3. Discussion

SCE essentially petitions for three modifications to SPVP:

1. Reduce the 250 MW UOG portion to no more than 125 MW, with the amount of ground-mounted facilities increased from 10% to 20%, but other program and solicitation parameters unchanged.

2. Reduce the 250 MW IPP portion to no more than 125 MW, with the amount of ground-mounted facilities increased from 10% to 20%, but other program and solicitation parameters unchanged.

3. Reassign the remaining 250 MW to a separate competitive solicitation within the SPVP called "IPP Revised" exclusively targeted on solar installations but subject to several modified parameters:

a. bids permitted for projects up to 20 MW;

b. no limitation on the number of ground-mounted installations;

c. startup deadline extended from 18 months after contract execution to 36 months after Commission approval; and

d. revise the SPVP PPA to parallel the current pro forma PPA used in the annual RPS Request for Proposals.

We grant the petition with limited changes. We do this to reduce costs, promote simplicity, maximize program efficiency, and minimize market disruption. Specifically, we grant the proposal to reduce both the UOG and IPP portions from 250 MW to no more than 125 MW (but no less than 115 MW absent additional authorization), with the amount of ground-mounted facilities increased from 10% to 20%, but other parameters unchanged. We do not reassign the remaining 250 MW to IPP Revised but use RAM to procure this capacity, subject to RAM parameters and protocols that are in effect at the time of contracting.6 We also reduce the total cost estimates we previously found reasonable to parallel the reduction in the UOG potion (from 250 MW to no more than 125 MW).

We first consider whether or not to make any changes to SPVP. In support, petitioner and several parties claim that conditions have substantially changed since SPVP was approved. We agree for at least the following three reasons that limited modifications are reasonable based on changed conditions.

First, solar PV costs have fallen and program modifications offer the best opportunity to secure savings for ratepayers. In particular, SCE recently obtained 140 MW of solar PV through its 2009 RSC program at prices equal to the 2008 market price referent (MPR), and 144 MW of solar PV through its 2010 RSC program at prices below the 2011 MPR.7 The most recent prices in particular are at a substantially lower procurement cost than assumed in our approval of SPVP. Other evidence also shows solar PV prices are falling.8 SCE estimates the savings from its proposed SPVP modifications to be about $300 million in present value of revenue requirements. While some parties question SCE's estimate, no party claims the proposed modifications would produce no savings.9 We pledged in adopting SPVP that we would carefully monitor program progress, examine ways in which the program could be improved, and adjust the program as appropriate. Modifications to SPVP are now necessary and appropriate to capture valuable savings.

Second, the lingering economic downturn has slowed development opportunities. New roofs have the greatest chance of being structurally and economically suitable for coverage by solar panels. The weak economy, however, has diminished opportunities by reducing the amount of new large commercial and industrial construction with rooftop space available for solar PV installations.

Lastly, part of our motivation in adopting SPVP was to reduce the gap in development of one to two MW wholesale distributed solar projects. Programs have been now created or modified, however, that provide support to the one to two MW market segment, including rooftop solar PV facilities.

For example, we are currently administering a feed-in tariff (FIT) totaling 498 MW that involves the three largest IOUs, for projects up to 1.5 MW at a price equal to the MPR. We are considering changes to that program which increase project size (to 3 MW), increase program size (to 750 MW state-wide including publicly owned utilities), and may modify the price.10 Rooftop solar PV is eligible to participate in FIT.

We also recently adopted a new procurement tool which we call RAM. RAM provides a simplified approach for cost-effective renewable projects to secure long-term purchase commitments from utility buyers. Rooftop solar PV projects in the one to two MW size may participate.11

Silverado Power also points out that net energy metering (NEM) caps have been raised (allowing for more development of behind the meter solar installations), and opportunities improved for customers to sell excess power to the utility at a reasonable rate (if unable to use all the solar PV generated on-site).12 Thus, each of these new programs, or program changes, reduces the gap in development of one to two MW wholesale distributed solar projects that in part motivated our adoption of SPVP.

Opponents present several arguments in support of denying the petition. We are not persuaded for the following reasons.

Opponents contend that the proposed modifications are not a fine tuning of SPVP, but effectively a cancellation. Even if not a full cancellation, opponents assert the changes completely disrupt market expectations, thereby failing to provide participants with sufficient assurances to permit costly resource commitments. We disagree.

