California Public Utility Commission Order – Demand Flexibility Through Electric Rates

Published: December 15, 2022

California Public Utility Commission recently initiated an Order Instituting Rulemaking to advance Demand Flexibility Through Electric Rates (OIR 22-07-005.) The first round of comments included general support for the CalFUSE think piece offered by Energy Division staff. (See the this post.)

One of the questions posed in the scoping for the Rulemaking was, “Should the Commission expand any of the existing dynamic rate pilots as a near-term solution to benefit system reliability?” Two pilots are underway: one testing the CalFUSE approach to dynamic rate setting at Southern California Edison(SCE) , the other testing a seven-day-look-ahead, dynamic price for planning agricultural pumping at Valley Clean Energy, a Northern California CCA, and PG&E. TeMix is supplying the transactive energy platform for both pilots.

TeMix submitted the following comments in response to the dynamic rates pilots’ question:

“SCE CalFUSE pilot should be fully funded to support participation by all interested CCAs in the SCE service territory. As soon as possible, the experimental tariff should be made available without shadow billing to reduce the complexity of the pilot and speed its adoption by all parties including device vendors, automation service providers and all customers with flexible devices and especially electric vehicles and distributed storage. Equivalent pilots should be initiated with PG&E and SDG&E and their CCAs. The agricultural pumping pilot by PG&E and VCE should be expanded to other IOUs and CCAs and to incorporate other flexible devices such as electric vehicles and distribution storage.”

This point of view was supported by SCE and PG&E. Further, in response to Question 4 of the ruling, the California Community Choice Association (CalCCA) said,

“given the initial success of the AgFIT Pilot in shifting load during ramp and peak hours, the Commission should immediately take advantage of this “low hanging fruit” – i.e., the unique combination of large load shift opportunity under the control of relatively few agricultural customers with load automation technology that ties to 3 dynamic pricing signals. The Commission should prioritize immediately expanding this contributor to grid reliability benefits to other load serving entity (LSE) service areas and more customers on an opt-in basis. The voluntary AgFIT Pilot should be expanded to other service areas on an opt-in basis by LSE. The initial duration of the expansion should be for five years, with a potential for extensions or modifications, based on data analysis. CalCCA recommends the expansion of the AgFIT Pilot up to 500 MW, which is approximately equal to the load shift potential identified in the LBNL study for agricultural pumping and processing, converted from gigawatt-hours to MW of peak load. Customer eligibility should be broad and inclusive, with all types of agricultural customer load (i.e., not only irrigation pumping) being eligible to participate. As with VCE’s AgFIT Pilot, evaluation of results of the expanded pilot (at the mid and end-points) should be performed by an independent, third-party, with opportunity for guidance and input from Energy Division and the participating LSEs. The design of the dynamic rates for the expanded pilot can be based on Steps 2 – of the 6-step “Distributed Energy Resource & Demand Flexibility roadmap” (UNIDE).

See the this post for the UNIDE roadmap.


The middle row shows the tendered retail electricity price in $/kWh for the next 5-minute, 15-minute and one-hour intervals up to the last hour of tomorrow. The start time for each interval is shown in the top row. The prices use current wholesale California ISO locational prices for the Moorpark Southern California Edison transmission substation augmented by scarcity prices for distribution, resource adequacy and flexible resource adequacy based on an experimental tariff. The bottom row shows the forecasted marginal Lbs of CO2 or Green House Gases (GHG) released per kWh for the same intervals. The CHG estimates are from The ticker automatically updates from time to time based on the California ISO publication schedule.