Comments were filed by parties on October 20, 2011 by Agricultural Energy Consumers Association; Bay Area Biosolids to Energy Coalition; California Building Industry Association; California Farm Bureau Federation; California Energy Efficiency Industry Council (Efficiency Council); California Large Energy Consumers Association/Energy Producers and Users Coalition (CLECA); California Manufacturers and Technology Association (CMTA); Consumer Federation of California (CFC); Division of Ratepayer Advocates (DRA); Greenlining Institute; Ella Baker Center; Green Power Institute (Green Power); Joint Comments of the Green Power Institute/the California Biomass Energy Alliance/the California Forestry Association/Wheelabrator; Joint Comments of the Natural Resources Defense Council/the Union of Concerned Scientists/the Vote Solar Initiative/Sierra Club California/Californians for Clean Energy and Jobs/The Nature Conservancy (Joint Environmental Groups); Joint Comments of Silicon Valley Leadership Group/Clean Tech San Diego/Clean Economy Network/CALSTART/TechNet/Californians for Clean Energy and Jobs; Joint Watershed Research & Training Center/Pacific Forest Trust; Local Government Sustainable Energy Center; Marin Energy Authority; PG&E; SDG&E; San Francisco Bay Area Rapid Transit District; Solar Alliance; SCE; Sustainable Conservation; The Utility Reform Network (TURN); University of California; and Waste Management.
Reply comments were filed on October 25, 2011 by many of the same parties. A prehearing conference/workshop was held on October 27, 2011.
Many parties support continuing funding for the RD&D and renewables programs currently funded by the PGC. Many parties seek continuation of funding for some or all of these programs at the current levels. Several parties, including DRA and Joint Environmental Groups, contend that the Commission has authority to continue funding these programs, as discussed in Section 4.1 below.
DRA recommends continuation of funding for an interim period for those projects that are already supported by the renewables and RD&D programs administered by the Energy Commission until December 31, 2012 or until the Commission can fully determine how the programs should be funded and administered in Phase 2 proceedings for R.11-10-003. Other parties support a longer interim funding period, such as five or ten years. DRA believes bridge funding will provide continuity for already budgeted and approved projects for 2011 and 2012 and allow time for the Commission to establish metrics to prioritize projects and evaluate program effectiveness.
Joint Environmental Groups express the perspective of many proponents of continued funding. They claim California's public interest RD&D investments have produced multiple benefits for electricity ratepayers, resulting in breakthroughs in energy efficiency and renewable energy, clean energy technology, energy security, environmental protection, and significant bill savings. Regarding renewable programs, Joint Environmental Groups believe that there is unique added value to using ratepayer funds to invest in technologies that have moved past the research and development phase, but are not yet mature enough to compete successfully in a Renewables Portfolio Standard solicitation. Supporting such technologies will ultimately create a larger pool of resources for utilities to choose from and create additional and lower cost options for renewable energy investments.
Similar to DRA, TURN recommends that the Commission continue funding for renewables and RD&D programs on a temporary basis until the Legislature acts to provide a permanent funding source, in order to prevent disruptions in current programs administered by the Energy Commission. TURN recommends that the Commission authorize funding to continue through December 31, 2012 at levels sufficient to support expected disbursements under existing program structures.
SDG&E does not object to continuing the funding for existing renewables in place today for those projects already receiving funding. SDG&E does, however, believe it is time to start phasing out this program. SDG&E supports continuation of the New Solar Homes Partnership until its statutory end date, subject to certain reforms. SDG&E would eliminate funding for the Emerging Renewables Program. However, SDG&E also recommends that in place of Emerging Renewables Program funding, incentives should focus on biogas development. SDG&E recommends that RD&D be funded at its current level, but with changes to its current administration.
Several parties do not support continued funding for RD&D and/or renewables programs currently funded by the PGC, at least at current levels. General concerns fall into the areas of Commission jurisdiction and authority, the effect of high rates, cost-effectiveness of programs, overlap of programs, and whether there are direct benefits to ratepayers.
SCE raises a number of concerns about the legal authority for the Commission to continue funding for RD&D and renewables programs currently funded by the PGC. These issues are discussed below in Section 4.1. SCE contends that if the Commission, despite SCE's legal concerns, decides to extend funding for these purposes, it should: (1) only allow funding for programs that are not duplicative of existing renewables and RD&D programs; (2) only allow funding for programs that can be proven effective and support the safe and reliable delivery of electricity for the IOUs' customers; and (3) cap the funding at the level reflected in the IOUs' current rates. SCE does not believe the Commission should continue PGC funding for any renewables energy programs.
CFC is concerned that if a law is not passed to specifically confer authority on the Commission to continue the RD&D and renewables programs currently funded by the PGC, it may be beyond the authority of the Commission to continue these programs as if the law were still in place. Further, assuming authority does exist, CFC contends that it is unfair to have ratepayers pay for programs where ratepayers are not the direct beneficiaries of the programs. CFC believes ratepayers may be paying twice for RD&D programs which are funded through general rate cases, and that it is not appropriate to continue funding existing RD&D programs at current levels after the end of 2011.
CMTA is not certain that any continued funding of renewables and RD&D programs via a nonbypassable surcharge is necessary or appropriate. CMTA would have the Commission wait to fund these activities through such a surcharge until the Legislature acts to amend § 399.8. CMTA contends that high unemployment in California, high utility bills and an overall poor business climate make the continuation of current funding levels for renewables and RD&D programs funded by the PGC an unnecessary add-on to electric rates.
CLECA does not recommend that funding be continued through a public benefits ratepayer surcharge. If the Commission moves forward with a funding proposal for renewables or RD&D programs currently funded through the PGC, CLECA recommends an expeditious review of the ratepayer benefits of the programs. CLECA also recommends establishing separate balancing accounts for each of the three categories of soon-to-expire PGC funding to enable potential reductions to be refunded to customers if a determination is made in 2012 that the continued program funding is not justified.