As proposed, 200 MW are still targeted for rooftop PV.13 This is not a cancellation of SPVP.

It is also not a total disruption. To be successful, developers must nimbly respond to market changes (e.g., changes in interest rates, input costs, input availabilities, inflation, opportunity costs). Similarly, the Commission must responsibly respond to changes when appropriate. We reach the right balance by not cancelling SPVP but scaling back the rooftop solar portion based on current conditions. We do this while maintaining the total program at 500 MW and increasing the opportunity for competition among technologies. This is after notice and opportunity for comment on the petition for modification, public review of a draft decision subject to comment, and adoption of a decision in a public meeting subject to public comment. Each step of this process over many months provides reasonable information to the market, along with opportunities for public participation. In short, while we make changes, these changes are only after reasonable notice, are incremental, and do not radically disrupt the market.

Even assuming for the sake of argument there might be some disruption, opponents present inadequate quantification. For example, we have no evidence to conclude that, to the extent there may be disruption, that it is more than a few MW or a few dollars, or that disrupted projects, if any, cannot reasonably use other programs (e.g., FIT, RAM, NEM, Qualifying Facility, bilateral negotiations) to reach desired outcomes with minimal, or even beneficial, effect.14 Absent quantification, we are unable to compare the possible costs, if any, with the approximately $300 million in savings.

Another argument advanced by opponents is that SPVP is designed to advance specific solar due to its unique benefits (i.e., rooftop PV in the one to two MW range) not just any solar (i.e., including ground-mounted installations up to 20 MW). SPVP should not be modified, opponents contend, so that the Commission's intent to advance specific solar is not disturbed. We are not convinced.

SPVP, as modified, still advances the specific projects at issue here by directing 200 MW to rooftop solar PV in the one to two MW size. Moreover, small rooftop solar may compete for the 225 MW moved to RAM.

The modifications to SPVP adopted here do not change our commitment to advancing small sized rooftop solar. With today's order, however, we take the important additional step of increasing the amount of capacity subject to competition by more than one type of solar project, since RAM allows all types of solar facilities to participate. We also increase the amount of capacity subject to competition by projects up to 20 MW, and by more than one type of technology. We do this with the goal of enhancing the downward pressure on prices from all renewable project sizes and technologies, including small rooftop solar, for the benefit of consumers and the state.

Opponents also claim that the economic downturn has not reduced the availability of rooftops. Rather, they contend that effectively all the roofs that were in place in 2009 are still in place. To the contrary, the physical quantity of roofs may not have materially changed but, as convincingly argued by SCE, Recurrent Energy, Silverado Power and others, several factors often make older roofs not cost-effective for solar installation. For example, the lifespan of a typical roof is less than that of a solar facility (adding cost of system removal for roof repair and reducing the total number of candidate roofs when the developer wants to focus only on those that start with a full lifespan). Structural suitability further limits supply or increases costs (for roof reinforcement to survive wind load and solar facility weight). Even if the roof is reasonably new (so it has a long lifespan) and structurally suitable, the developer must secure multiple layers of agreements (e.g., from building owners, lenders, investors, tenants; developer's lenders). Multiple agreements increase transaction costs and risks. Further, rooftops with enough scale for efficient development are often clustered within a concentrated area, triggering network upgrades (or at least the need to study upgrades, adding study costs and time delays). Thus, these factors make many existing rooftops economically unavailable, with the economic downturn further reducing opportunities.

Joint Solar Parties claim in response that rooftop availability may actually have increased due to the economic downturn as rooftop owners become even more interested in earning revenue through a roof lease. To the contrary, economically rational rooftop owners take steps to maximize profits during all stages of an economic cycle. We have no basis to assume that rooftop owners were not previously economically rational, or are only now becoming so. We also have no evidence that this particular economic downturn has materially changed the dynamics of rooftop owners seeking to maximize profits. If anything, the characteristics of this economic downturn have hindered, not helped, building owners make additional capital investments.15 Moreover, no data is presented here to quantify the effect, if any, of changed variables (e.g., interest rates, roof rental charges, building vacancy rates) on rooftop availability and, absent compelling data, we are not persuaded that the availability has increased as a result of current economic circumstances.

