6. Use of SGIP Funding
In its application, SCE suggests that it use $10.8 million in uncommitted SGIP funds to "buy down" half of the $21.6 million in capital costs for its fuel cell project. According to SCE, participation in SGIP has been lower than anticipated and there are excess funds collected from ratepayers for SGIP that have not been needed to date for that program. TURN supports the use of uncommitted SGIP funds, and goes further to suggest that both utilities fund all the capital costs of both Fuel Cell projects from excess, uncommitted SGIP funds. TURN argues that using these funds will allow the Fuel Cell Projects to be funded without increasing rates.
WPTF/AReM, CESA, Debenham, and DRA oppose SCE's request to use uncommitted SGIP funds. According to Debenham, SCE's proposal to use SGIP funds would create a conflict of interest by allowing SCE to administer SGIP and compete for funds with other applicants. Debenham notes the Commission explicitly barred IOUs from receiving incentives through SGIP in D.01-03-073. CESA opposes use of SGIP funds by SCE due to the unknown demand for SGIP funds created by the Commission's recent addition of advanced energy storage to the SGIP eligible technology list in D.08-11-044. CESA claims it is premature for SCE to lay claim to alleged underutilized funding.
As described above, we believe the Fuel Cell Projects can serve as a valuable complement to the existing SGIP by ensuring the deployment of a number of fuel cell projects. However, using SGIP funds to support UOG projects is a significant departure from the manner in which SGIP funds have been used to date. In particular, pursuant to D.01-03-073, the Commission established SGIP to provide incentives for the deployment of "self-generation" technologies, which was specifically defined as "distributed generation technologies . . . installed on the customer's side of the utility meter that provide electricity for a portion or all of that customer's electric load." (D.01-03-073 at 4.) In D.04-12-045, the Commission revisited the topic of utilities receiving SGIP incentives and once again, found them ineligible. (D.04-12-045 at 23.)
In comments on the proposed decision, TURN argues that despite the Commission's determinations in these prior decisions, the concept of distributed generation has changed to encompass both behind the meter applications as well as distributed wholesale generation, in which the energy from a distributed resource is delivered to the utility system rather than used to offset onsite load. This, in TURN's view, allows the Commission to use SGIP monies to support these projects.12 While we agree that the notion of distributed generation in general has evolved to include wholesale applications, we do not believe this change allows for repurposing of SGIP monies to support utility owned projects as TURN suggests. The enabling legislation13 and prior Commission decisions are clear that SGIP is fundamentally an incentive program to support the installation of eligible technologies on the customer side of the meter. Although the proposed projects clearly supplement SGIP by supporting an SGIP eligible technology, that fact alone does not mean that we can use SGIP monies for these utility owned projects. We also agree with Bloom that allowing SGIP monies to be used for utility owned projects may create a conflict of interest given the role of the utilities as the SGIP administrators.14 The proposed Fuel Cell Projects will be owned by PG&E and SCE, rather than by a utility customer, and electricity generated by the fuel cells will go to the grid and not to the reduction of customer load. For these reasons, we will not depart from our prior policy of prohibiting utilities from receiving SGIP incentive funds for their own projects.
12 TURN Comments, 3/22/10 at 11-12.
13 See Pub. Util. Code 379.6(a)(2) and legislation referenced therein.
14 Bloom Comments, 3/22/10 at 4.
