6. Other Program Issues

The ALJ Ruling contained two additional proposals as follows:

· Projects up to 5 MW in size can qualify for incentives up to 3 MW. The restriction in D.08-04-049 that incentives over 1 MW can only be paid from carryover funds would no longer apply and incentives over 1 MW may be funded from either carryover funds or the current year's budget. However, the tiered incentive rates adopted in D.08-04-049 would remain in effect.

· SGIP Program Administrators should continue to implement SGIP in accordance with all previous direction from this Commission including but not limited to allocation of funds between renewable and non-renewable projects and a 10% cap on administrative expenses.

There was no opposition to the first proposal regarding payment of incentives up to 3 MW and we will adopt it.

On the matter of continuing SGIP in accordance with previous Commission direction, DRA requests the Commission consider instituting performance-based incentives⁷ for SGIP, similar to those adopted through the CSI. In addition, DRA suggests the Commission consider reducing rebate levels offered under SGIP, and request comments on changes in eligible technologies and incentive structures before adopting a budget for 2011 and beyond. Finally, DRA proposes the Commission evaluate SCE's role as PA, and consider an alternative administrator for the SCE territory.

DRA provides provocative program suggestions that deserve discussion, but we will not delay our adoption of a 2010 and 2011 budget to consider these issues. We intend shortly to consider further SGIP modifications in order to implement SB 412, which allows payment of SGIP incentives to technologies that reduce greenhouse gas emissions. DRA may raise its program suggestions at that time.

⁷ The term "performance-based incentives" refers to the payment of incentives based on the actual power produced by the DG facility, rather than payment up front based on system capacity.