SCE estimates its proposed modifications would generate about a $300 million savings in the present value of revenue requirements. SCE calculates the savings based on (a) moving 250 MW to IPP Revised (125 MW from UOG and 125 MW from IPP), and (b) using the difference between the levelized cost of 2010 RSC winning bids and SPVP prices (UOG levelized cost of $0.26/kWh; IPP levelized cost of winning bids in the most recent SPVP solicitation).

Opponents point out that the levelized cost of the 2010 RSC winning bids is primarily driven by larger scale ground-mounted, rather than rooftop, PV facilities. They contend that that Commission already found that unique advantages justify a "niche" program focused on rooftop solar PV, and the Commission should not allow SCE to shift the program focus to ground-mounted facilities. CARE argues that it is invalid to use projects in the RSC due to their large size (20 MW) and economies of scale compared to the targeted market of one to two MW rooftop solar PV. We disagree.

Unique advantages (discussed more below) continue to justify a program focused on rooftop solar PV, but current economic conditions necessitate that we do this at a reduced level. We have addressed and dismissed above that granting this petition either eliminates the rooftop program, or unreasonably disrupts market expectations, even if as modified more ground-mounted facilities may participate. We also note that not all projects in RSC are large (e.g., 20 MW), as CARE suggests, but that eight out of 15 solar PV projects in the 2010 RSC are 5 MW or less. (See Resolution E-4445.) In fact, the evidence from the RSC program shows that solar PV prices are falling, with prices for actual PV facilities-even those that are small-to be less costly than assumed for SPVP. Modifications to SPVP are necessary to capture these savings. At the same time, these modifications increase the competitive pressure on rooftop facilities to reduce costs to compete with ground-based and other renewable facilities.

Having decided to make modifications, we now turn to the specific proposals.

SCE proposes that the UOG portion be reduced from 250 MW to no more than 125 MW. Parties opposing the petition contend the SPVP program should not be changed, with the UOG piece remaining at 250 MW. On the other hand, SCE's proposal is supported by some parties while others contend total elimination of UOG would produce the most savings.

We continue the SPVP but reduce the UOG portion to 125 MW because we are motivated to secure savings. We identified several factors for adopting SPVP initially, and those factors continue to apply. For example, SPVP continues to be a reasonable way to encourage development of distributed renewable resources in the one to two MW range. SPVP projects can be located near load (thus avoiding the need to build new transmission and helping reduce local congestion), and rapid deployment of SPVP facilities can advance California's broad goal of developing renewable energy (particularly specific development of distributed rooftop solar PV projects). There is also an important role for UOG in California's electricity industry, and a program with comparable UOG and IPP portions will provide important information about the costs and benefits of each form of renewable facility ownership, including both the sharing of risks between various stakeholders and the ultimate effect on ratepayers. A 50% reduction is reasonable to secure savings while maintaining a large enough UOG piece to permit reasonable collection of data.16

SCE proposes a level of no more than 125 MW, but does not sufficiently explain the "no more than" limitation. We reduce the UOG portion to no more than 125 MW as proposed, but we expect SCE to develop 125 MW, or as close to 125 MW as reasonable. We also expect SCE to explain in its periodic SPVP reports why it is not on target to achieve 125 MW of UOG if that is the case, and explain what steps it is taking to achieve 125 MW.17 We remain committed to SPVP advancing distributed small rooftop solar PV in the one to two MW size range. We also want a program of sufficient size to produce reliable data. Therefore, if SCE plans to own less than 115 MW of UOG by the end of year five, SCE must file a Tier 2 advice letter seeking authorization. The advice letter must be filed no later than 180 days before the end of year five.

A reduction in the UOG portion also requires reassessing our previous reasonableness finding with respect to certain costs. That is, in 2009, we found SCE's cost estimates for a 250 MW UOG program reasonable. (D.09-06-049 at 35-36.) Those estimates over the 2008 through 2014 program period were approximately $41.31 million (2008 dollars) in operation and maintenance (O&M) expenses, and $962.5 million (2008 dollars) in direct capital expenditures ($875.0 million (2008 dollars) in direct capital plus a 10% contingency). This is based on a project cost target of $3.50 per Watt with a 10% contingency ($3.85 per Watt including contingency), with costs in excess of $3.85 per Watt subject to a reasonableness review. (D.09-06-049, Ordering Paragraph 1.)

