4. Uncontested Program Features
Among All Parties

Although Pacificorp and DRA initially disagreed on many aspects of the program design and implementation, the August 2 stipulation indicates that continued discussions between them led to their ultimate agreement on numerous facets of the proposed solar incentive program.

We adopt the uncontested program features agreed to by Pacificorp and DRA, although we make minor modifications to a few of these program features, as described below. These program features are also summarized in Appendix A and the Siskiyou Parties do not oppose them.

The proposed incentive program would be a voluntary program, available to Pacificorp's residential, commercial, industrial and irrigation customers. Although Pacificorp and DRA disagree on the proper incentive levels, they agree that incentives would decline as the program reaches predetermined capacity targets, or steps. These steps would be separate for residential and non-residential customers.

All incentives, irrespective of system size or applicant customer group, would be paid up front based on an "expected performance based incentive" (EPBI) computation to determine the incentive amount. The one time EPBI payment would be paid upon completion and inspection of approved projects. Pacificorp and DRA agree that Pacificorp should develop an incentive calculator that would adjust rebate levels according to the expected performance of a solar energy system, utilizing the same variables and data used by the CSI program calculator. Pacificorp and DRA agree the program should not include a performance-based incentive (PBI) element as required for certain systems in the CSI Program, because the additional costs of administering PBI would outweigh the potential benefits.

Pacificorp and DRA agree the program should allow residential new construction to participate in the program by reserving an incentive during the construction period. Incentives would be paid upon receipt of a certificate of occupancy.

Pacificorp and DRA agree that installations would be sized to offset part or all of the estimated energy use at the project site and would be required to be completed by a licensed contractor. They also agree that the program should include an inspection process that follows the same guidelines as CSI. We will add one clarification that systems must follow sizing requirements in the CSI program, which limits system size to no greater than the customer's previous
12-month energy usage.

Pacificorp and DRA agree that in the event the Commission-approved initial incentive rates prove too low to attract sufficient participation within the first three months of the program, Pacificorp should be authorized to file requests to adjust incentive rates $0.25 per watt higher than approved in this decision through an advice letter filing. In this filing, Pacificorp would provide an updated budget worksheet reflecting the incentive increase. The Siskiyou Parties support an advice letter process to request increasing incentives.

We will adopt this proposal, with the modification that Pacificorp may only submit its advice letter after six months experience with the program. The filing should be a Tier 2 advice letter and should include a revised proposal for the program tariffs and surcharge. We adopt a six month waiting period rather than the shorter 3 month period proposed by Pacificorp because we consider it likely that customers could simply delay their solar purchase 3 months waiting for the promise of a higher incentive. This is less likely to occur with a longer trial period for the incentives adopted today.

Pacificorp and DRA agree the program should include $0.75 per watt additional incentive for tax-exempt entities who participate in the program. The availability of this additional incentive would be limited to 10 percent of the total non-residential program capacity. In order to qualify to receive this higher incentive rate, tax-exempt entities must own their systems and cannot employ financing arrangements that allow a third-party system owner to take advantage of state or federal tax credits. This is the same as our requirement in the CSI program, adopted in D.06-08-028, where we required tax-exempt entities to include in their application a certification under penalty of perjury that they are a tax-exempt entity and they are not receiving federal tax credits through financing arrangements. (D.06-08-028 at 22.) We will apply this same requirement here. Tax exempt entities may always engage in financing or third-party ownership arrangements, but they will receive the lower commercial incentive rate.

Pacificorp and DRA agree on a capacity goal for the program of 3.3 MW. Based on our experience with the CSI program, we will modify this goal slightly upwards to 3.54 MW to leave a cushion for program dropouts in the early stages. (See Table 5 in Section 5.2 below for further discussion.) It is our hope that even if dropouts occur, the program will achieve 3.3 MW.

