California energy regulators approved a more systematic, automated approach to harnessing timely energy reductions at homes and businesses, one month after such coordinated actions helped the state keep the lights on during a heat wave-driven grid emergency.

The California Energy Commission, or CEC, on Oct. 12 unanimously adopted updates to the state's load management standards, designed to enable utility customers to more effectively support the power grid, reduce greenhouse gas emissions and save money.

"We're basically stepping into the digital age," Commissioner Andrew McAllister, who led the effort to update standards, said Oct. 13 during a media briefing. "Our economy runs on low-cost communications technology that's pretty pervasive. And so we're just applying that in this realm and taking advantage of it to bring cost reductions and higher reliability of the grid."

The action requires the state's largest retail electricity suppliers to upload and continually update their time-of-use rates on the CEC's automated database, dubbed the Market Informed Demand Automation Server, or MIDAS; to develop new voluntary rates that change at least hourly to reflect emissions and grid costs; and to educate customers about dynamic electric rates and automation technology.

The updated standards apply to California's big investor-owned utilities: PG&E Corp. operating arm Pacific Gas and Electric Co., Edison International subsidiary Southern California Edison Co. and Sempra affiliate San Diego Gas & Electric Co. They also apply to the state's two largest municipal utilities, Los Angeles Department of Water and Power and Sacramento Municipal Utility District, as well as the Clean Power Alliance, Central Coast Community Energy and other large local-government run aggregators.

While time-dependent rate information already is publicly available, McAllister called it a frustration to have to "dig through utility websites and scrape PDFs" to find and analyze that data. "It's very laborious, and so what this does is put it all in one place and require the utilities to put it online in a standardized format that is accessible ... and automatable," McAllister said.

McAllister pointed to a possible far-reaching multiplication of grid-reactive consumer devices — ranging from home batteries and smart thermostats to water heaters, pool pumps and electric vehicle chargers — that could interface with the existing MIDAS platform. Future appliance standards could further facilitate that with a potential mandate for "native load flexibility," McAllister said.

Demand response demonstrated its enormous potential in California during the recent heat wave. On Sept. 6, the day the California ISO, the state's main transmission grid operator, registered an all-time high for electricity demand of 52,061 MW, an emergency text message from Gov. Gavin Newsom's office triggered a 2,000-MW drop in demand over half an hour during peak demand.

Decision applauded; results take time

Providing more real-time pricing information "will help consumers manage their energy use, reduce their energy bills, and lead to more automation," OhmConnect Inc. CEO Cisco DeVries said in an Oct. 13 email.

The Oakland, Calif.-based company pays households to reduce their power consumption when the grid is stressed and then bids those savings into wholesale power markets. OhmConnect had a significant impact during the recent heat wave: The company said that from Aug. 31 to Sept. 9, its more than 200,000 active members in California saved 1.5 GWh of energy, equal to taking an estimated million homes off the grid for an hour, and earned over $2.7 million in rewards.

DeVries has called for California energy regulators to do more to integrate flexible demand into daily grid operations as a fundamental resource, not primarily as an emergency asset.

"This CEC decision sets the process in motion, but it will take a while before we see results," DeVries said.

The updates take effect April 1, 2023, and existing time-of-use rates must be uploaded to MIDAS in July 2023, but implementation of the new load management rates and programs does not occur until 2026 and 2027. That timeline aligns with investor-owned utility rate cases at the California Public Utilities Commission, as well as ratemaking proceedings through the governing bodies of public utilities, according to McAllister.

"But that doesn't mean that many of the benefits of the standards and the [MIDAS] tool itself won't be used prior to that," McAllister said.

Delphine Hou, director of California regulatory affairs at CAISO, called the changes a "foundational step" for end consumers to make more use of price signals to support grid reliability, emissions reductions and consumption of renewable energy when most abundant.

"The reason we really support this is because CAISO has a very powerful signal that we use to signal what the grid needs, and that is our locational marginal prices," Hou said Oct. 12 at the CEC meeting.

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