6. Assignment of Proceeding

Mark J. Ferron is the assigned Commissioner and Maryam Ebke is the assigned ALJ in this proceeding.

Findings of Fact

1. Since SPVP was approved in 2009, solar PV costs have fallen, the economic downturn has slowed development opportunities, and other programs have been created or modified that provide support for the one to two MW market segment, including rooftop solar PV facilities.

2. Modifications to SPVP are necessary to offer the best opportunity to secure savings for ratepayers resulting from falling PV costs, and may be designed to complement changes in other conditions and programs.

3. SPVP, as modified, neither cancels SPVP nor completely disrupts the market.

4. SPVP, as modified, still targets 200 MW for rooftop solar PV in the one to two MW size range.

5. The economic downturn has reduced the economic availability of rooftops.

6. SPVP, as modified, increases competitive pressure on rooftop owners and rooftop PV plants to reduce costs to compete with ground-mounted PV and other renewable facilities.

7. Reducing the UOG and IPP portions of SPVP (from 250 MW each to no more than 125 MW each, but at least 115 MW each absent additional authorization) provides the best opportunity to capture savings while continuing to secure several advantages of SPVP, including the maintenance of large enough UOG and IPP pieces to permit reasonable data collection.

8. The current trend of industry price reductions, and SCE's recent successes in bringing down costs, support a directly proportional reduction in the costs previously found reasonable by the Commission for the UOG portion of SPVP.

9. The Commission, upon its adoption of SPVP, considered and dismissed a range of ratemaking proposals to address limiting costs, sharing costs, or setting performance requirements, and nothing new on these matters is presented here.

10. Increasing the percentage from 10% (in the original SPVP) to 20% (in the UOG and IPP portions of SPVP as modified) maintains the same allowance for up to 50 MW ground-mounted facilities, thereby permitting SCE to accommodate existing obligations.

11. Retaining SPVP, as modified, at 500 MW promotes a reasonable degree of continuity and consistency with market expectations created by the original SPVP.

12. Needless complexity, inefficiency, disruption, and duplication would occur by establishing either IPP Revised (as a separate PV program within SPVP for projects up to 20 MW with no limit on ground-mounted facilities) or 225 MW as a set-aside within RAM (for rooftop solar less than two MW).

13. RAM already reasonably addresses several key elements of IPP Revised.

14. Consolidating 250 MW DC (equal to 225 MW AC) of SPVP with RAM will reduce developer confusion and enhance administrative efficiency.

15. Using RAM protocols promotes simplicity, efficiency and continuity.

16. The goals and efficiencies of SPVP can be reasonably incorporated in the capacity transferred to, and to be procured via, RAM to the extent SCE seeks a larger proportion of the 225 MW from the RAM non-firm peaking product and from projects that do not require significant interconnection upgrades.

17. Nothing presented here justifies reconsidering recently adopted solicitation parameters, or consideration of other solicitation parameters in a new advice letter.

Conclusions of Law

1. Petitioner reasonably justifies why the petition was not filed within 12 months of the effective date of the decision proposed to be modified.

2. The Commission should reasonably, responsibly, and appropriately respond to market and industry changes, including changes that permit SPVP modifications to enhance downward pressure on costs and prices for all renewable projects across a range of sizes and technologies, and should take reasonable opportunities to consolidate and simplify programs with overlapping goals.

3. The February 11, 2011 SCE petition for modification of D.09-06-049 should be granted in part, and denied in all other respects, in order to capture savings while promoting simplicity, maximizing program efficiency and minimizing market disruption.

