SCE Dynamic Rate Demonstration
In response to Gov. Newsom’s emergency proclamation in 2021 to ‘ensure the reliability of electrical service during extreme weather events,’ the California Public Utility Commission (CPUC) authorized SCE to demonstrate the CPUC led CalFUSE dynamic pricing framework (linked here), using TeMix Incorporated’s Software-as-a-Service (SaaS) solution. The proposed demonstration is designed to provide a near term solution to address the longer-term challenges associated with the State’s energy transformation, help integrate renewables, reduce GHG emissions, improve system reliability, and reduce or minimize cost of service.
SCE intends to conduct a comprehensive demonstration study of the CalFUSE framework across multiple use-cases and assess how the three-part policy framework can deliver standardized price access, dynamic electricity prices linked to real time grid conditions & economics, and customer options to manage and optimize energy usage and bills. SCE also believes that the demonstration can provide a forum to explore options for both transactive price models and real time pricing with other parties and stakeholders, and demonstrate how new forms of distributed energy resources can act as both customer assets and grid interactive resources.
This demonstration will develop a novel approach to demand flexibility management, expanding on the solutions needed for future electric system reliability while meeting the executive guidance of Gov. Newsom’s order to improve system reliability. These goals include:
- The challenges associated with the ongoing transformation of the electricity system resulting from the expected high penetration of renewables, electrification of buildings and transportation, and deployment of behind-the-meter (BTM) distributed energy resources (DERs),
- The significant opportunity involving demand-side flexibility enabled by widespread electrification and customer DER deployment, and its potential to integrate renewables and reduce GHG emissions, improve system reliability, and reduce or minimize cost of service, and
- The limitations associated with the traditional approach to demand response and retail rate design that curtail the demand-side potential described above, suggesting a need for a fresh approach.
Below is a link to the CPUC decision authorizing the SCE Dynamic Rate Pilot
CPUC Decision D.21-12-015 (issued December 6, 2021)
We grant SCE authorization to use TeMix’s RATES platform for a three-year (2022-2024) dynamic pricing pilot in SCE’s territory, and grant SCE its requested $2.5 million for the pilot. The pilot is intended to assist in assessing the costs and benefits of real-time rates, including required infrastructure, manufacturer interest and customer impacts. SCE shall administer the pilot under its DR Emerging Markets and Technologies program authorized in D.17-12-003.
SCE is encouraged to enroll residential, commercial, and industrial customers in this exciting CalFUSE demonstration. SCE will work through Automation Service Providers (ASPs) with existing relationships with these customer types and previously installed automation software or hardware at these customers’ dwellings to streamline customers’ involvement.
Upon entering the demonstration, each customer will be provided a tailored subscription for their monthly electricity use; based on an analysis of their historical usage. Then, throughout the pilot, via their ASP, the customer will receive highly-dynamic energy rates; that reflect grid conditions and they will be able to make either buy or sell transactions leveraging this subscription to better meet their operational needs against the needs of the local grid conditions.
The key operational tasks of the demonstration will be to automate the creation of dynamic prices for the generation and delivery components of a transactive tariff, and present these composite dynamic hourly prices via an internet-based secure pathway to be accessed by retail customers, wholesale market participants, and automated services platforms for distributed energy resources (DERs).
Customers and their end use devices would be connected to the TeMix cloud platform to receive price tenders either directly, via local management, or from aggregated management signals from third-party automated services platform clouds via Internet/Wifi/LTE to the secure receivers at the customer site.
The pilot is authorized for three years (2022-2024), starting no later than May 1, 2022, and may be permanently extended after the initial period pending approval by the CPUC.
Billing and Incentive Payment
While on the demonstration, customers will remain on and continue to be billed in accordance with their Otherwise Applicable Tariff (OAT). Concurrently, TeMix will configure the platform to calculate and provide monthly bill amounts based on the hourly price signals provided to customers participating. Any customer savings recognized from the hourly price signals compared to the customer’s OAT will be provided to the customer on at least an annual basis.
Per D.21-12-015, the CPUC encouraged SCE to use a “shadow bill” to limit any impact on customers. At the same time, incentivize customers for their participation in the demonstration. The decision sets out terms that allow SCE to compare the shadow bill against the customer’s normally calculated bill and provide an incentive payment if the difference favors the customer.
D.12-21-015 required SCE to submit a Tier 2 Advice Letter no later than 30 days after the decision’s issue date that includes, but is not limited to, the following elements: (1) pilot scope, (2) pilot partners, (3) shadow bill implementation, (4) pilot dates, and (5) pilot tariff design. Attached here for ease of access: