2. Background
The Commission established the Self-Generation Incentive Program (SGIP) in 2001 to provide incentives to businesses and individuals who invest in distributed generation (DG), i.e., generation installed on the customer's side of the utility meter that provides electricity for a portion or all of that customer's electric load. (See Decision (D.) 01-03-073.) The program is available to customers of Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas & Electric Company (SDG&E), and Southern California Gas Company (SoCalGas). The program is administered by these same investor-owned utilities (IOUs), except that the California Center for Sustainable Energy (CCSE) administers the program in SDG&E's service territory.
The SGIP budget was initially $125 million per year, with cost responsibility allocated across the four energy utilities noted above. With the creation of the California Solar Initiative (CSI) in 2006, the Commission redirected the portion of the SGIP budget supporting solar incentives to the CSI program. (See D.06-01-024.) As a result, the SGIP budget was reduced to
$83 million per year for 2007 and 2008 to reflect that solar incentives are now funded through CSI. (See D.06-12-033 and D.08-01-029.) Also in 2006, Assembly Bill 2778 (Stats. 2006, Ch. 617) amended Pub. Util. Code § 379.61 to limit program eligibility for SGIP incentives to qualifying wind and fuel cell distributed generation technologies, beginning January 1, 2008 through January 1, 2012.
In D.09-01-013, the Commission approved the SGIP budget for 2009 but noted that further review was required of prior years' unspent SGIP authorized budgets, or "carryover funds," which had accrued over several years of SGIP operations. On June 1, 2009, the four utilities filed detailed information on all unspent funds and pending SGIP applications, in compliance with D.09-01-013, to aid the Commission in a review of the program's budget status.
In a ruling of September 17, 2009, the assigned Administrative Law Judge (ALJ) provided a summary of the SGIP budget information provided by the utilities in their June filings, and asked parties to comment on this information and its implications for the SGIP budget for 2010 and 2011. The ruling also noted pending legislation impacting SGIP, namely Senate Bill (SB) 412, and asked for comments on that as well.
Comments were filed on September 28, 2009 by Bloom Energy (Bloom), CCSE, the California Energy Storage Alliance (CESA), Community Renewable Solutions LLC, the Commission's Division of Ratepayer Advocates (DRA), PG&E, SCE, jointly by SDG&E and SoCalGas, and UTC Power Corporation. Reply comments were filed on October 5, 2009 by the California Clean DG Coalition (CCDC), CESA, DRA, FuelCell Energy, PG&E, SCE, SoCalGas, The Utility Reform Network (TURN), and the U.S. Fuel Cell Council.
In addition, several recent events could impact the Commission's determination of the SGIP budget for 2010 and 2011. First, on October 11, 2009, the Governor signed SB 412 (Stats. of 2009, Chap. 182), which amends Pub. Util. Code § 379.6 to allow the Commission to authorize the annual collection for SGIP in 2010 and 2011 of not more than the amount authorized for SGIP in 2008. The legislation also extends administration of the program until January 1, 2016, and limits program eligibility to distributed energy resources that the Commission determines, in consultation with the California Air Resources Board, will achieve reductions in greenhouse gas emissions. According to the legislation, on January 1, 2016, the Commission shall provide repayment of all unallocated funds collected pursuant to this section to reduce ratepayer costs.
Second, Commission decisions in 2008 and 2009 expand program eligibility and incentive payments, which we should factor into our decision on the future SGIP budget. In D.08-04-049, the Commission permitted expansion of SGIP incentive payments beyond the prior 1 megawatt (MW) limit, allowing the SGIP program administrators (PAs) to use carryover funds from prior budget years to pay incentives up to 3 MW. Incentives up to 1 MW are paid at existing rates, and incentives over 1 MW and up to 3 MW are paid a lower incentive as set forth in D.08-04-049. Systems may be sized up to 5 MW, but are only paid incentives up to 3 MW. Later in 2008, the Commission issued D.08-11-044 allowing energy storage technologies to receive incentives of $2 per watt when coupled with SGIP eligible technologies. Finally, D.09-09-048 expands eligibility for SGIP incentives by allowing SGIP projects that use pipeline delivered biogas as their renewable fuel source to receive renewable (i.e., Level 2) incentives.
1 All statutory references are to the Public Utilities Code, unless otherwise noted.