DRA recommends the Commission reduce SCE's authorized expenditures by half. We agree. For a 125 MW UOG program, we reduce the reasonable cost estimates over the 2008 through 2014 program period to approximately $20.655 million (2008 dollars) in O&M expenses, and $481.25 million (2008 dollars) in direct capital expenditures ($427.5 million (2008 dollars) direct capital plus a 10% contingency). These total costs remain based on $3.50 per Watt ($3.85 per Watt including contingency), with costs in excess of $3.85 per Watt subject to a reasonableness review. If SCE develops less that 125 MW, the reasonable total cost estimates will be based on the number of watts times $3.50 per Watt ($3.85 per Watt including contingency), with costs in excess of $3.85 per Watt subject to a reasonableness review.

SCE continues to express its concern that lost economies of scale due to a reduced UOG program size may have a negative impact on project costs, including costs of contractual obligations to which SCE might be subject due to decreasing its build-out commitments. SCE notifies the Commission that "one impact of granting this Petition could be that SCE may not be able to meet the cost target and reasonableness threshold set in D.09-06-049." (Petition at 9, footnote 31.) We are convinced by DRA, however, that the directly proportional reduction advocated by DRA is supported by both current industry price trends and SCE's recent successes in bringing down costs. Moreover, we agree with DRA that contractual obligations, if any, due to decreasing build-out are sufficiently uncertain to prevent a fully informed decision here (and do not support either adjusting the cost estimates upward or retaining the UOG program at 250 MW due to unquantified concerns about negative effects on project costs). Utilities always have an affirmative, ongoing obligation to reasonably manage contracts and projects, and to carry their burden of proof before the Commission when seeking cost recovery. Thus, we expect SCE to utilize each applicable contract provision and reasonable negotiation opportunities to ensure that these costs, if any, are minimal. We also require SCE to make a clear showing at the appropriate time demonstrating that it took all reasonable and feasible steps to minimize or eliminate these costs.

TURN, Greenlining, and CSS make various ratemaking proposals regarding the UOG portion of SPVP that involve limiting costs, sharing costs, or adopting minimum performance requirements. For example, TURN recommends that we (a) order SCE to consider levelized energy prices in selecting its UOG projects and (b) adopt a performance requirement (such as the 80% output performance requirement adopted for PG&E's program in D.10-04-052).18 Greenlining proposes that we modify our earlier order to (a) affirmatively cap UOG project costs at $3.85 per Watt (without subjecting costs above $3.85 to a reasonableness review) or (b) split costs above $3.85 per Watt by a ratio of 80% ratepayers and 20% shareholders.19 CSS says SCE should be paid for production from its UOG facilities at the average price of comparable winning IPP bids.20 We do not adopt these recommendations.

We already considered and rejected proposals relative to limiting costs, sharing costs, and setting performance standards. (D.09-06-049 at 36-40.) We there explained our ongoing duty to ensure that utility investments are used, useful, and reasonably operated, with only just and reasonable investment and operating costs recovered from ratepayers. We have long-standing policies and procedures in place under which utility projects are reviewed to ensure that approved investments are made in a reasonable manner, that resulting facilities actually fulfill their stated purpose, and that continuing ownership and operations are reasonable. We do that in a range of proceedings, including but not limited to a General Rate Case, Energy Resource Recovery Account proceeding, or Certificate of Public Convenience and Necessity proceeding. Nothing presented here convinces us to revisit these issues.

SCE proposes that the IPP portion be reduced from 250 MW to no more than 125 MW. SCE's proposal is supported by several parties. Parties opposing the petition contend the SPVP program should not be changed, with the IPP portion remaining at 250 MW. Others propose increasing the IPP portion to 375 MW (by shifting SCE's 125 MW reduction to the IPP portion.)21 For the following reasons we reduce the IPP portion to no more than 125 MW.

We reject the idea of increasing the allocation to 375 MW, or making no change and retaining 250 MW, since reductions are necessary to capture savings. We do not eliminate the IPP portion of the program, however, since for the reasons stated above we continue to support an IPP portion focused on rooftop solar PV. We reduce the size to no more than 125 MW to capture a reasonable amount of savings while maintaining a large enough IPP piece to permit reasonable collection of data.22

SCE proposes a level of no more than 125 MW, just as it did with the UOG portion, but does not sufficiently explain the "no more than" limitation. We reduce the IPP portion to no more than 125 MW as proposed, but we expect SCE to secure 125 MW from IPPs, or as close to 125 MW as reasonable. We also expect SCE to explain in its periodic SPVP reports why it is not on target to achieve 125 MW of IPP if that is the case, and explain what steps it is taking to achieve 125 MW. We remain committed to SPVP advancing distributed small rooftop solar PV in the one to two MW size range. We also want a program of sufficient size to produce reliable data. Therefore, if SCE plans to procure less than 115 MW of IPP PPAs by the end of year five, SCE must file a Tier 2 advice letter seeking authorization. The advice letter must be filed no later than 180 days before the end of year five.

