7. Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and Dorothy J. Duda is the assigned Administrative Law Judge to this portion of the proceeding.

1. The SGIP Handbook limits the scope of renewable fuels eligible for Level 2 incentives to those that are on-site.

2. In Resolution E-4193 regarding RPS, the Commission granted PG&E the ability to procure directed biogas from an out-of-state facility that creates the gas and injects it into the natural gas pipeline.

3. As stated in D.01-03-073, the intent of SGIP is to encourage deployment of DG to reduce peak electric demand, give preference to new renewable energy capacity, and ensure deployment of clean DG technologies.

4. Pub. Util. Code § 379.6(g) requires the Commission to pay an additional incentive of 20 percent for the installation of DG resources from a California supplier, as defined in that section.

5. Bloom filed its petition more than one year from the date of D.01-03-073 which it seeks to modify.

1. Bloom's petition should be accepted for consideration because of recent changes regarding the availability of renewable fuels transported by pipeline.

2. Allowing directed biogas to qualify as a renewable fuel under SGIP is consistent with treatment of biogas in the RPS program and has the potential to increase participation in SGIP by renewable fuel technologies, increase the amount of electricity produced by renewable generating facilities in California, and increase the market for biogas in California.

3. Bloom's petition to allow directed biogas to qualify for SGIP Level 2 incentives can further SGIP goals.

4. Bloom's petition should be granted as long as it is modified to require directed biogas to meet local utility injection standards consistent with RPS delivery requirements for biogas injections as currently in effect.

5. The ability to qualify for Level 2 incentives for using directed biogas should not be limited to fuel cells but should apply to all eligible gas-fired generators under the program.

6. The 20 percent "California adder" should be calculated on the base incentive of $2.50 per watt applicable to the installation of a DG non-renewable fuel cell project. If a facility uses renewable fuel and thus qualifies for a Level 2 incentive, the additional $2.00 per watt incentive for fuel cells operating on renewable fuel will be added after the 20 percent California adder.



1. The petition filed by Bloom Energy Corporation to modify Decision 01-03-073 is granted as modified below.

2. The Self Generation Incentive Program program administrators shall implement program handbook revisions, as set forth in Appendix A, which contains the following modifications in Sections 5 through 9:

· The gas must be injected into a natural gas pipeline system that is either within the Western Electricity Coordinating Council region or interconnected to a natural gas pipeline in the Western Electricity Coordinating Council region that delivers gas into California.

· The gas must be nominated for use at a facility that is Self Generation Incentive Program eligible.

· When applying for Self Generation Incentive Program funding, the applicant shall include: 1) an attestation from the facility operator of its intent to procure directed biogas and 2) an attestation from the fuel supplier that the fuel meets currently applicable Renewable Portfolio Standard eligibility requirements for biogas injections.

c) The 20 percent adder for using a California supplier of Distributed Generation resources, as defined in Pub. Util. Code § 379.6(g) shall be calculated on the non-renewable Distributed Generation facility rate of $2.50 per watt before adding the additional $2.00 per watt incentive for using renewable fuel.

3. Rulemaking 08-03-008 remains open.

This order is effective today.

Dated September 24, 2009, at San Francisco, California.



(Note: Commission additions are shown in underline.)

The SGIP Program Administrators manage the SGIP Handbook, and changes are normally made to the Handbook by obtaining the agreement of the SGIP Working Group. The proposed revisions to the 2009 SGIP Handbook to enable Directed Biogas are provided below:

1) Remove all references to "onsite" that are superfluous

Affected Sections:

2) Insert gas verification protocols:

Add the following language to section 2.6.1

If the renewable fuel is delivered from off-site, the following conditions and verification protocols must be utilized:

1) Project Guidelines:

2) Reservation Request. SGIP Reservation Requests for Level 2 incentive using off-site renewable fuels must include:

3) Once the above materials are deemed adequate by the relevant SGIP PA, SGIP will grant a Conditional Reservation to the Host Customer.

4) The customer will then work in parallel to advance the project and work with the Supplier to develop and execute a binding renewable fuel contract.

5) Renewable Fuel Contract. A copy of the executed renewable fuel contract is provided to SGIP at the proof of project milestone. The following criteria must be included in the contract:

Fuel Demand Schedule for SGIP System






Period 1

Date Date




Period 2

Date Date




Period 3

Date Date




6) Incentive Claim Stage. The following information must be submitted at the Incentive Claim stage:

7) Verification, Audits, & Refund Terms. After the incentive is issued, SGIP requires a yearly audit process for five years after the renewable fuel contract commences. The audit process works as follows: at the completion of each year, the Customer must provide the SGIP Program Administrator with the preceding 12 months of invoices for renewable fuel purchases. The Program Administrator will review the invoices to ensure that the Customer is satisfying the intent to procure renewable fuel to meet at least 75% of the generator's consumption.

Audits can be conducted remotely, thereby reducing costs for the SGIP program.

8) If the Host Customer decides to change their renewable fuel Supplier, or if the Customer's current renewable fuel Supplier cannot meet the obligations to perform as set forth in their contract, then the Customer is allowed to find a new supplier within 90 days, so long as they remain in compliance with the standard Level 2 SGIP requirement (section 2.6.1) that at least 75% renewable fuel is consumed on an annual basis during this period of transition. Once Customer finds a new Supplier, then they must enter into a new contract that provides for at least 75% of the system's anticipated consumption.

9) Other.


1 Since directed biogas is "notionally delivered," auditing and verification should involve review of contracts and deliveries rather than actual consumption of the fuel.

2 RPS eligibility requirements shall pertain to the source of the biogas, the conditions of its injection, and the measurement of biogas supply only. The SGIP generating facility need not be certified as RPS eligible, nor must the electricity produced necessarily qualify for RPS.

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