COM/MP1/oma Date of Issuance 4/28/2010
Decision 10-04-052 April 22, 2010
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of Pacific Gas and Electric Company to Implement and Recover in Rates the Costs of its Photovoltaic (PV) Program (U39E). |
Application 09-02-019 (Filed February 24, 2009) |
DECISION ADOPTING A SOLAR PHOTOVOLTAIC PROGRAM FOR
PACIFIC GAS AND ELECTRIC COMPANY
DECISION ADOPTING A SOLAR PHOTOVOLTAIC PROGRAM FOR
PACIFIC GAS AND ELECTRIC COMPANY 1
1. Summary 2
2. Background 3
3. PG&E's Proposed PV Program 5
3.1. UOG Portion of the Proposed PV Program (PV UOG) 6
3.2. PPA Portion of the Proposed PV Program 8
3.3. PV Pilot Project 8
3.4. Parties' Positions 9
4. Need for the Program 14
4.1. Discussion 14
5. The PV Program Costs 21
6. Applicable Commission Decisions and Statutes 43
7. PV Program Size and Schedule 48
8. Cost Caps and Performance Mechanisms 55
9. PV PPA Contract Forms 58
10. Additional Rate of Return 64
11. Non-Bypassable Charge 67
12. Land Deposits 69
13. Pilot Project 72
14. Comments on Proposed Decision 73
15. Assignment of Proceeding 73
Findings of Fact 73
Conclusions of Law 77
ORDER 78
DECISION ADOPTING A SOLAR PHOTOVOLTAIC PROGRAM FOR
PACIFIC GAS AND ELECTRIC COMPANY
1. Summary
This decision adopts a five-year solar photovoltaic program (PV Program) to develop up to 500 MWs of solar photovoltaic (PV) facilities in the range of 1 to 20 MWs in Pacific Gas and Electric Company (PG&E's) service territory. In addition, this decision approves a 2 MW PV pilot project.
The PV Program provides for development of solar facilities through both utility-owned generation (UOG) and power purchase agreements (PPA). Under the UOG portion of the PV Program, PG&E is authorized to install up to
250 MWs of UOG PV facilities from 1 to 20 MW in size in its service territory at a rate of 50 MW per year, subject to cost of service ratemaking treatment and carryover provisions as further described below. Similarly, under the PPA portion of the PV Program, PG&E will be authorized to solicit energy from 250 MWs of PV facilities from 1 to 20 MW in size located in PG&E's service territory, also at a rate of 50 MW a year. This decision authorizes the proposed revenue requirement adjusted to reflect revisions to capital, operations & maintenance costs, the deployment schedule, and the rate of return, as described herein. This revenue requirement includes expenditures of up to $1.454 billion for the capital costs associated with the UOG portion of its PV Program. This amount is based on a 250 MW PV Program with an average capital cost (in constant 2009 dollars) of $4,312 per kW(DC) inclusive of a 10 percent contingency amount. Should PG&E develop fewer than 250 MWs over the five year duration of the PV Program, the revenue requirement shall be pro-rata adjusted based the number of MW PG&E does develop. Capital costs in excess of the authorized revenue requirement shall be subject to a reasonableness review.
Pricing under the PPAs will be based on competitive solicitations with the successful bidders entering into a 20-year PPA with PG&E. To ensure the best price possible for ratepayers for the UOG projects developed by PG&E and those developed by independent power producers, we require PG&E to enlist the services of an independent evaluator to assess the fairness and robustness of its solicitations for both the UOG and PPA portions of the PV Program. Although the revenue requirement for the UOG portion of the PV Program is based on an average cost per unit capacity, in evaluating bids we require that PG&E also consider cost per unit energy in selecting winning bids under the UOG portion of the PV Program. Appendix A describes the adopted PV Program.
