Assignment of Proceeding

President Michael R. Peevey is the Assigned Commissioner and Dorothy Duda is the assigned ALJ in this matter.

Findings of Fact

1. In March 2006, the ALJ was notified that applications for the SGIP exceeded the 50 MW trigger adopted in D.06-01-024.

2. The ALJ issued a ruling on March 21, 2006 directing the SGIP program administrators to reduce solar PV incentive payments from $2.80/watt to $2.50/watt for all program applications exceeding the 50 MW threshold.

3. The ALJ issued a second ruling on April 24, 2006 clarifying several implementation details of the trigger reduction.

4. The April 24, 2006 ruling clarified that the trigger mechanism will be based on conditional reservations actually issued by program administrators.

5. The April 24, 2006 ruling requires program administrators to provide weekly or more frequent updates of application and reservation information on each of their public websites.

6. Conditional reservations statewide, as of the date of this order, are below 50 MW.

Conclusions of Law

1. The proportion allocation of the 50 MW cap suggested by the ALJ is no longer necessary because conditional reservations statewide have not reached 50 MW.

2. Incentive payments should automatically drop to $2.50/watt when the PAs issue conditional reservations that collectively total 50 MW on a statewide basis.

3. The PAs should communicate on a daily basis to determine when conditional reservations reach 50 MW statewide, and post this information daily to their individual websites when reservations are within 20% of the trigger point.

4. The trigger reduction mechanism should be implemented according to the guidance in this decision which modifies two elements of the ALJ's ruling of April 24, 2006, but otherwise affirms it.

IT IS ORDERED that the Administrative Law Judge ruling of April 24, 2006 is affirmed, except for the following two modifications:

a) The program administrators shall coordinate, daily if necessary, and automatically reduce incentive payments to $2.50/watt when the statewide level of conditional reservations reaches 50 MW, rather than the proportional allocation used in the ALJ ruling. The program administrators shall notify the ALJ in writing, when the incentive reduction has occurred so that the ALJ may notify the parties.

b) The PAs shall update their public websites using the reporting format set forth in Appendix B of this decision, and perform daily updates when reservations are within 20% of the trigger point.

This order is effective today.

Dated May 25, 2006, at San Francisco, California.

MICHAEL R. PEEVEY

President

GEOFFREY F. BROWN

DIAN M. GRUENEICH

JOHN A. BOHN

RACHELLE B. CHONG

Commissioners

APPENDIX A

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking Regarding Policies, Procedures and Rules for the California Solar Initiative, the Self-Generation Incentive Program and Other Distributed Generation Issues.

Rulemaking 06-03-004 (Filed March 2, 2006)

ADMINISTRATIVE LAW JUDGE'S RULING

CONFIRMING REDUCTION IN SOLAR

PHOTOVOLTAIC INCENTIVE PAYMENTS

This ruling confirms and clarifies the automatic reduction of incentive payments for solar photovoltaic (PV) projects from $2.80/watt to $2.50/watt, as first noticed in a ruling of March 21, 2006, based on the procedure set forth in Decision (D.) 06-01-024.