4. The petition should be granted to the extent that it:

a. Reduces the 250 MW UOG portion to no more than 125 MW (but no less than 115 MW absent additional authorization), with the maximum amount of ground-mounted facilities increased from 10% to 20% (25 MW), but other parameters unchanged.

b. Reduces the 250 MW IPP portion to no more than 125 MW (but no less than 115 MW absent additional authorization), with the maximum amount of ground-mounted facilities increased from 10% to 20% (25 MW), but other parameters unchanged.

c. Procures the remaining 250 MW DC (225 MW AC) through RAM, subject to existing RAM protocols and procedures.

d. Requires SCE to develop 125 MW each of UOG and IPP, or as close to each as reasonable, with SCE explaining in periodic SPVP reports why it is not on target to achieve 125 MW each if that is the case, and what steps SCE is taking to achieve 125 MW each.

e. Proportionately reduces the total costs previously found reasonable.

f. Requires SCE to file a Tier 2 advice letter to specify the amount of each RAM product it will solicit in each remaining RAM auction for the 225 MW AC of capacity transferred to RAM, and the resulting amounts of each product in its new RAM total of 723.4 MW.

5. The petition should be denied to the extent it would reassign 250 MW to IPP Revised.

6. This order should be effective today so that the modified program may proceed expeditiously and thereby reduce costs, promote simplicity, maximize efficiency and minimize disruption.

ORDER

IT IS ORDERED that:

1. The February 11, 2011 Southern California Edison Company petition for modification of Decision 09-06-049 is granted in part, and denied in all other respects.

2. The Solar Photovoltaic Program (as adopted in Decision 09-06-048 and modified herein) is summarized in Attachment 1. The Renewable Auction Mechanism program (as adopted in Decision (D.) 10-12-048, modified in Resolution E-4414, and further modified herein) is summarized in Attachment 2. The modifications, as summarized in Attachments 1 and 2, are adopted.

3. Within 14 days of the date this order is issued, Southern California Edison Company (SCE) shall file a Tier 2 advice letter. The advice letter shall specify the amount of each product SCE shall solicit in each remaining Renewable Auction Mechanism (RAM) solicitation for the additional 225 megawatts (MW) of alternating current capacity to be procured via RAM, and the amount of each product in its new total RAM allocation of 723.4 MW.

4. Application 08-03-015 is closed.

This order is effective today.

Dated February 16, 2012, at San Francisco, California.

I abstain.

ATTACHMENT 1

SUMMARY OF

SOLAR PHOTOVOLTAIC PROGRAM (SPVP) FOR

SOUTHERN CALIFORNIA EDISON COMPANY

February 2012

Commission Decision 09-06-049 (June 18, 2009) adopted the Solar Photovoltaic Program (SPVP) for Southern California Edison Company. The program was implemented via Resolution E-4299 (January 21, 2010). This attachment summarizes SPVP, as modified by Decision 12-02-035, but complete terms and conditions are in Commission decisions and resolutions.

1. General Overview

The Solar Photovoltaic Program (SPVP) is a five-year program to develop 500 megawatts (MW) of direct current (DC) renewable generation. It is composed of three parts:

The UOG and IPP parts are each designed for development of up to 125 MW of solar photovoltaic (PV) generation on rooftops in the service area of Southern California Edison Company (SCE) from projects primarily in the one to two MW size range, with some exceptions.

The RAM part involves procuring 250 MW DC (225 MW AC) from the original SPVP (adopted in Decision 09-06-049) through RAM. RAM includes projects that would qualify under SPVP, but also includes other eligible renewable projects.

2. Utility-Owned Generation

SCE is authorized to own, develop, install, maintain and operate up to 125 MW (but no less than 115 MW absent additional authorization) of solar PV projects in the one to two MW range, located in SCE's service area, primarily on rooftops, over a five year program (about 25 MW annually, although SCE is encouraged to accelerate the development if practical and not adverse to program costs). Project costs are subject to cost of service ratemaking treatment, and are capped at $3.50 per Watt with a 10% contingency. Costs in excess of $3.85 per Watt are subject to reasonableness review. No more than 20% (25 MW) may be ground-mounted facilities, and the bulk of SPVP projects must be in range of one to two MW. SCE shall develop 125 MW, or as close to 125 MW as reasonable. SCE shall explain in 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. SCE shall, no later than 180 days before the end of the five year SPVP program, file a Tier 2 advice letter for authorization if UOG procurement will be less than 115 MW by the end of year five.

