STAFF REPORT
City of Lancaster
CC 5
8/12/2025
TN
Date:August 12, 2025
To: Mayor Parris and City Council Members
From: George N. Harris II, Senior Director/Treasurer – Admin Services Subject: Approve the Lancaster Energy Residential Peak Demand Response Incentive Program.
Recommendation:
Approve the Lancaster Energy Residential Peak Demand Response Incentive Program and Authorize the City Manager or his designee to negotiate and execute program contracts and policies, if applicable, on behalf of the City with concurrence from the City Attorney.
G.C. Section 84308: No
Fiscal Impact:
There is no fiscal impact on the General Fund associated with this action. The incentive program is designed to help residential customers lower their electricity bills, by offering reduced energy rates in the summer months. In return, customers are asked to shift or reduce their energy use on called peak energy days when demand on the grid is forecasted to be high.
Background:
On October 25, 2022, the City Council approved a set of agreements for the Lancaster Power Choice Solar and Battery Residential Program. The City, Participate Energy (PE), and Tesla developed the Lancaster Energy Power Choice Program, which provides developers and existing homeowners with a zero-up-front cost option to install solar and batteries for energy cost savings, backup, and participation in grid services. The Lancaster Energy Power Choice program empowers residents with the benefits of solar energy and was designed to help customers save on their monthly energy bills, maintain reliable backup power in the event of outages, and support Lancaster Energy in reducing grid stress during peak demand periods. 2 1
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While the Lancaster Power Choice Program has been helpful for most residents, the structure of the program did not present a financially logical option for California Alternate Rates for Energy (CARE) customers. CARE is a program which provides income-qualified households with discounted utility rates. Many CARE customers found that participating in the standard program could result in higher monthly costs compared to their existing CARE benefits.
To address this gap and ensure equitable access, the City launched Lancaster Power Choice CARE in April 2025, an income-qualified version of the program that enables eligible residents to receive solar and battery storage systems with no upfront costs or credit checks, at approximately half the cost of the traditional Power Choice Program. The program is administered in alignment with the California Public Utilities Commission’s (CPUC) Self-Generation Incentive Program (SGIP) and includes assistance with enrollment, technical support, and funding access for related upgrades.
As a condition of SGIP participation, the CPUC requires that customers also enroll in an approved Demand Response (DR) program for a minimum of five years. To comply with this requirement and ensure program eligibility, the City has developed the Lancaster Residential Peak Demand Response Incentive Program.
This DR program supports grid reliability and encourages residents to reduce electricity usage during peak periods by offering:
Lower baseline energy rates during non-event periods.
Incentivized rate signals during peak demand periods (typically 4:00 p.m. to 9:00 p.m.) when a DR event is called.
Load Reduction Adder Charges for electricity drawn from the grid during event periods, to encourage conservation or battery discharge.
Lancaster Energy staff may call up to 15 DR events per calendar year. These efforts align with CPUC’s statewide objectives to manage grid stress, prevent outages, and reduce reliance on fossil- fuel peaker plants.
Attachment:
Lancaster Energy FlexWise Terms and Conditions draft