16. Comments on Proposed Decision

The proposed decision of Commissioner Michael R. Peevey in this matter was mailed to the parties in accordance with Section 311 and comments were allowed under Rule 14.3 of the Commission's Rules of Practice and Procedure. Comments were filed by Abengoa Solar, CALSEIA, CCSE, DRA, Harpiris Energy, PG&E, SCE, SDG&E/SoCalGas, SOLID, and TURN. Reply comments were filed by CALSEIA, CCSE, DRA, PG&E, SCE, and Sopogy. Where the comments suggested minor adjustments or clarifications to the decision, these changes have been incorporated throughout the decision. Where comments reargued earlier positions or attempted to present new arguments or facts, they were not considered.

A few comments merit discussion. Several parties, namely DRA, SOLID, and Abengoa Solar, commented that the Commission should consider performance-based incentives for the CSI Thermal program rather than lump sum incentives paid up-front, particularly for large commercial SWH systems. These parties also requested that we eliminate caps on incentives to these larger systems. Abengoa Solar comments that the incentive cap could severely restrict installations at commercial and industrial facilities. Moreover, Harpiris Energy, SOLID, and Abengoa Solar commented that we should eliminate the requirement that commercial systems have OG-100 certification. They contend that SRCC ratings are mainly applicable to small-scale residential systems, while equipment used for large-scale applications is engineered for a given application. Harpiris Energy claims it will be shut-out of its largest market sector due to this certification requirement.

We will proceed with implementation of the CSI Thermal with up-front incentives, based on estimated annual thermal or kWh displacement, and with the incentive caps set forth in this decision. While we are intrigued by the concept of performance-based incentives, and agree it might be optimal for larger systems, there are myriad issues surrounding performance-based incentives that we need to consider such as the incentive rate, how output would be measured, and how elimination of incentive caps might affect the program budget. The decision is modified to include the topic of performance-based incentives in the workshop that Energy Division will hold in upcoming months on non-solar water heating solar thermal technologies, so that we might explore shifting to a performance-based incentive design at a future date. Regarding certification requirements, we reiterate that we cannot deviate from the statute's requirement that all systems have either OG-300 or OG-100 certification to be eligible for incentives funded by the gas-displacing portion of CSI Thermal.

PG&E and SDG&E/SoCalGas comment that the decision requires clarification on cost recovery issues, such as which customers will pay for CSI Thermal and how the utilities will ensure the appropriate program costs are placed into rates. TURN comments that the utilities should only collect what they actually spend in each year for CSI Thermal, rather than collecting the funds equally over eight years. In response to these comments, the decision has been modified to direct the utilities to establish a CSI Thermal memorandum account to track actual annual expenditures, and each utility may seek annual recovery of its memorandum account balance in its appropriate ratemaking proceeding. We therefore adopt TURN's suggestion that the utilities only place actual program costs into rates.

DRA suggests expanded warranty requirements beyond the 10-year warranty on solar collectors required by the statute. We have modified the decision to allow Energy Division to consider increased warranty requirements as it works to develop the CSI Thermal Handbook along with the parties, with consideration to balancing warranty cost against adequate consumer and ratepayer protection. In addition, the decision has been modified to include language to address freeze protection requirements specific to climate zone and additional direction on marketing facilitation strategic plans, as suggested by DRA.