3. Independent Power Producer

SCE is authorized to procure via competitive solicitation up to 125 MW (but no less than 115 MW absent additional authorization) of solar PV generation owned by independent power producers. The solicitations shall be at least once per year. The generation shall primarily be from rooftop solar PV projects in the one to two MW range, located in SCE's service area, over a five year program (about 25 MW annually, although SCE is encouraged to accelerate the procurement if practical and not adverse to program costs). Bids are capped at SCE's estimated levelized cost of electricity ($0.26 per kilowatthour). No more than 20% (25 MW) may be ground-mounted facilities, and the bulk of SPVP projects must be in range of one to two MW. SCE shall procure 125 MW, or as close to 125 MW as reasonable. SCE shall explain in 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. SCE shall, no later than 180 days before the end of the five year SPVP program, file a Tier 2 advice letter for authorization if IPP procurement will be less than 115 MW by the end of year five.

4. Renewable Auction Mechanism

The RAM component of SPVP involves procuring 250 MW DC of SPVP through RAM (225 MW AC). This 225 MW AC is subject to RAM protocols and practices. Rooftop solar PV facilities in the one to two MW size range are eligible to participate along with all other eligible renewable projects. SCE shall file a Tier 2 advice letter stating, for the capacity transferred here, the amount of each RAM product it will solicit in each remaining RAM auction, and the resulting amounts of each product in its new RAM total of 723.4 MW. SCE is encouraged, but not required, to propose RAM products that incorporate SPVP goals for the capacity moved to RAM (e.g., most or all of the 225 MW procured from the non-firm peaking product that does not require significant interconnection upgrades).

(END OF ATTACHMENT 1)

ATTACHMENT 2

ATTACHMENT 2

SUMMARY OF RENEWABLE AUCTION MECHANISM (RAM)
PROGRAM RULES

January 2012

Commission Decision 10-12-048 (December 16, 2010) adopted the Renewable Auction Mechanism (RAM). Resolution E-4414 (August 18, 2011) modified the program. The program summary, as modified, is updated here to reflect the transfer of 250 MW from Southern California Edison Company's Solar Photovoltaic Program to RAM (in particular, see changes made in Section 2.a.III below). This attachment summarizes RAM, as modified, but complete terms and conditions are in Commission decisions and resolutions.

RENEWABLE AUCTION MECHANISM

1. Price Determination: Renewable Auction Mechanism (RAM)

· IOUs select projects in order of least-costly first, up to program capacity limit

2. Auction Design:

ii. Adjustment to the Program Capacity Limit: May occur in any appropriate proceeding or through a Tier 3 advice letter/Resolution, or a Resolution on the Commission's own motion

UTILITY

TOTAL PROGRAM (MW)

PER AUCTION (MW)

      SCE

723.428

171.529

      PG&E

420.9

105.2

      SDG&E

154.7

44.930

      TOTAL

1299.031

321.632

iv. Number of Auctions per Year: Two per year, every six months, held concurrently by all three IOUs; a project may bid into all three auctions.

v. Amount per auction: 25% of the total program allocation will be offered in the initial auction; unsubscribed capacity, or drop out capacity, is added to the next auction.

vi. Procurement Requirement: Each IOU must enter into a standard contract with each winning bidder up to the capacity limits in each solicitation and total program capacity limits. IOUs select on the basis of least costly projects first until the IOU fully subscribes its allocated capacity for that auction. IOUs have the discretion to not enter into contracts if there is evidence of market manipulation or if the bids are not competitive compared to other renewable procurement opportunities. The IOU must submit an advice letter explaining its decision not to enter into contracts.

