2. Generation Programs and Interconnection

The California Renewables Portfolio Standard (RPS) Program set forth in §§ 399.11 - 399.22 requires Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E) and other electricity retailers to procure 33% of their electricity from renewable resources by December 31, 2020. This 33% RPS requirement translates into the need for California investor-owned utilities (IOUs) to procure approximately 19.6 gigawatts (GW)2 of new renewable resources in the next decade. In support of the 33% RPS requirement, the Legislature and the Commission designed electric procurement programs that seek to lower the transaction costs of renewable generation up to 20 megawatts (MW) in size with near-term on-line dates. These programs include the IOU Solar Photovoltaic programs, the Renewable Auction Mechanism, and the Renewable Feed-in Tariff.

In addition to these renewable programs, the Legislature and the Commission have also encouraged development of Qualifying Facilities (QFs)3 and Combined Heat and Power (CHP). Specifically, the Commission has established a feed-in tariff for efficient, greenhouse gas reducing CHP facilities up to 20 MW pursuant to Assembly Bill 1613 (Stats. 2007, ch. 713) (AB 1613)4 and standard contracts and a procurement mechanism for QFs of all sizes through D.10-12-035.

The procurement programs are largely succeeding in encouraging the development and procurement of small generation projects up to 20 MW. However, the success of these procurement programs may be enhanced by timely and cost-effective interconnection to the distribution system. By this rulemaking, we seek to address the key policy and technical issues essential to timely, non-discriminatory, cost-effective and transparent interconnection.

Many entities participating in the Commission's renewable and CHP procurement programs for small generators seek interconnection to the IOUs' distribution systems. Presently, when interconnecting to the distribution system, a generator must comply with one of two interconnection tariffs: the Commission-jurisdictional Electric Tariff Rule 21, which we have previously discussed, or the Federal Energy Regulatory Commission (FERC)-jurisdictional Wholesale Distribution Access Tariffs (WDATs). The FERC-jurisdictional WDATs are filed by each IOU at FERC.

In general, when a generator seeks primarily to offset on-site load, interconnection under the California-jurisdictional Rule 21 occurs efficiently, cost-effectively, and under a proven regulatory structure. To date, more than 95,300 of these generators have been installed in California, representing approximately 880 MW of capacity.5 These are primarily net energy metering generators interconnecting under Rule 21. These generators are queued serially on a first-come, first-served basis and are interconnected serially, usually within 30 business days of submitting a complete interconnection request.

In contrast, generators seeking to export a portion or all of their generation to their host utility's distribution system do not have a clear interconnection study process under Rule 21. For example, since 2008, one utility has received approximately 176 interconnection requests under Rule 21 for generators seeking to export or sell power to the utility and only two of those generators have been interconnected. This situation may become more prevalent as the renewable and CHP procurement programs for small generators are fully implemented.

2 This represents the general 33% RPS trajectory. The total GW of new resources varies when technology, cost, environmental, and other constraints are applied. See Commission's Renewable Portfolio Standard Program Report to the California Legislature, First Quarter 2011 at 12: http://www.cpuc.ca.gov/NR/rdonlyres/62B4B596-1CE1-47C9-AB53-2DEF1BF52770/0/Q12011RPSReporttotheLegislatureFINAL.pdf.

3 QFs are qualifying small power production facilities and qualifying cogeneration facilities. A small power production facility is a generating facility of 80 MW or less whose primary energy source is renewable (hydro, wind or solar), biomass, waste, or geothermal resources. A cogeneration facility is a generating facility that sequentially produces electricity and another form of useful thermal energy (such as heat or steam) in a way that is more efficient than the separate production of both forms of energy.

4 See, e.g., §§ 2840-2845 and Decision (D.) 09-12-042, D.10-12-055, and D.11-04-033.

5 California had 95,371 installed and interconnected systems under the California Solar Initiative Program and the Self-Generation Incentive Program as of August 3, 2011. See http://www.californiasolarstatistics.ca.gov/ (updated biweekly). This total includes installations by IOUs and publicly owned utilities. The publicly owned utilities offer interconnection tariffs similar to Rule 21 for these types of customers.

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