9. Assignment of Proceeding
President Michael R. Peevey is the assigned Commissioner and ALJ Maryam Ebke is the assigned ALJ in this proceeding.
1. California has a number of existing programs that support the development of renewable generation, including the RPS program and the CSI.
2. EAP I, adopted in 2003, specifically identified the promotion of customer and utility owned clean and renewable distributed generation as a key component of achieving the state's overarching energy objectives.
3. No 1-2 MW solar PV projects have been built as a result of SDG&E's RPS solicitations.
4. The existing programs which encourage development of solar energy facilities have left a gap in the development of 1-2 MW renewable projects.
5. Without a program that focuses on promoting the development of 1-2 MW PV facilities, projects of this size range may not be developed
6. Small-scale PV can be located close to load centers, developed relatively quickly and may reduce the need for transmission infrastructure development.
7. A variety of legislative or policy options may fill the gap in the 1-2 MW solar PV energy market.
8. Development of small-scale PV facilities provides a valuable approach to increasing the amount of renewable generation in California and realizing the renewable energy goals of the state.
9. Small-scale PV can serve the state in achieving its RPS and GHG emission reduction goals.
10. The Solar Energy Project can supplement the Commission's RPS and CSI efforts to advance development of renewables facilities in California.
11. The adopted Solar Energy Project is one possible solution to help address the existing gap in the 1-2 MW solar PV energy market.
12. Development of small-scale PV is consistent with the state's commitment to develop renewable distributed generation as a priority resource for the state.
13. A program to develop small-scale PV will supplement, not supplant or conflict with other procurement mechanisms or strategies.
14. The SA does not meet the requirement of Rule 12.1(d) of the Commission's Rules of Practice and Procedure.
15. The Solar Energy Project as modified is reasonable.
16. The proposed cost in the SA for non-tracking systems is not reasonable.
17. The request for an increase in SDG&E's rate of return is not consistent with the law, because it does not meet the requirements of Pub. Util. Code § 454.3.
18. The SA's proposed approach for debt equivalence is inconsistent with Commission decisions and policies.
19. The Commission has established a general policy that favors market competition for the procurement of energy resources.
20. The adopted Solar Energy Project and the adopted PV programs for SCE and PG&E serve similar policy objectives.
21. The adopted Solar Energy Project will create opportunities for independent solar energy producers to compete for part of the projects covered by the adopted Solar Energy Project.
22. The adopted Solar Energy Project is in the ratepayers' interest.
23. Tracking systems may not be suitable for all projects.
24. The proposed capital cost is not reasonable, because it was based on tracking technology.
25. SDG&E's estimated program development and administrative costs lacks sufficient details.
26. SDG&E's estimated O&M cost cap of $25/kW-yr is reasonable.
27. There is no justification in the record for the proposed 3% O&M escalation factor.
28. The Commission has required the use of an independent evaluator in all long-term utility solicitations.
29. Requiring all UOG projects to be combined with a CSI project could unnecessarily limit the program.
30. It is reasonable to require PPA projects to achieve commercial operation within 18 months of Commission approval of the project.
31. It is reasonable to conduct a reasonableness review if UOG facilities do not perform as expected.
32. There is no requirement for consolidation of financial statements of PPA projects with SDG&E's financial statement.
33. Debt-equivalence or consolidation requirement per Financial Accounting Standards Board Interpretation Number FIN 46(R) are not applicable under the adopted Solar Energy Project.
1. The Commission should support the development of small-scale PV projects through the Solar Energy Project because the CSI and RPS programs have not resulted in significant investments in small-scale solar PV projects.
2. All commercially viable technologies and mounting configurations should be allowed to participate in the Solar Energy Project.
3. Projects of up to 5 MW should be allowed to participate in the Solar Energy Project as long as they do not require major distribution upgrades.
4. The SA should not be adopted because it is not consistent with the law and does not meet the requirements ion Rule 12.1(d) of the Commission's Rules of Practice and Procedure.
5. The Solar Energy Project should allow private investment through competitive procurement.
6. The Commission should adopt upfront criteria to be used in selection of individual UOG PV projects.
7. The Commission should review UOG capital and O&M costs in SDG&E's GRC.
8. The Commission should conduct a reasonableness review of the O&M costs of UOG facilities if on average a facility produces less than 80% of its expected generation.
9. The Solar Energy Project does not meet the criteria of Pub.Util. Code § 454.3 for an increase of basis points.
10. SDG&E should use an independent evaluator in all solicitations conducted pursuant to this program.
11. SDG&E should file annual compliance reports as described in Appendix A. The first compliance report is due at the end of the first year of the program.
