2. Background
Over the past several years, this Commission has made a substantial effort to stimulate development of distributed generation (DG) projects and technologies by providing financial incentives to project developers. When our efforts to promote DG began in 2001, the term DG generally referred to customer-owned electric generating facilities, sized up to 5 megawatts (MW), such as solar photovoltaics, wind turbines, biogas, fuel cells, microturbines, small gas turbines, internal combustion engines, and combined heat and power cogeneration plants. Over the last decade, as technologies, legislation, and public policy have evolved, our incentive programs have evolved as well to focus on promoting these various technologies in different ways. This rulemaking evolves from and builds on the work we began in five previous proceedings, Rulemaking (R.) 98-12-015, R.99-10-025, R.04-03-017, R.06-03-004, and R.08-03-008. These previous rulemaking orders describe our fundamental view of DG and its role in providing the state with clean, reliable energy resources and remain useful as background documents guiding our work here. The joint agency Energy Action Plan II, the Integrated Energy Policy Report issued by the California Energy Commission (CEC), and our own orders emphasize the state's commitment to DG development.
Notable achievements in these prior rulemakings include our California Solar Initiative (CSI), created in 2006 with a total budget of $2.16 billion, which provides a long-term commitment to a solar incentive program for solar photovoltaic (PV) and non-PV solar projects, and our Self-Generation Incentive Program (SGIP), which began in 2001 and has provided a sustained endeavor to promote DG technologies other than solar, with a current annual budget of $125 million. Legislation effective in 2008 limited eligibility for SGIP incentives to wind and fuel cell technologies. However, Senate Bill (SB) 412 (Stats. 2009, Ch. 182), which became effective in 2010, authorizes the Commission, in consultation with the California Air Resources Board (CARB), to determine SGIP-eligible technologies based on the requirement that they achieve reductions of greenhouse gas emissions.
In our previous DG rulemakings, the Commission established and refined SGIP and CSI.1 In our most recent CSI/DG rulemaking, R.08-03-008, we issued key decisions involving establishment of the Multifamily Affordable Solar Housing Program (MASH) (Decision (D.) 08-10-036), adoption of a DG cost-benefit methodology for use in assessing DG programs (D.09-08-026), and creation of the CSI Thermal Program to provide incentives to solar water heating systems (D.10-01-022). With regard to SGIP, the Commission allowed SGIP incentives for advanced energy storage technologies if the storage system was coupled with an eligible SGIP technology (D.08-11-044 and D.10-02-017).
Although we have performed a vast quantity of work in our five prior rulemakings to develop policies and implement the SGIP and CSI incentive programs, we must continue to monitor and modify the programs as new issues arise and as the technologies and legislation continually evolve. This proceeding will continue the Commission's policymaking and implementation surrounding DG and solar incentives by addressing the following broad categories of issues:
· Ongoing review, evaluation, and consideration of modification to policies and program rules for CSI and its many sub-programs including, but not limited to, the general market CSI program, the Single Family Affordable Solar Housing (SASH), the MASH, the CSI Research, Development, and Demonstration (RD&D) Program, and the CSI Thermal Program that provides solar water heating incentives. As part of the CSI Thermal Program, the Commission will work towards development of a low-income solar water heating incentive program.
· Ongoing review, evaluation, and consideration of modification to the SGIP with emphasis on consideration of potential modification to SGIP to comply with SB Bill 412.
· Ongoing review, evaluation and consideration of DG policy issues generally, with a particular emphasis on DG on the customer-side of the meter, including not but limited to net energy metering policies, DG interconnection issues, and Rule 21 utility interconnection tariffs.
We describe each of these in more detail below. We hope to resolve these issues expeditiously in order to assure the continued operations of comprehensive, efficient, and effective CSI and SGIP.
1 See R.08-03-008 for background on the key decisions in the prior DG rulemakings.