· Products: Firm (baseload), non-firm peaking (peaking as-available), and non-firm non-peaking (non-peaking as-available) electricity

o IOU shall specify the amount of each product for the initial four auctions in the first advice letter filed pursuant to this order. Utilities are required to solicit and procure capacity up to the capacity limit for each solicitation.

o Project must submit eligibility information (e.g., generation profile, project characteristic information) corresponding to the product bid, as established by the IOU

· Selection: Each product is selected on the basis of price, least expensive first until the capacity limit in each solicitation is reached; IOU may normalize (adjust) bids to place bids on an equivalent basis before making least cost selection using method approved, if any, in the advice letter implementing RAM; IOUs should add the estimated transmission network upgrade costs to the bids for ranking purposes.

· Independent Evaluator: Utilities will employ an Independent Evaluator to assess the competitiveness and integrity of each RAM auction and submit the IE's report with its Tier 2 advice letter requesting approval of contracts resulting from those auctions.

3. Eligibility:

· Minimum Size: Minimum contract size of 1 MW, but projects 500 kilowatts and greater can aggregate to meet the minimum contract size of 1 MW. Projects can aggregate as long as they interconnect to the same p-node and the contract size does not exceed 5 MW

· Project Vintage: New and existing projects are eligible for RAM

· Location: Combined IOU service territories (e.g. a project bidding into SCE's auction can be located in either PG&E or SDG&E's service territory).

· Retail Customer/Third Party Ownership: Seller need not be a retail customer and the facility need not be located on property owned or under the control of a retail customer

· Utility Applicability: Southern California Edison Company (SCE), Pacific Gas and Electric Company (PG&E), and San Diego Gas & Electric Company (SDG&E)

· Project and Transaction Limit: 20 megawatts (MW)

· Full Buy/Sell or Excess Sales: Seller may elect either full buy/sell or excess sales

· Counting Excess Sales: Capacity associated with the transaction size is applied to the program cap.

· Seller Concentration: IOUs have the discretion to apply a seller concentration limit after the bids are received. PG&E is authorized to apply a seller concentration limit of 20 MW per seller per auction.

4. RAM Standard Contract:

· Contract Language: IOUs can use their individual contracts, but should start with a contract that is simple, streamlined, and has already been vetted by stakeholders through another CPUC program.

· Negotiations: Price, terms, and conditions are not negotiable.

o Length of Time to COD: Within 18 months of CPUC Approval, with one 6-month extension for regulatory delays. Seller can request a contract extension by providing a 60-day notice prior to the guaranteed commercial operation date.

o Development Deposit: $20/kW for projects 5 MW and smaller, and a $60/$90 per kW for intermittent and baseload resources, respectively, for projects greater than 5 MW and up to 20 MW in size, refundable upon achieving commercial operation or applied to the performance deposit; development deposit is due on the date of contract execution in the form of cash or letter of credit from a reputable U.S. bank; development deposit forfeited if project fails to come on line within 18 months or other 6-month extension granted by IOU.

_ For projects less than five MW: conversion of development deposit to performance deposit

_ For projects five MW and larger: 5% of expected total project revenues

_ Performance is required to be consistent with good utility (or prudent electrical) practices; project is obligated to have liability insurance against utility losses; the project is liable for an IOU's direct, actual losses; and project must perform consistent with generation profile or other characteristics for the product, to the extent stated in the Commission-adopted contract

_ Minimum deliveries of 140% of expected annual net energy production based on two years of rolling production

o Damages for Failure to Perform: Damages are limited to actual, direct damages; neither party is liable for consequential, incidental, punitive, exemplary or indirect damages, lost profits or other business interruption damages regardless of cause

o Force Majeure and Events of Default: Each RAM contract shall include a force majeure definition and provision

o Insurance: IOU discretion, submitted in implementation advice letter

o Scheduling Coordinator: Where possible, the contracting IOU shall be the scheduling coordinator for each project using the RAM, and the IOU shall bear the risk of scheduling deviations if the generator provides the IOU with timely information on its availability; the IOU can decline scheduling coordinator responsibilities only upon a written, affirmative request from the seller that the IOU not be the scheduling coordinator, or if unable to perform these duties

