lieu of a combination of a
> permanent exemption for customers with an annual usage under 200,000
> kWh and broader temporary exemption to address meter backlog concerns.
> However, ORA does not support the UDCs' proposals for a simplified
> load profiling methodology.
> 
> CLECA and CMA
> 	CLECA and CMA "vehemently" oppose any blanket extension of load
> profile eligibility beyond the 20 kW threshold set out by the
> Commission.  CMA voices concern that additional profiling may create
> incremental 376 costs for which the UDCs will seek recovery from all
> customers, shift other types of costs onto hourly metered customers,
> and/or create additional Unaccounted For Energy that must be allocated
> administratively to all customers by the ISO.  ISO Settlement accuracy
> will tend to be reduced (and UFE increased) as larger and larger
> customers are allowed to use load profiles.  CLECA and CMA believe
> that the market will handle meter availability on its own, and argue
> that eligibility exemptions should be deferred at least until the
> ISO's software is sufficiently advanced to handle the proposed
> separation of estimated load profile error from other sources of UFE.
> 
> The Joint Proponents counter that there has been no adequate
> demonstration that cost-shifting will occur if eligibility for load
> profiles is extended above 20 kW and that sound public policy requires
> making exemptions available to some customers.
> CLECA also expresses concern that consumption-based exemption rules
> could create significant implementation problems.  For example, as
> metering costs change over time, the Joint Proponents' calculation of
> a threshold kWh level for meter affordability would have to be
> updated, in order to reflect changing DA meter affordability
> constraints.
> 
> 4.  CONCLUSION
> 	The extension of load profile eligibility to include some or all
> customers in the 20 to 50 kW demand range is a subject of significant
> interest to many parties.  Absent an exemption from the metering
> requirement, many parties believe that some customers in this size
> range could be precluded from taking Direct Access on January 1, 1998,
> because metering is either unaffordable or unavailable for some period
> of time.  However, several parties also voice concerns that exemptions
> from the metering requirement may lead to CTC "leakage,"
> cost-shifting, and/or additional administrative Unaccounted For Energy
> allocation by the ISO.   No consensus was achieved on whether or how
> to extend load profile eligibility to customers in the 20 to 50 kW
> size range among parties to the Load Profile Eligibility Workshop.
> 	Parties ask for Commission guidance in its upcoming decision on
> Direct Access on whether and how customers in the 20 to 50 kW range
> may be exempted from the DA metering requirement and allowed to use a
> load profile, which customers should be so exempted, and for how long.
> The parties to the workshop put forward four proposals for Commission
> consideration: No Exemptions, Temporary Backlog Exemptions, an Interim
> Blanket Exemption, and a Permanent Consumption-Based Exemption.  
> Parties have an opportunity to submit further comments on this report
> on August 8, 1997.
> 				Respectfully submitted,
> 					ROGER J. PETERS
> 					PETER OUBORG	
> 
> 					By____________________
> 					    PETER OUBORG
> 					Law Department
> 					PACIFIC GAS AND ELECTRIC COMPANY
> 					P. O. Box 7442
> 					San Francisco, CA  94120
> 					Telephone:  (415) 973-2286
> 					Fax: (415) 973-5520
> 					Attorneys for
> 					PACIFIC GAS AND ELECTRIC COMPANY
> 
> July 25, 1997
> 
> PROOF OF SERVICE
> 
> 
> I am employed in the City and County of San Francisco, California.  I
> am over the age of 18 years and not a party to the within action.  My
> business address is 77 Beale Street, San Francisco, California 94105.
> On July 25, 1997, I served the within:
> 
> SUPPLEMENT TO THE REPORT ON THE JUNE 5, 1997 DIRECT ACCESS WORKSHOP ON
> LOAD PROFILING:  ELIGIBILITY ISSUES
> 
> on the parties in this action, by transmitting a true copy thereof via
> electronic mail, addressed to each member of the list of Load Profile
> Workshop participants, included as Attachment A.  I have also
> transmitted a true copy of this document by electronic mail for
> placement on the California Public Utility Commission Internet
> Website.  
> 
> I declare under penalty of perjury under the laws of the United States
> that the foregoing is true and correct.  Executed at San Francisco,
> California, on July 25, 1997.
> 
> 
> 
> __________________________________
> 							Esther Chin
> 
> 1 This methodology, proposed by the UDCs in the consolidated
> Ratesetting Unbundling applications (96-12-009, 96-12-011, 96-12-019),
> is recommended for Commission adoption in the Proposed Decision of ALJ
> Malcolm, dated July 1, 1997.  Alternate pages filed by President
> Conlon adopt a different methodology.  The UDCs believe that, absent
> Commission approval of the UDC proposed methodology, any load profile
> eligibility exemptions would create the potential for increased CTC
> collection risk-exposure.
> 2 Estimates of these charges are based on the UDCs' pro forma Direct
> Access tariffs submitted on July 15, 1997. 
> 3 This software is currently scheduled as part of the ISO's Stage II
> implementation, expected to be completed during 1998.
> 4 Other parties stated at the workshop that meter costs in the
> competitive marketplace could be lower than Edison's $15/month
> estimate, thereby further reducing meter affordability constraints.
> 5 Southland Corporation (7-11 stores) presented such a proposal at the
> Load Profile Workshop.
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