Pacificorp and DRA agree the program would be funded through a new surcharge, Schedule S-190, calculated to collect the annual budget allocated equally between all customer classes. Pacificorp further explains that this means it will allocate surcharge collections on an equal percentage basis among its customer classes, which results in an equitable rate impact among the customer classes. (See Pacificorp Application, 3/1/10 at 5 and Appendix C.) Customers under the California Alternative Rates for Energy (CARE) program would be exempt from any program surcharge. Pacificorp and DRA also agree that customers who participate and receive incentives through the program would be billed under Pacificorp's net metering tariffs, Schedule NEM-35. We clarify that customers may choose to be billed under net metering tariffs, but this is not required.

Pacificorp and DRA agree that program applicants should be required to meet certain energy efficiency requirements. Applicants with existing residential and small commercial buildings should be required to complete a free energy efficiency survey to identify cost-effective measures the customer could undertake to increase the efficiency of their home or business. Commercial buildings larger than 100,000 square feet should be required to implement
cost-effective energy efficiency measures until the building reaches energy efficiency benchmarks.3

Pacificorp and DRA agree that to promote greater energy efficiency, incentives under the program should be capped at 90 percent of the customer's average usage over the previous 12 months. This should provide additional incentive to applicants to conserve energy and install systems with high performance factors. We make one modification in that we will apply this requirement only to systems above 5 kW in capacity.

According to the stipulation between Pacificorp and DRA, the owner of any solar facilities installed under the program would retain ownership of any RECs associated with generation of electricity from that facility.

Pacificorp and DRA agree that Pacificorp should provide an annual report to the Commission on the number and total capacity of projects applied for, accepted, and completed during the year, the estimated saved energy, collections, incentive payments, and other expenses under the program. We direct Pacificorp to consult with and follow guidance from the Commission's Energy Division on the format and contents of this report.

Pacificorp and DRA agree that Pacificorp would provide a meter capable of measuring non-interval system generation to participants with systems under 30 kW. Pacificorp would provide monthly production data from these systems to the Commission in its annual report. The participant would pay for an additional meter base near the existing utility meter to accommodate the Company's solar energy production meter. For systems 30 kW and above, the participant would be required to provide all necessary metering to measure the generation in intervals and provide the interval meter data to a Performance Monitoring and Reporting System supplier.

Pacificorp and DRA agree the program should not include an incentive program for low-income residential customers at this time due to the added complexity and administrative expense. They agree that Pacificorp should evaluate the costs and benefits of a low-income incentive program and report its findings as part of a "lessons learned" exercise, to be conducted if Pacificorp seeks to extend the solar incentive program beyond four years (see Section 5.4 below).

Pacificorp and DRA agree that Pacificorp should collaborate with the administrators of the CSI to seek methods of leveraging existing energy efficiency and CSI materials, including use of the existing statewide website www.GoSolarCalifornia.org that provides consumer information on solar energy systems.

Pacificorp and DRA agree that Pacificorp should file compliance tariffs upon Commission approval of the program, including revised program tariffs, Schedule E-70, and surcharge tariff, Schedule S-190. This compliance filing would include Pacificorp's solar incentive program handbook along with a description of how the handbook differs from the CSI handbook.

We adopt this proposal and will direct Pacificorp to file its revised program and surcharge tariffs in compliance with the program changes adopted in this order. We also direct Pacificorp to file a separate advice letter containing its Program Handbook detailing how the program will be administered. These advice letters should be filed within 60 days of this decision, with the intent that Pacificorp's program will begin accepting applications on July 1, 2011. Unless specific deviations from the statewide CSI program have been adopted in this order, the Program Handbook should specify that Pacificorp's solar incentive program will follow the CSI Program Handbook and may simply reference that document. While we do not anticipate the need for further deviations from CSI, Pacificorp may identify other minor deviations in its Program Handbook advice letter which the Commission may address during this advice letter process.

3 For further definition of benchmarks, see the CSI Program handbook, Section 2.3.1.1.

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