5. Project Viability Requirements

· Site Control: Bidder must show 100% site control through (a) direct ownership, (b) lease or (c) an option to lease or purchase that may be exercised upon award of the RAM contract

· Development Experience: Bidder must show that at least one member of the development team has (a) completed at least one project of similar technology and capacity or (b) begun construction of at least one other similar project

· Commercialized Technology: Bidder must show the project is based on commercialized technology (e.g., is neither experimental, research, demonstration, nor development)

· Interconnection Application: Bidder must show that it has filed its interconnection application. In addition, bidder must have completed a System-Impact Study, Cluster Study Phase 1, or have passed the Fast Track screens.

6. Market Elements

a. Preferred Locations: The IOUs must provide the "available capacity" at the substation and circuit level, defined as the total capacity minus the allocated and queued capacity. The IOUs should provide this information in map format. If unable to initially provide this level of detail, each IOU must provide the data at the most detailed level feasible, and work to increase the precision of the information over time. This information is to be available in the advice letter implementing RAM and updated on a monthly basis.

i. Each IOU should examine DG interconnection screening tools currently used to screen DG interconnection applications. The IOUs should evaluate how individual project studies could be automated to provide the requested data and a reasonable assessment of a DG project's impact on the distribution system.

ii. The IOUs should work with parties and Commission staff through the Renewable Distributed Energy Collaborative (Re-DEC) or other forums in order to improve the data, usefulness of the maps, and to discuss other issues related to the interconnection of distributed resources.

b. Project Milestones: Sellers shall submit a project development milestone timeline to the IOU upon RAM contract signing, and progress reports every six months. The only enforceable milestone is the commercial operation data (COD) (subject to a one 6-month extension for regulatory delays).

c. Relationship to Voluntary and Other Programs: 1,000 MW capacity limit does not include capacity subscribed under the Existing FIT (up to 1.5 MW, subject to expansion to three MW under SB 32). SCE is permitted to draw down its capacity limit with the 21 contracts it selected in November 2010 from the RSC solicitation, if the CPUC approves these contracts

d. FERC Certification: No FERC certification as a QF is required for a project to be eligible for RAM

e. Conveyance of RECs: RECs transferred in relationship to the amount of the purchase (for full buy/sell, the IOU buys the RECs coincident with the entire output; for excess sales, the IOU buys the RECs coincident with the purchased excess energy)

7. Regulation and Commission Oversight

a. Program Modifications: The Commission can modify any element of the program at any time through a Commission resolution.

b. Advice Letter Review: All executed RAM contracts from each auction are filed with the Commission in one Tier 2 advice letter.

c. Program Evaluation: RAM to be monitored and evaluated annually, with each IOU filing a report each year. The report shall be filed with ED and posted on the IOU's website. ED shall include RAM program information in the Commission's reports to the legislature on the RPS program.

Each annual report shall include information and evaluation on all relevant items and characteristics including but not limited to:

· Competition and competitiveness

· Auction design

· Time necessary to complete projects

· Auction timing

· Project status

· Analysis comparing the price and value of contracts with and without resource adequacy.

· Anything else determined by ED to be necessary for a complete report

· Measures of the requirements for a perfectly competitive market

· Measures of market power

· Seller concentration

· Data on each RAM results

· Information on the achievement of project development milestones for all executed RAM contracts

· Any other information necessary to present a complete report

e. Public Release of Aggregated Data: IOUs and ED shall make the maximum amount of RAM data public, including the following:

· Names of participating companies and number of bids per company

· Number of bids received and shortlisted

· Project size

· Participating technologies

· Quantitative summary of how many projects passed each project viability screen

· Location of bids by county provided in a map format

· Information on the achievement of project development milestones for all executed RAM contracts; reporting requirements are:

· All Necessary Permitting/Government Approvals Received? (Y/N)

· All Necessary Permitting/Government Approvals Filed? (Y/N)

· If Filed, Expected Date by Which All Necessary Permitting/Government Will Be Approved

· If Not Yet Filed, Expected Date by Which All Necessary Permitting/Government Will Be Filed

· State in Interconnection Process (Studies/Interconnection Agreement Signed/Construction)

f. Cost Recovery: RAM costs may be charged to bundled and departing customers consistent with current practice

g. Program Forum: IOUs will hold a program forum once per year in order to meet with sellers and discuss seller experience participating in an auction. The IOUs are required to:

· Notice all stakeholders of the date, time, location and methods for participation34 for each program forum;

· Issue a request for feedback from all stakeholders after the close of each solicitation in order to inform the agenda for the program forum;

· Provide CPUC staff with a draft of the agenda at least 14 days prior to the program forum;

· At the program forum, the IOUs shall provide sufficient time to address key issues identified in the request for feedback and the independent evaluator's report;

· At the program forum, the IOUs shall provide sufficient time for stakeholders to discuss their experience with the solicitation, interconnection process, or the program in general; and

· The independent evaluator should participate in the program forum.

8. Implementation Advice Letter: PG&E, SCE, and SDG&E shall file Tier 3 advice letters within 60 days of the date this order. The implementation advice letters shall include:

· Procurement protocols

· RAM standard contract

· Program implementation details

· Timing of RAM auctions

· Specific amounts of capacity and type of resources in each auction over the next two years

· Explanation of any normalization procedures used for bid selection process

· Detailed description of the generation profiles and characteristics that correspond with each product bucket

· Description of how IOU-proposed product eligibility requirements will provide reasonable assurance that a bid for one product will, if selected, deliver energy in a manner that corresponds to the generation profile associated with that

· Identify seller concentration limit, if any

· Provide the preferred locations map and a description of how the maps were computed

· Provide a simple methodology to measure the status of project development milestones

(END OF ATTACHMENT 2)

28 SCE's initial RAM procurement obligation was 498.4 MW. (D.10-12-048, Appendix A at 1.) The Commission modified the Solar Photovoltaic Program (SPVP) to authorize SCE procurement of 250 MW direct current (equal to 225 MW alternating current) of the initial SPVP through RAM, increasing SCE's RAM procurement obligation to 723.4 MW. (Decision 12-02-035.) SCE applied 144 MW from 15 contracts procured via SCE's 2010 Renewable Standard Contract (RSC) program to its RAM obligation. (Resolution E-4445, December 15, 2011.) This leaves 579.4 MW to be procured via RAM.

29 The additional 225 MW is procured over only the last three RAM auctions. SCE's first RAM auction sought 65.0 MW. SCE's net amount of 579.4 MW to be procured via RAM (see prior footnote), less the 65.0 MW sought in the first auction, leaves 514.4 MW to be procured over the last three auctions, or 171.5 MW per auction (plus any unsubscribed or drop out capacity brought forward).

30 SDG&E total and per auction amounts are as adjusted by D.12-02-002.

31 The RAM program total of 1,299 MW is composed of the initial 1,000 MW (D.10-12-048), plus 74 MW for SDG&E (D.12-02-002), plus 225 MW for SCE (Decision 12-02-035).

32 The additional 299 MW (74 MW SDG&E, 225 MW SCE) is procured over only the last three RAM auctions. The first RAM auction was 250 MW, and the last three are 325.0 MW.

33 If a project elects to pursue excess sales, the total project size, including the capacity associated with the wholesale transaction under RAM as well as the capacity associated with onsite load, is counted as part of the project's capacity for purposes of project eligibility. However, only the capacity associated with the wholesale transaction will count against the capacity limit under RAM.

34 The IOUs should utilize telecom and web-based technologies to facilitate remote participation.

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