12. The independent evaluator's report should be included in the annual compliance report.
1. The adopted Solar Energy Project set forth in Appendix A to this decision is approved.
2. San Diego Gas & Electric Company shall implement the adopted Solar Energy Project as set forth in Appendix A.
3. In pursuing the individual solar projects authorized in this decision, San Diego Gas & Electric Company must adhere to all relevant permitting requirements including any review required under the California Environmental Quality Act.
4. Within 60 days of the effective date of this decision, San Diego Gas & Electric Company shall file a Tier 3 advice letter with the Energy Division specifying the Solar Energy Project implementation and administration details needed to implement the Power Purchase Agreement portion of the program as set forth in Appendix A, including:
_ 20-year Standard power purchase agreement contract;
_ Competitive solicitation process and protocols, eligibility, and timeline for the power purchase solicitations;
_ Criteria for evaluating conforming bids;
_ Process for identifying preferred locations for project development to optimize the locational value of project sites as well as the provision of information regarding the available capacity at these preferred locations;
_ Generation system interconnection application process and protocols; and
_ Confidentiality protocols to ensure that information given by developers to San Diego Gas & Electric Company through the interconnection or bidding process is not shared with San Diego Gas & Electric Company's staff working on the utility-owned generation of the Solar Energy Project.
5. Within 60 days of the effective date of this decision, San Diego Gas & Electric Company shall file a Tier 2 advice letter with the Energy Division specifying the Solar Energy Project implementation and administration details needed to implement the utility-owned portion of the program as set forth in Appendix A, including:
_ Solicitation process and protocols, eligibility, and timeline for projects bidding into the utility-owned generation solicitations;
_ Criteria for evaluating conforming bids in the utility-owned generation turn-key solicitations;
_ Process for identifying preferred locations of utility-owned generation project development to optimize the locational value of project sites; and
_ Methodologies for calculating the expected generation output of individual utility-owned facilities.
6. Upon selection of a Utility-owned Generation project, San Diego Gas & Electric Company shall submit a Tier 2 advice letter to obtain Commission approval of the executed contract for the selected project and the corresponding revenue requirement recorded in appropriate accounts as adopted in this decision.
7. San Diego Gas & Electric Company shall enlist the services of an independent evaluator for the following:
_ To oversee the solicitation process and provide an assessment of the fairness and robustness of each of the solicitations it conducts pursuant to this program, for both utility-owned generation projects and power purchase agreement projects, and the degree to which these solicitations conform to the solicitation protocols.
_ To provide verification of the expected generation of each utility-owned project.
8. Within 60 days of the closing date of each solicitation for power purchase agreements, San Diego Gas & Electric Company shall convene a program forum to identify program solicitation components that may need refinement. Based on the feedback received through these program forums, and in consultation with the Energy Division, San Diego Gas & Electric Company may file a Tier 3 advice letter seeking modifications to the solicitation component of the Solar Energy Project adopted by this decision.
9. San Diego Gas & Electric Company (SDG&E) shall file annual reports, which shall include the independent evaluator's reports regarding all solicitations conducted pursuant to this program over the reporting period and, at a minimum, the following:
Reporting on the Power Purchase Agreement (PPA) portion of the Solar Energy Project
_ Documentation of all solicitations issued for PPA projects;
_ A description of all bids received from the PPA solicitations, including the name of bidder, location of project, bid price, and description of proposed facility (generating capacity, type of technology, annual average expected generation, interconnection point), and identification of winning bids;
_ The total electrical output for all systems under PPAs that are currently selling electricity to SDG&E, for each month of the previous year;
_ A description of the project specific distribution and network upgrades, including their costs generally needed to facilitate the PPA portion of Solar Energy Project.
Reporting on the Utility-owned Generation (UOG) portion of the Photovoltaic (PV) Program
_ Documentation of all solicitations issued for UOG projects, including the criteria SDG&E established to evaluate bids; a description of the short list of bids, including name of the bidder and final price in the agreement, a description of offer/facility (generating capacity, type of technology, annual average expected generation, interconnection point), and identification of winning bids;
_ A description of all UOG facilities for which work has been initiated or completed in the previous year, including: capital costs, and operations and maintenance expenses, generating capacity, type of technology, annual average expected generation, description of the site (existing SDG&E-owned land or newly acquired/leased, land/lease cost, proximity to substation), and progress toward completion;
_ Quantification of the UOG capacity that achieved commercial operation in each program year;
_ A calculation of the levelized cost of energy (LCOE) for each UOG facility that is completed and interconnected to the grid. This calculation shall include work papers showing actual amounts for all cost and electrical output entries used to calculate the LCOE;
_ Electrical output by month for the previous year for each SDG&E-owned UOG facility that is completed and interconnected to the grid; and
_ A description of the project specific distribution and network upgrades needed to facilitate the PV PPA Program. The known or projected costs of those upgrades, associated with interconnecting each UOG facility, including all distribution and network upgrades, a listing of the UOG projects identified as triggering the need for network upgrades, and identification of the UOG projects implemented notwithstanding the need for network upgrades, and the cost of those network upgrades.
