9. Assignment of Proceeding
Michael R. Peevey is the assigned Commissioner and Maryam Ebke is the assigned Administrative Law Judge in this proceeding.
1. California has a number of existing programs that support the large scale deployment of solar generating technologies, including the California Solar Initiative and the Renewables Portfolio Standard program.
2. The Energy Action Plan I, adopted in 2003, specifically identified the promotion of customer and utility owned clean and renewable distributed generation as a key component of achieving the state's overarching energy objectives.
3. The programs which encourage development of solar energy facilities have left a gap in the one to two MW solar energy market.
4. A variety of legislative or policy options may fill the gap in the one to two MW solar energy market.
5. The SPVP is one possible solution to help address the existing gap in the one to two MW solar energy market.
6. Because new transmission facilities are not required to deploy rooftop solar PV facilities and construction requires little to no environmental review, the SPVP can help advance California's broad goal of quickly developing renewable energy while other options are being pursued.
7. D.07-12-052 referred to preferred resources, but also acknowledged that there are additional factors associated with utility ownership of renewable and other loading order or non-conventional resources that have not been fully vetted in this proceeding.
8. In D.07-12-052, the Commission intended to reserve its discretion to treat preferred resources, including renewables, differently from conventional resources for purposes of determining if UOG projects are reasonable.
9. The Commission has established a general policy that favors market competition for the procurement of energy resources.
10. The adopted SPVP will create opportunities for independent solar energy producers to compete for 50% of the one to two MW rooftop solar projects covered by SCE's application.
11. The adopted SPVP will allow the Commission to compare and contrast the UOG portion of the program with the PPA portion of the program.
12. The adopted SPVP is in the ratepayers' interest.
13. Neither the CSI nor the RPS provides a proper benchmark for determining whether the cost of the SPVP is reasonable.
14. The adopted SPVP has many favorable attributes.
15. Reducing the UOG portion of the program below 250 MW will adversely impact the ability of SCE to hit the cost targets it identified in its application.
16. The CSI and the SPVP are fundamentally different programs.
17. The RPS and SPVP have similar, but different, objectives.
18. The Commission has an ongoing responsibility to ensure that utility investments result in infrastructure that is used and useful.
19. Should the Commission find in the applicable ERRA proceeding that SCE did not live up to its responsibilities, that the performance of the facilities is unreasonably poor, or that SCE did not prudently maintain and operate the solar facilities built pursuant to this program, the Commission can disallow recovery of certain costs.
20. The prospect of a reasonableness review should costs exceed $3.85 per watt coupled with the opportunity the PPA portion of the program provides to compare and contrast the UOG projects with the PPA projects is sufficient to motivate SCE to focus on superior performance and cost.
21. The adopted SPVP seeks to promote deployment of an existing technology into a heretofore untapped market niche.
1. The SPVP is one possible solution to address the existing gap in the one to two MW solar energy market and to help advance renewable development.
2. Pub. Util. Code § 2775.5 does not apply to the SPVP as proposed by SCE or as adopted herein because neither program seeks to allow SCE to manufacture, lease, sell or otherwise own or control any solar energy system as the term solar energy system is defined in § 2775.5.
3. SCE should own, develop, install, operate, and maintain up to 250 MW of the SPVP projects and procure 250 MW of one to two MW projects from independent solar energy producers.
4. SCE should procure the 250 MW of rooftop solar generation from independent solar energy producers consistent with the objectives, parameters and timeframe established for the UOG projects of the SPVP.
5. SCE should target project sites for the SPVP that do not have sufficient on-site load to participate in the CSI program.
6. The output of the SPVP projects should not be counted toward the CSI goal.
7. The energy generated from the SPVP projects should be counted toward SCE's RPS goal.
8. The UOG portion of the SPVP should be subject to cost of service regulation.
9. Review of all SPVP costs should be conducted in SCE's GRC proceeding and review of SPVP performance and SCE's operation of the facilities should be conducted in SCE's annual ERRA proceeding.
10. Costs above $3.85/W should be subject to a reasonableness review.
11. SCE should be authorized to establish a balancing account to record the difference between the SPVP's actual and recorded expenses and revenues.
12. The Commission should monitor the SPVP on an ongoing basis to assess the progress and impacts of the program on the wholesale distributed solar energy market. A full review of the SPVP should occur in SCE's GRC proceeding.
13. The adopted SPVP does not meet the criteria of Pub. Util. Code § 454.3 for an increase of 100 basis points.
14. Within 30 days of the effective date of this decision, SCE should file an advice letter with the Energy Division delineating the criteria for selection of the bids, and containing a draft standard 20-year PPA contract for use in the RFO.
