2. Background

On February 2, 2009, Pacific Gas and Electric Company (PG&E) filed this application seeking approval of a Photovoltaic Program (PV Program) and authorization to recover the associated revenue requirement for the PV Program in rates. PG&E's proposed PV Program consists of the installation and operation of up to 500 megawatts (MWs) of 1 to 20 MWs PV generation facilities in PG&E's service territory over a five-year period. Up to 250 MWs of the PV Program capacity will be utility-owned generation (UOG) and PG&E will procure up to 250 MWs through power purchase agreements (PPAs) with independent power producers (IPPs). PG&E seeks authorization to incur an estimated $1.45 billion in capital costs for the PV Program. In addition, PG&E requests approval of a
2 MW pilot project to be started in 2009 at an estimated capital cost of
$11.9 million.

Several parties filed protests and responses to the application. The Commission held a prehearing conference (PHC) on May 14, 2009. Following the PHC, the Assigned Commissioner and Administrative Law Judge (ALJ) issued a Scoping Memo and Ruling (Scoping Memo) which established the scope of issues and the schedule for the proceeding.

Parties served testimony and rebuttal testimony pursuant to the Scoping Memo schedule. Evidentiary hearings were held on September 10 through 14, 2009. The Division of Ratepayer Advocates (DRA), CAlifornians for Renewable Energy (CARE), California Large Energy Consumers Association (CLECA), Western Power Trading Forum (WPTF) and Direct Access Customer Coalition (DACC), Consumer Federation of California (CFC), Coalition of California Utility Employees (CUE), The Solar Alliance, Independent Energy Producers Association (IEP), The Utility Reform Network (TURN), California Farm Bureau Federation (Farm Bureau), and The Greenlining Institute (Greenlining) filed timely opening briefs. DRA, WPTF and DACC, CLECA, CUE, The Solar Alliance and California Solar Energy Industries Association (CALSEIA), CARE, Greenlining filed timely reply briefs. CARE and DRA requested final oral arguments pursuant to Commission Rules of Practice and Procedure. Accordingly, the Commission held a final oral argument on March 10, 2010.

On October 11, 2009, the Governor signed Senate Bill (SB) 32, (Stats. 2009, ch. 328) and Assembly Bill (AB) 920, (Stats. 2009, ch. 376) into law to take effect January 2010. SB 32 increases the size of generation facilities eligible for California's feed-in tariff program from 1.5 megawatts (MW) to 3 MW, and raises the program's statewide cap from 500 MW to 750 MW. SB 32 also establishes that the price under this program shall be based on the market price referent adjusted to include all current and anticipated environmental compliance costs subject to a ratepayer indifference test. AB 920 allows net energy metering customers with projects of up to 1 MW to sell any excess electricity they produce over the course of a year to their electric utility at a rate to be determined by the Commission.

Because both pieces of legislation require the utilities to provide compensation for electricity provided to the grid by projects similar in size and technology to those under consideration in this application, the assigned ALJ issued a ruling on October 30, 2009, requesting additional briefs on whether any aspects of SB 32 and AB 920 would impact PG&E's proposed PV Program in a way that should affect the Commission's final decision in this proceeding. DRA, TURN, PG&E, Greenlining, Solar Alliance, CFC, CARE, CALSEIA, and CUE filed timely supplemental briefs.

The proceeding was submitted on March 10, 2010 upon conclusion of the final oral argument.