2025 California Demand Response Potential Study - Charting California’s Demand Response Future. Final Report on Phase 2 Results

California’s legislative and regulatory goals for renewable energy are changing the power grid’s dynamics. Increased variable generation resource penetration connected to the bulk power system, as well as, distributed energy resources (DERs) connected to the distribution system affect the grid’s reliable operation over many different time scales (e.g., days to hours to minutes to seconds). As the state continues this transition, it will require careful planning to ensure resources with the right characteristics are available to meet changing grid management needs. Demand response (DR) has the potential to provide important resources for keeping the electricity grid stable and efficient, to defer upgrades to generation, transmission and distribution systems, and to deliver customer economic benefits. This study estimates the potential size and cost of future DR resources for California’s three investor-owned utilities (IOUs): Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E). Our goal is to provide data-driven insights as the California Public Utilities Commission (CPUC) evaluates how to enhance DR’s role in meeting California’s resource planning needs and operational requirements. We address two fundamental questions: 1. What cost-competitive DR service types will meet California’s future grid needs as it moves towards clean energy and advanced infrastructure? 2. What is the size and cost of the expected resource base for the DR service types?