COM/MP1/niz Mailed 1/16/2007

Decision 07-01-018 January 11, 2007

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

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

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

OPINION ADOPTING METHODS TO DETERMINE THE RENEWABLE
ENERGY CREDITS FROM RENEWABLE DISTRIBUTED GENERATION

TABLE OF CONTENTS

Title Page

OPINION ADOPTING METHODS TO DETERMINE THE RENEWABLE ENERGY CREDITS FROM RENEWABLE DISTRIBUTED GENERATION....... 11

I. Summary 22

II. Background 44

III. Subsidy Issues 77

A. Overview 77

B. Should RECs Be Apportioned? 88

1. Parties' Comments 88

2. Discussion 99

C. Who Should Receive The REC Benefits? 1010

1. Comments Supporting that IOUs Receive the REC Benefits 1010

2. Comments Supporting that Renewable DG Owners Retain
the REC Benefits 1313

3. Discussion 1515

D. Should Net Metering Benefits Be Considered in the Calculation of Ratepayer Subsidies? 2222

1. Parties' Comments 2222

2. Discussion 2323

IV. Measurement Issues 2525

V. Assignment of Proceeding 2626

VI. Comments on Proposed Decision 2626

Findings of Fact.................................................................................. 2727

Conclusions of Law............................................................................. 2929

ORDER............................................................................................. 3131

OPINION ADOPTING METHODS TO DETERMINE THE RENEWABLE
ENERGY CREDITS FROM RENEWABLE DISTRIBUTED GENERATION