SCE proposes that the current 10% limitation on ground-mounted facilities be increased to 20% for both the UOG and IPP portions, but other SPVP parameters remain unchanged. In support, SCE says it has made commitments for approximately 25 MW of ground-mounted facilities in the UOG portion, and has already signed PPAs from 22.4 MW of ground-mounted projects in the IPP portion. An increase in the percentage, according to SCE, will allow it to accommodate existing obligations as project owner and program administrator. We agree.

SPVP currently is a 500 MW solar PV program (250 MW UOG and 250 MW IPP) with no more than 10% (50 MW) allowed to be ground-mounted facilities. As proposed, the specific UOG and IPP portions of SPVP total a 250 MW solar PV program (125 MW UOG and 125 MW IPP) with no more than 20% (50 MW) allowed to be ground-mounted facilities. That is, increasing the percentage to 20% maintains the same authorization of 50 MW for ground-mounted facilities. Accordingly, we authorize SCE to procure up to, but no more than, 25 MW of ground-mounted facilities in each of the UOG and IPP portions of the SPVP. This permits SCE to accommodate existing obligations and is reasonable.

Other program parameters have been established. (See D.09-06-049 and Resolution E-4299.) No party recommends changes in these other parameters, and we authorize none.

SCE initially proposed that the 250 MW residual within SPVP be reassigned to IPP Revised, a separate competitive solicitation within SPVP. Opponents of SCE's petition propose rejection of IPP Revised. DRA proposes rejecting IPP Revised or, in the alternative, transferring the 250 MW to RAM. Solar Alliance supports moving the 250 MW to RAM subject to certain caveats. In its final reply, SCE says that it does not oppose increasing its RAM allocation, but only as long as this increment is consistent with RAM protocols and not a separate set-aside of rooftop solar projects within RAM. For the reasons explained below, we adopt a 225 MW increase in RAM, including the provision that this increment be procured consistent with existing RAM protocols and not as a separate set-aside within RAM.23

One option is to eliminate the 250 MW residual (after reducing the specific UOG and IPP portions to a total of 250 MW). We do not do this because there is merit in keeping the program at 500 MW. Maintenance of 500 MW promotes a reasonable degree of continuity and consistency with market expectations created by our first adopting that size program in 2009.

We do not, however, reassign the 250 MW to IPP Revised. As originally proposed by SCE, IPP Revised would be a new program within SPVP exclusively targeted on solar installations but subject to several modifications. Creation of a separate subset within SPVP (including several unique modifications) adds needless complexity and potential inefficiencies. For example, it requires stakeholders to understand and address multiple programs and program subsets containing a range of protocols, terms, and conditions. The range creates the potential for, if not actual occurrence of, confusion and conflicts among different program elements. It creates undesirable disruption more than 2.5 years after our first adopting a five year SPVP. It also, if modified as proposed by SCE, needlessly duplicates other programs.

RAM, on the other hand, already reasonably addresses several key elements of IPP Revised (e.g., up to 20 MW per project, no limitation on ground-mounted facilities, startup from Commission approval of PPA, standardized PPA). We agree with DRA that we should consolidate renewable programs when they have overlapping goals and characteristics, not create duplicative new programs. As DRA also says, consolidating the 250 MW with RAM will reduce developer confusion (as to which of many renewable programs is appropriate for a developer's circumstances) and enhance administrative efficiency (since SCE, Energy Division and the Commission only need to administer and track information in the RAM program, not a similar but slightly different subset within SPVP).

We do not create a subset within the expanded RAM for small rooftop solar for the same reasons we do not adopt IPP Revised. That is, we decline to require that this 225 MW increment be specifically procured from rooftop solar less than two MW per project within RAM because doing so would create needless complexities, inefficiencies, disruptions, and duplications among programs. We adopted RAM to be a simplified, efficient procurement tool. We do not plan to disrupt those objectives here.

