Findings of Fact

1. Distributed generation will provide end-users with additional choices to supply their electricity needs.

2. California is in the midst of a generation shortage, and new generation, large and small, provides substantial value in addressing that shortage.

3. Section 399.15 directs the Commission to adopt "differential incentives for renewable or super clean distributed generation resources."

4. Current standby rate design differs significantly among utilities and is quite complex.

5. Today a customer who has installed generation (either a QF or other distributed generation customer) must take standby service under one of the utility's tariffs.

6. Net energy metering allows certain customers with wind and solar facilities to avoid standby rates.

7. Physical assurance is the application of devices and equipment that interrupt a distributed generation customer's normal load when distributed generation does not operate.

8. Standby rates should be cost-based.

9. Supplemental power is supplied by the utility to a customer whose onsite source of generation does not regularly supply all the power necessary at their premises. The utility must plan to serve supplemental power loads.

10. Backup service is supplied by the utility in lieu of generation normally provided by the customer's onsite generation facilities during periods of unscheduled outages.

11. Backup service is available instantaneously and effectively requires the utility to plan to serve the diversified load of backup standby customers at all times.

12. Maintenance service is scheduled by the customer with the utility to replace onsite generation when the customer's generating facilities are scheduled to be out of service.

13. Diversity levels represent a statistical assumption that a certain percentage of standby load will be utilizing transmission and distribution service at a particular time.

14. Distribution system costs to serve backup standby customers appear to be both fixed and variable, in nature, but the record in this case is insufficient to identify specifically which costs are fixed and which are variable.

15. If a customer is willing to provide physical assurance, the utility will not install facilities to serve the load ordinarily served by the onsite generator so costs associated with serving that customer will either be very limited or nonexistent.

16. The utility must construct distribution facilities to ensure that the diversified load from customers taking on-demand backup service can be served.

17. There is no evidence that distributed generation deployment will soon cause significant stranded distribution costs.

18. Service associated with backup and maintenance power is intended to be intermittent in nature.

19. There is no standard peak period on distribution circuits.

20. Certain peak demand-related distribution costs, like substation capacity and transformation, vary with use of the system and can be avoided.

21. Maintenance service is arranged at a time when capacity is already available, so the utility will not need to build infrastructure to meet maintenance power loads assuming the customer provided physical assurance.

22. It is possible to estimate the probability of multiple distributed generation units being out of service on the same circuit simultaneously.

23. Diversity reduces transmission infrastructure requirements.

24. Diversity may ultimately reduce distribution infrastructure requirements on a given circuit; however, those benefits have not yet been demonstrated.

25. There are valid concerns regarding the potential for differences in the diversity on the transmission system compared to the distribution system.

26. Public purpose costs are collected volumetrically under current rates.

27. A distributed generation customer taking standby service may not necessarily provide measurable grid benefits.

28. Distributed generation customers providing grid benefits may elect not to take standby service.

29. Solar distributed generation installations under 1 MW impose negligible interconnection costs on the utility system.

30. Small solar generating units will represent far less than one percent of California's peak demand requirements.

31. Reliable solar distributed generation will produce electricity coincident with peak demand for electricity.

32. Increased deployment of solar distributed generation will provide a generation benefit by reducing peak electricity demand.

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