California’s Integrated Demand Side Management Proposal

California’s utility regulators are proposing to take the grid a step further towards the edge.

Earlier this September, CPUC Commissioner Mike Florio released a proposal that would represent the next step towards larger deployments of grid-connected distributed energy resources (DER).

This summer saw California’s major utilities each present a Distributed Resource Plan. These explored how distributed energy resources could provide value to grid operators. Commissioner Florio’s new proposal aims to clarify how that value can be passed on to consumers through novel pricing signals and other mechanisms. This proposal, the “Decision Adopting an Expanded Scope, a Definition, and a Goal for the Integration of Demand Side Resources,” set a new goal to integrate demand side resources “that provide optimal customer and system benefits, while enabling California to reach its climate objectives.”

According to Greentech Media, the proposed decision was the result of workshops that included CNESA partner, the California Energy Storage Alliance, among other advocacy, business, and regulatory organizations.

While the actual mechanisms for compensating and sourcing demand side resources that perform grid services are yet to be discussed in future workshops, this proposal marks a further step for California on the path towards integrating demand side resources into the grid. Stem’s policy director, Ted Ko, remarked in a CPUC meeting that the proposal could allow utilities to look to their customers to provide grid services like capacity, ramping, and voltage support.

Nonetheless, some participants expressed concerns about the scope of the proposal. In particular, utilities and CAISO, the California grid operator, asked for clarification about the risks involved with decentralizing grid resources. If the resources don’t show up when they’re needed, who should be responsible? How should mechanisms be designed to ensure that the electric system is reliable?

To answer remaining questions about how specific mechanisms should be designed, the CPUC will hold further workshops. In a later phase, the Commission will look at potential pilot programs to provide data on sourcing and pricing mechanisms.