SDG&E shall file these annual reports with the Commission and serve them on the service list of this application. The first annual report shall be due 12 months from the start of the program.
10. The first year of the Solar Energy Project shall begin upon Commission approval of the advice letter San Diego Gas & Electric is required to file pursuant to Ordering Paragraph 5 of this decision.
11. Application 08-07-017 is closed.
This order is effective today.
Dated September 2, 2010, at San Francisco, California.
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
TIMOTHY ALAN SIMON
NANCY E. RYAN
Commissioners
The Solar Energy Project
A Solar Photovoltaic Program for
San Diego Gas & Electric Company
The Solar Energy Project (Solar Energy Project) is a five-year program (starting from the date the Commission approves SDG&E's advice letter) to develop up to 100 megawatts (MW) of solar photovoltaic (PV) facilities in the range of one to two MW in San Diego Gas & Electric's (SDG&E) service territory. An independent evaluator (IE) shall oversee all solicitations conducted pursuant to the Solar Energy Project. IE expenses shall be recorded in SDG&E's Independent Evaluator Memorandum Account (IEMA).
Total Size of the Solar Energy Project:
Utility-owned Generation (UOG) Portion of the Solar Energy Project:
Cost caps: $3.50/W with a 10% contingency for capital cost. $25/kW-yr for operation and maintenance costs escalated at the index for all urban consumers in the west, specifically the CPI published by the U.S. Bureau of Labor Statistics with the series ID CUUR0400SA0 ( http://data.bls.gov/cgi-bin/srgate).
Project Size/Type: Primarily one to two MW PV facilities of all technologies and mounting configurations, but projects of up to 5 MW are also allowed as long as no major distribution upgrade is required.
Power Purchase Agreement (PPA) Portion of the Solar Energy Project:
Project Size/Type: Primarily one to two MW PV facilities of all technologies and mounting configurations, but projects of up to 5 MW are also allowed as long as no major distribution upgrade is required.
Project development timeline: 18 months from Commission approval,
MWs associated with projects that do not achieve commercial operation within in 18 months after Commercial approval shall be added to the next solicitation.
Location: In SDG&E's service territory.
Price: SDG&E shall hold a competitive solicitation at least once per year to select winning projects.
Cost cap: at SDG&E's time-of-delivery adjusted levelized cost of energy (LCOE) of $235/MWh based on $3.50/W.
Reporting Requirements:
SDG&E shall file annual compliance reports in this proceeding. The first report is due 12 months after the start of the Solar Energy Project. The report shall include the independent evaluator's reports regarding all solicitations conducted pursuant to this program over the reporting period and, at a minimum, the following:
Reporting on the PPA portion of the Solar Energy Project
_ Documentation of all solicitations issued for PPA projects;
_ A description of all bids received from the PPA solicitations, including the name of bidder, location of project, bid price, and description of proposed facility (generating capacity, type of technology, annual average expected generation, interconnection point), and identification of winning bids;
_ The total electrical output for all systems under PPAs that are currently selling electricity to SDG&E, for each month of the previous year;
_ A description of the project specific distribution and network upgrades, including their costs needed to facilitate the PPA portion of the Solar Energy Project.
Reporting on the UOG portion of the PV Program
_ Documentation of all solicitations issued for UOG projects, including the criteria SDG&E established to evaluate bids; a description of the short list of bids, including name of the bidder and final price in the agreement, a description of offer/facility (generating capacity, type of technology, annual average expected generation, interconnection point), and identification of winning bids;
_ A description of all UOG facilities for which work has been initiated or completed in the previous year, including: capital costs, and operations and maintenance expenses, generating capacity, type of technology, annual average expected generation, description of the site (existing SDG&E-owned land or newly acquired/leased, land/lease cost, proximity to substation), and progress toward completion;
_ Quantification of the UOG capacity that achieved commercial operation in each program year;
_ A calculation of the levelized cost of energy (LCOE) for each UOG facility that is completed and interconnected to the grid. This calculation shall include work papers showing actual amounts for all cost and electrical output entries used to calculate the LCOE;
_ Electrical output by month for the previous year for each SDG&E-owned UOG facility that is completed and interconnected to the grid; and
_ A description of the project specific distribution and network upgrades needed to facilitate the PV PPA Program; the known or projected costs of those upgrades, associated with interconnecting each UOG facility, including all distribution and network
Upgrades; a listing of the UOG projects identified as triggering the need for network upgrades; and identification of the UOG projects implemented notwithstanding the need for network upgrades, and the cost of those network upgrades.
(END OF APPENDIX A)
