California’s Demand Response Auction Mechanism (DRAM) has brought 120 megawatts of third-party-controlled distributed energy resources into play as grid resources since it launched last year -- not a bad result for a first-of-its-kind pilot project.

But according to a lot of the companies that have won bids in the DRAM pilot’s two auctions, California’s big three investor-owned utilities should have awarded even more contracts -- and they want to know why the utilities didn’t.

In a series of protests this week, industry groups have asked the California Public Utilities Commission to examine Pacific Gas & Electric's, Southern California Edison's, and San Diego Gas & Electric’s recently released results of a second round of auctions for the DRAM program. That auction garnered just over 80 megawatts of resources, about double the number of megawatts procured in DRAM’s first auction in January, with winning companies including EnerNOC, Stem, OhmConnect and eMotorWerks.

But these same companies are now saying that utilities don’t appear to have hit their mandated goals for the DRAM program. That holds true for the number of registered participants they were meant to enroll, as well as the budgets they were authorized to spend.

In fact, in the most recent auction, PG&E and SCE only accepted about half the number of registrations that served as their upper bound under CPUC guidance, according to the Joint DR Parties, a group including Comverge, CPower, EnerNOC and EnergyHub.

While each utility met its minimum procurement targets, “the Commission has stated that the minimums are just that -- a floor, not a ceiling,” the group wrote. Specifically, the CPUC has asked that either budgets or available registrations, whichever comes first” should “serve as the upward bound on DRAM procurement, and the [investor-owned utilities] are expected to exhaust either.”

Unfortunately, it’s hard to tell how close the utilities came to spending their total budgets on DRAM, because the utilities have redacted those figures from their most recent filings, the group noted. The “limited public information” given by each utility “does not clearly demonstrate if the 2017 DRAM Pilot solicitations produced the expected results.”

This lack of information on budgets is matched by a “lack of transparency regarding the request for offer (RFO) selection process used by the [investor-owned utilities], including bid selection criteria and the criteria to determine that the auction selection process was complete,” the group wrote.

This lack of transparency has made it difficult for participating companies to know whether or not their bids failed to be accepted because they were priced too high, or because the utilities cut the auction short prematurely, Erika Diamond, vice president of energy markets for EnergyHub, said in a Tuesday interview.

“Bid evaluation criteria weren't completely transparent up front,” she said. EnergyHub, owned by, won contracts in the first DRAM auction, but failed to clear any for the second auction. “I think that there is still so much uncertainty - and our bids are informed by the information we have about how they will be evaluated.”

As for what DRAM participants would like to see changed, “The first is that the commission made it clear to the utilities they were to procure up to their budget limits or registration -- we’d like to see that completed,” she said. “And in the future, the methods and metrics for evaluating bids should be very transparent and objective, so everyone knows how their bid will be evaluated before it’s submitted.”

It’s not just companies that didn’t win second-round DRAM auction bids that are complaining to the CPUC. “There’s been quite a bit of consternation” about the results of the most recent auction, said Alan White, chief business officer of eMotorWerks, which won bids in both auctions.

All told, 11 companies, representing three-quarters of the DRAM winners to date, are involved in the recent protests to CPUC, he said. His company is part of a group called the Coalition of Demand Response Providers (Co-DRP), which also includes Dynamic Grid Council, OhmConnect and Stem, that also filed a protest this week.

Each utility has its own problems, according to the protests. PG&E, for example, “had an upper bound they were supposed to honor -- 40,000 registrations, or the budget limit of $6 million,” White said.  But the utility ended up only accepting 20,000 registrations -- a fact that PG&E only made clear to bidders after the auction had closed, he said.

SDG&E, for its part, reported that it was only able to accept about 7,000 registrations, about one-quarter of the registrations mandated for the second-round auction, he said. And Southern California Edison reported that it limited its auction based on set-asides for residential customers, leading to it accepting only 16,263 out of 42,000 registrations.

“We want to be fair to the utilities -- we don’t want to make things onerous for them,” he said. But without knowing how much supply each utility is seeking before the auction is held, it’s hard to know how to set the appropriate price for the DERs that his company is aggregating, he said. “We do need to know what the supply part of the equation is -- it allows us to go about bidding without playing 'pin the tail on the donkey.'”

The overarching problems with this lack of transparency is that the DRAM program is meant to serve as a model, Anthony Harrison, regulatory affairs manager at Stem, said in a Tuesday interview. That’s because it’s part of a broader effort in California to move away from demand response programs run entirely by utilities, and more toward an open-market system with access to many different third parties, he said.

“The intent behind this was not to protest the awards that were given,” he said -- a point made by all the groups that filed protests this week. “It’s really more about understanding the decision-making process, to ensure we have fair market competition.”

Stem won bids in both the first and second-round DRAM auctions, he noted.  But those wins came in the context of utility rules that “weren’t shared and aren’t transparent to the market. And that affects our bidding strategy. […] Given that this is a pilot, we need to get the key learning terms.”