Solar Alliance proposes that a preference be given to rooftop solar facilities in the up to two MW range. We decline to do so. RAM selection is price-driven. Application of a preference for one type of facility would unreasonably deviate from adopted RAM protocols.

Stakeholders are familiar with RAM, the first auction has occurred (November 2011), and upcoming auctions are on an established and known schedule (allowing stakeholders to reasonably plan). We use existing RAM protocols without changes, subsets or preferences so that RAM remains simple, efficient, consistent and reasonably stable.

In order for SPVP objectives to be met, Solar Alliance recommends that the transferred capacity be procured from the peaking as-available RAM category.24 SCE strongly opposes a set-aside or preferential treatment in RAM. We agree with SCE, but encourage SCE to reasonably incorporate SPVP goals in the 225 MW added to RAM.

RAM procurement by utilities is from three product categories, and utilities must specify before an auction the amount of each product to be sought.25 We agree with SCE, as explained above, that there should be no preference or specific set-aside for rooftop solar installations up to 2 MW within RAM. At the same time, utilities are permitted to propose the amount of each product to be solicited in each RAM auction, subject to parties' comments. SCE may propose seeking a large portion, or all, of the additional 225 MW from the non-firm peaking product (which will tend to be filled by solar technologies), and from products that do not require significant interconnection upgrades (which will likely be from smaller projects).26

SCE should file a Tier 2 advice letter consistent with existing practice that specifies the amount of each product it will solicit in each remaining RAM auction for the 225 MW of increased capacity resulting from this decision. We encourage, but do not require, SCE to propose an amount that reasonably takes into account SPVP goals, with a focus on small rooftop PV systems. The advice letter should also identify the resulting amounts of each product in its new RAM total of 723.4 MW (of which 144 MW is met from projects procured via its 2010 RSC program).

Finally, SCE recommends for the IPP Revised (or RAM) capacity at issue here that (a) the startup deadline be 36 months from Commission approval of the project-specific PPA (rather than 18 months from contract execution) and (b) the PPA provisions conform to the current pro forma contract used in its annual RPS Renewable Request for Proposals. SCE also recommends that other solicitation parameters be resolved through the advice letter process.

We decline to adopt these provisions. First, we have already (a) modified the startup period to be 18 months from Commission approval (rather than contract execution), (b) considered and rejected 36 months, and (c) decided the terms of the RAM PPA (including similarities to, and differences from, the RPS annual solicitation pro forma). (See Resolution E-4414.) Nothing provided by parties here convinces us to reconsider these provisions now. Second, we will not entertain new, or variations on other, solicitation parameters in an additional advice letter. We have already weighed the alternatives and decided the terms of the RAM PPA. We require the use of the RAM PPA in place at the time of contracting in order to promote simplicity, maximize program efficiency, and minimize market disruption.

6 We explain below that for procurement via RAM we change the 250 MW in SPVP to 225 MW in RAM. This converts the DC capacity used in SPVP to alternating current (AC) capacity used in RAM. (See SCE's January 31, 2012 Comments on the Proposed Decision at 2-3).

7 Resolutions E-4359 and E-4445.

8 February 11, 2011 SCE Petition for Modification, Appendix B (Declaration of Mark E. Nelson).

9 DRA asserts that reducing SCE's authorized program expenditures by half results in "significant ratepayer savings above and beyond SCE's projected $300 million in present value revenue requirement (PVRR)." (January 31, 2012 DRA Comments at 3.) Clean Coalition contends that SCE's analysis is flawed and its estimate overstated, but "[i]n no way does the Clean Coalition claim that the proposed modifications would produce no savings." (January 31, 2012 Clean Coalition Comments at 14.)

10 Pub. Util. Code § 399.20, as amended by Senate Bill (SB) 32 and SB 2 (First Extraordinary Session).

11 The minimum project size eligible to participate in RAM is 1 MW, but projects as small as 500 kilowatts may aggregate output to reach the minimum of 1 MW, as long as they do not exceed 5 MW. (Resolution E-4414 at 8 and Attachment C, item 3, bullet 1 at 57.)

12 Silverado Power March 14, 2011 Response at 4-5 (citing Assembly (AB) Bill 920 (2009) and AB 510 (2010), amending Pub. Util. Code § 2827).