15. SCE should file an annual compliance report as described in Section 6.2 of this decision. The first report should be due on July 1, 2010, and subsequent reports filed on July 1 every year thereafter. The filing of the compliance report does not re-open the proceeding.
16. A.08-03-015 should be closed.
IT IS ORDERED that:
1. Southern California Edison Company's solar photovoltaic program is modified as follows:
· 250 megawatt of utility-owned distributed generation (about 50 megawatt annually). Southern California Edison Company to own, install, operate and maintain distributed solar photovoltaic projects primarily in the one to two megawatts, located in Southern California Edison Company's service territory on existing commercial rooftops. Projects cost target at $3.50/Watt with a 10% contingency.
· 250 megawatt of distributed generation owned by independent power producers (about 50 megawatt annually) to be solicited at least once per year. Bids capped at Southern California Edison Company's estimated levelized costs of electricity. An Independent Evaluator should be secured to oversee the solicitation for the first two years of the program and thereafter if a utility affiliate participates in that process. Contracts will be based on standard 20-year power purchase agreement contracts.
· A five-year program.
· Cost of service treatment for utility-owned generation portion of the program.
· No increase in authorized rate of return.
· Costs in excess of $3.85 per watt subject to a reasonableness review.
2. Within 30 days of the effective date of this decision, Southern California Edison Company shall file an Advice Letter with the Energy Division delineating the criteria and process for evaluating offers received and containing a draft standard 20-year power purchase agreement contract for use in the request for offer.
3. Southern California Edison Company shall transfer the balance in the Solar Photovoltaic Program Memorandum Account to the Solar Photovoltaic Program Balancing Account for future rate recovery after Commission's review of the balance in the energy resource recovery account reasonableness proceeding.
4. Southern California Edison Company shall file an annual compliance report in this proceeding as described in Section 6.2 of this decision. The first report shall be filed on July 1, 2010, and subsequent reports filed on July 1 thereafter. The filing of the compliance report does not re-open the proceeding.
5. Application 08-03-015 is closed.
This order is effective today.
Dated June 18, 2009, at San Francisco, California.
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
TIMOTHY ALAN SIMON
Commissioners
I reserve the right to file a concurrence.
/s/ Dian M. Grueneich
Commissioner
Commissioner Dian M. Grueneich Concurrence on
CPUC Approval of the SCE Solar PV Application (A.08-03-015)
June 18, 2009
Our Commission's approval of this application is a bold move, and I do not take this move lightly. I have seriously considered the ratepayer concerns articulated by The Utility Reform Network, the Commission's Division of Ratepayer Advocates, and others. Notwithstanding those concerns, I am voting in favor of Commissioner Bohn's alternate decision because I believe that commercial-scale rooftop solar photo-voltaic (PV) resources are a critical component to California's Renewable Portfolio Standard (RPS) program that have not yet been adequately deployed. Today's decision will provide ratepayer funding for a program to develop up to 500 megawatts (MW) of commercial-scale rooftop solar PV - a big step towards facilitating the rapid deployment of this technology. By approving both utility-owned and independent power producer projects, we intend to create a pool of information regarding the comparative costs and benefits of these two ownership structures that will inform future Commission decisions.
This Commission needs to focus on commercial-scale rooftop solar PV because this technology should provide a number of deployment benefits that few other renewable resources can match. It is constructed on existing rooftops, and does not require transmission investment. Thus, rooftop solar PV can be deployed quickly with minimal environmental impacts compared to other renewable technologies.
Thus far, for a number of reasons, our RPS program has failed to attract commercial-scale rooftop solar PV projects. I commend Southern California Edison Company (SCE) for taking the initiative to bring this proposal to us. While imperfect, SCE's proposal provided the framework for us to debate the value of this resource, and to move forward to facilitate deployment of commercial-scale rooftop solar PV in SCE's service area. SCE's proposal highlights that this Commission has not, thus far, developed an overall strategic plan and implementing roadmap to meet California's renewable goals. Instead, we address issues - like this one - piecemeal through isolated utility applications. I sincerely hope that going forward in the next year we focus our efforts on developing a coherent strategic plan to reach our 33% goals.
The issuance last week of the Commission staff's 33% RPS Implementation Analysis Preliminary Results Report is a first step because it acknowledges that there are differing paths to achieving the 33% goals, that many of our RPS policy objectives are mutually exclusive and in conflict with one another, and that the tradeoffs are being decided through isolated decisions in the utility procurement process, rather than through a coherent plan that prioritizes policy choices. We are spending billions of ratepayer dollars on RPS and betting our planet's future on its success. Today we take a useful step, but we must develop, vet in a public process, and adopt, as soon as possible, a coherent plan by this Commission for use of ratepayer dollars to achieve our RPS goals going forward.
