This week the California State Assembly will consider Senate Bill 1414 (Wolk). What’s so exciting about SB 1414? This bill will accelerate the use of demand response (DR), a voluntary and cost-friendly program that relies on people and technology, not power plants, to meet California’s rising electricity needs.
DR programs compensate people and businesses who volunteer to use less electricity when supplies on the power grid are tight and/or to shift energy use when cleaner, renewable resources are available. Every time a customer participates in lowering their energy use through demand response, they are rewarded with a credit on their electricity bill.
The implementation of demand response will help catalyze a much needed upgrade to our outdated grid, whose fundamental design hasn’t been updated since Thomas Edison invented it over a century ago. Demand response can empower participants to lower their electricity bills and carbon footprints, improve air quality, allow for more renewable electricity, and enhance electric grid reliability. In a tree of options for modernizing and cleaning up our energy system, demand response is a low-hanging-fruit.
Yet in California, the law that governs Resource Adequacy (a fancy phrase meaning short-term electricity planning) only requires electric utilities to contemplate investments in costly generation, i.e. power plants – not clean technologies and innovative approaches like demand response.
SB 1414 will correct this shortcoming and, in doing so, will help bring more demand response onto the power grid. SB 1414 directs the Public Utilities Commission and utilities to consider demand response as a partner in planning how to balance the power grid. This makes sense because asking people to dial down their energy demand can help take the place of ramping up power plants, like two sides of the same coin.
Similarly, increasing the use of this innovative resource on the electric system can help bring on more renewable generation, reduce the need for “peaker” power plants (very inefficient fossil fuel-fired power plants that only run a few hours each year), and enhance electric grid reliability – more practically and at a lower cost than relying on power plants alone.
Why Else Would California Want More Demand Response?
Rewarding people who use less power during high-demand times (when electricity prices are at their highest) through demand response incents homes and businesses to voluntarily conserve electricity when it matters most. Plus, DR programs can use technologies, like the Nest thermostat, that come equipped with set-it-and-forget-it programming and the option to decline the conservation request altogether. With these options, participants can save money and always remain in control of their energy needs. And SB 1414 ensures that consumer protection rules are in place for these good actors.
Further, demand response can help California meet its goal of 33% renewable energy by 2030 by encouraging people to use non-essential devices, like swimming pool pumps and defrosters, when renewable energy is available and abundant. It is a clean, flexible, and low-cost way to help address the rising energy needs in Southern California following the closure of San Onofre Nuclear Generating Station (SONGS) and the Once-Through-Cooling (OTC) plants.
It’s Time for California to Get in the Running on Demand Response
California has recognized the importance of this technology in its Loading Order for Electricity Resources, wherein the state prioritizes the use of demand response before conventional power plants (and even before renewables), as well as in the state Energy Action Plan.
Yet most other states and regions have far more demand response available. New England’s programs, for example, enable more than double the demand response participating than those of California. Only Texas and other states in the Southwest lag behind the Golden State.
With the closure of SONGS and the OTC plants, it’s time for California to get serious, get in the running, and ultimately lead on demand response. EDF urges the California Assembly to vote “yes” on SB 1414 to harness the power of this versatile technology to build a cleaner, more resilient, low-carbon electricity system.