13 UOG and IPP portions total 250 MW (125 MW each), with 80%, or 200 MW, targeted on rooftop PV.

14 Joint Solar Parties assert that a recently executed agreement between SCE and a major solar producer and installer to produce up to 200 MW, or 80%, of the solar capacity needed for the UOG portion will be cancelled. (March 14, 2011 Response at 8.) On the other hand, we note that by adopting SCE's proposal this decision retains the combined UOG and IPP portions of the modified SPVP at 250 MW (200 MW rooftop and 50 MW ground mounted). We have inadequate information to conclude that the 200 MW cited by Joint Solar Parties cannot successfully participate in this 250 MW portion of the SPVP, the 225 MW to be procured via RAM, or other programs. Nor do Joint Solar Parties present sufficient information to compare the effect, if any, with the approximately $300 million of benefits. We also lack information on whether the solar producer or other agreement signatories can still fulfill their part of the contract, or the terms for failure to do so.

15 For example, this downturn (resulting from the nearly complete financial market meltdown in 2008) is characterized by large relative reductions in real estate values, significantly increased difficulty in obtaining credit, and increased building vacancy rates.

16 At one to two MW per project, a UOG portion of up to 125 MW still involves between about 62 and 125 rooftop solar installations.

17 Annually, on July 1 of each year, SCE files an SPVP compliance report. (See D.09-06-049 at 38-39, and Ordering Paragraph 4.)

18 March 14, 2011 TURN Response at 3.

19 March 14, 2011 Greenlining Response at 5.

20 March 5, 2001 CSS at 13-14.

21 March 5, 2011 CSS Response at 14.

22 At one to two MW per project, an IPP portion of up to 125 MW still involves between about 62 and 125 rooftop solar installations.

23 The capacity in SPVP (as originally proposed by SCE in this proceeding and adopted with modifications in D.09-06-049) is DC. The capacity in RAM, however, is alternating current (AC). PV systems convert DC to AC for use in the electrical distribution grid. Similarly, a conversion must be made of the 250 MW DC in SPVP when that same amount of capacity is to be procured as AC electricity via RAM. We use a factor of 0.9 based on the record in the proceeding (and decline to use SCE's newly proposed 0.8 conversion factor). (See January 31, 2012 SCE Comments on Proposed Decision at 3, citing Exhibit SCE-1, Rev. 1, p.1, footnote 1.)

24 Solar Alliance identifies these SPVP objectives as: (1) advancement of specific solar technology (i.e., rooftop solar) and (2) filling an identified gap in development of renewable projects in the one to two MW range. (November 7, 2011 Response at 2.)

25 The product categories are: firm (baseload), non-firm peaking (peaking as-available), and non-firm non-peaking (non-peaking as-available). (See Resolution E-4414, Attachment C.) Utilities were required to specify the amount of each product for the initial four auctions in the first advice letter. (D.10-12-048.) SCE reports that for its first RAM solicitation on November 15, 2011, it sought a total of 65 MW, with targets of 55 MW peaking, 5 MW non-peaking, and 5 MW baseload (including discretion to be +/- 20 MW in each category so long as the total is within +/- 20 MW). (November 10, 2011 Reply at 4.)

26 One reason the Commission adopted RAM is that it encourages "the development of resources that can utilize existing transmission and distribution infrastructure..." (D.10-12-048 at 2.) The Commission requires IOUs to provide information and maps to help bidders locate projects where no or minimal transmission or distribution upgrade costs are involved. (Id., Appendix A, at 5, item 6.a.) Smaller, compared to larger, projects will tend to be able to use surplus transmission and distribution before triggering upgrades. Economically rational bidders will include transmission and distribution costs in their non-negotiable RAM bids, thereby making bids that require transmission or distribution upgrade costs relatively less price-competitive. Finally, in evaluating bids, IOUs "shall add the most recent estimated interconnection study costs of transmission network upgrades resulting from the project's interconnection study to bid prices for ranking purposes." (Resolution E-4414, Ordering Paragraph 11 at 46; emphasis in original not included here.) Thus, smaller rooftop solar PV projects may have a cost advantage in RAM, but we also allow ground-mounted solar and other projects up to 20 MW to vigorously compete. In short, to the extent that solar rooftop PV technology is a cost-effective and competitive resource (because it avoids costly interconnection upgrades, for example), it will be able to successfully compete in RAM.

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