13. Pilot Project

We approve the proposed Pilot Project, but adopt the actual capital cost of the project instead of what PG&E has proposed. PG&E proposes to develop a pilot project of up to 2 MW prior to regulatory approval of this application. PG&E states that the Pilot Project will likely be on its land and is intended to expedite the development of the PV Program, demonstrate PG&E's commitment to the PV Program, and allow PG&E to refine internal and external processes needed to develop, permit, construct, and operate a PV facility prior to deployment of the larger PV Program.⁸⁷ We agree that given the scale of the overall solar program, as proposed and adopted, the pilot project is a useful undertaking. PG&E estimates the capital cost of the Pilot Project at $11.9 million.

During the hearing, PG&E's witness noted that PG&E has selected a bid for its Pilot Project. The ALJ directed PG&E to file a response to several questions regarding the solicitation process. PG&E submitted its filing on September 23, 2009.

A review of PG&E's response to the ALJ questions indicates that PG&E followed a competitive process for the development of its Pilot Project. Specifically, PG&E issued a request for information to several solar PV market participants and then issued a request for proposals to a shortlist of candidates that met specific criteria, including price, system performance and operating costs, developer experience, and ability to comply with standard contract terms and conditions, all of which are common to procurement of capacity and generally used in assessing bids. In light of this, we find that PG&E's selection of the Pilot Project through a competitive process was reasonable.

PG&E will be authorized to record the actual capital cost of the Pilot Project into its UGBA as of the effective date of this decision.

⁸⁷ Exhibit 1 at 1-5.