COM/MP1/sid Mailed 5/4/2007

Decision 07-05-007 May 3, 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 MODIFYING DECISION 06-08-028

REGARDING THE CALIFORNIA SOLAR INITIATIVE INCENTIVE ADJUSTMENT MECHANISM

This decision modifies the Commission's prior order implementing the California Solar Initiative (CSI), namely Decision (D.) 06-08-028. The decision is modified to clarify a process for handling applications that drop out or reduce their system sizes.

1. Background

In the Commission's first CSI order, D.06-01-024, the Commission established a mechanism for solar incentives to decline over the 10-year duration of the CSI program. This initial mechanism reduced incentives at the start of each calendar year, or based on megawatts (MWs) of program participation, whichever occurred sooner. In D.06-08-028, the Commission modified the initial incentive adjustment mechanism so that incentives would not adjust on a calendar year basis, but only decline based on the volume of solar installations, as measured in MWs in applications for incentives that had reached the "conditional reservation" stage.¹ The decision adopted several tables detailing the MWs in each step, and the MWs allocated to each utility for each step of the incentive mechanism. (See D.06-08-028, Tables 10, 11 and 13.) Further, the Commission specifically directed the CSI Program Administrators to reduce incentives when conditional reservations for solar incentives reach the MW targets in Table 11. (D.06-08-028, Ordering Paragraph 19.) In a subsequent order, the Commission made minor modifications to the CSI incentive mechanism tables, including Table 11, to reflect an adjusted MW goal for the Commission portion of CSI, as set forth in Senate Bill 1. (D.06-12-033.)

In D.06-08-028, the Commission recognized that the CSI Program Administrators, solar industry, and participating customers would need a program handbook to facilitate program implementation. As directed in the order, Energy Division convened a handbook workshop, forwarded a draft handbook to the Administrative Law Judge (ALJ), and the CSI Program Handbook was approved by an Assigned Commissioner's Ruling on December 20, 2006.

¹ The terminology "conditional reservation" refers to applications that have passed initial screening for eligibility and provided payment of the application fee.