VI. Comments on Proposed Decision
The proposed decision of Commissioner Peevey in this matter was mailed to the parties in accordance with Section 311 of the Public Utilities Code and Rule 14.2(a) of the Commission's Rules of Practice and Procedure. Comments and/or reply comments were filed by ASPv, Beach, CARE, PV Now joined by CALSEIA, and Sun Light Power Co., CCSF, GPI, PG&E, SCE, California Building Industry Association, TURN, RECOLTE, Vote Solar, The Alliance for Retail Energy Markets, and Consol. We have addressed the comments in the sections pertaining to the issues raised and have modified the final version of this decision as appropriate.
1. There is almost unanimous agreement among parties against apportioning RECs between the load serving entities on behalf of the ratepayers and renewable DG system owners.
2. Apportioning RECs between ratepayers and renewable DG owners would either be highly arbitrary or highly complex.
3. Direct incentives, like those offered through the SGIP and the CSI, tariff options like net metering, and waived interconnection fees exist to encourage and reward investment in renewable DG.
4. RECs represent another factor that may play an important role in the decision to invest in solar or other renewable DG facilities.
5. Little information is available regarding the value of RECs.
6. Values from REC markets in other states may not be indicative of what will occur in the California context.
7. Even if RECs have zero value from a resale perspective, they may be fundamental to making decisions to install renewables because they may enable customers to make green claims as defined in this decision.
8. If DG system owners transfer their RECs, they would not be able to legitimately make green claims.
9. The future role and value of RECs in motivating solar and other renewable DG installations depends on many factors including whether California migrates to an unbundled REC-based RPS regime, as well as the level of demand for RECs in the voluntary market.
10. To the extent RECs have any value, whether explicitly through the sale of RECs into a voluntary or a compliance market, or implicitly, by enabling system owners to make green claims, they may provide a benefit, which could affect the decision to invest in renewable DG systems.
11. Transferring RECs from renewable DG system owners to ratepayers could adversely impact decisions to invest in solar and other renewable DG projects.
12. Allowing solar DG system owners to retain the RECs produced by their facilities is consistent with the long-term goal of making the solar industry self-sufficient.
13. Allowing solar system owners to retain the RECs produced by their systems is aligned with the performance based orientation of SB 1.
14. Transferring the RECs to ratepayers as a condition of receiving ratepayer incentives, whether under the CSI or the SGIP, would run afoul of the policy articulated in D.02-10-062 to encourage the installation of renewable DG facilities.
15. If renewable DG system owners retain the RECs, then, system owners would have the option of selling their RECs into the compliance market, thereby enhancing the economics of renewable DG, if and when the Commission adopts an unbundled REC regime for RPS compliance.
16. Transferring the RECs from renewable DG systems to the ratepayers as a condition of receiving ratepayer incentives would not encourage renewable DG installation.
17. As conditions change, the level of incentives necessary to motivate renewable DG installation consistent with the goals of SB 1 and the SGIP program may change.
18. Many factors, including the value of RECs collectively, influence renewable DG system economics and thus the pace of renewable DG market development.
19. At some point, it may be reasonable to adjust the CSI and the SGIP incentives to reflect the realities of the market, including the benefits system owners may derive from RECs and net metering.
20. Net metering provides a benefit to renewable DG system owners, and plays an important role in the decision to invest in a renewable DG system.
21. Transferring the RECs from renewable DG systems to the ratepayers as a condition of receiving net metering would not encourage renewable DG installation.
22. Because system owners retain 100% of their RECs according to this decision, utilities will not be able to count the output of ratepayer supported renewable DG facilities in their RPS calculations at this time.
23. Eligibility for net metering as established in Pub. Util. Code § 2827(b)(2) is predicated on the technical characteristics of the facility generating energy, not the characteristics of or the attributes associated with the energy the facility produces.
24. Under the approach adopted in this decision, there is no need to impose any measurement requirements beyond those to which renewable DG system owners are already subject.
1. In D.02-10-062, we declared that renewable DG is an RPS-eligible resource.
2. RECs should not be apportioned between ratepayers and renewable DG owners.
3. The Commission should allow all renewable DG system owners to retain the RECs produced by their facilities irrespective of whether or not they receive ratepayer funding from programs such as CSI, SGIP, or net metering.
4. The Commission should not adjust the level of CSI or SGIP incentives based on the value of RECs or net metering alone.
5. The Commission should consider reducing renewable DG incentives, if the pace of market development indicates that that fewer direct incentives, such as those provided under the CSI or SGIP are warranted.
6. Only direct incentives, i.e., ratepayers moneys that are specifically earmarked for CSI-eligible solar technologies, should be included as part of the CSI budget.
7. If and when the Commission authorizes unbundled RECs to be applied toward RPS compliance, it may be necessary to revisit the metering requirements to ensure the number of RECs sold is an accurate reflection of renewable DG system output, consistent with the measurement requirements adopted for grid connected renewable facilities and the WREGIS tracking system.
8. This decision should be effective immediately to resolve the uncertainty of RECs ownership in the circumstances addressed by this decision.
IT IS ORDERED that:
1. Owners of Renewable Distributed Generation facilities shall own all of the Renewable Energy Credits produced by their facilities.
2. The Commission shall revisit the incentives as part of the California Solar Initiative review process as described here to assess whether or not the goals of Senate Bill 1 and the Self-Generation Incentive Program can be achieved at lower cost to ratepayers through a reduction in the incentive level or schedule.
This order is effective today.
Dated January 11, 2007, at San Francisco, California.
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
Commissioners
