5. Amended Petition
On February 8, 2008, FCE filed an amended petition containing further information in support of its petition and amending its initial request. FCE now asks that the Commission raise the 1 MW incentive cap solely for renewable fuel projects, establish tiered incentives for capacity over 1 MW, and approve the increased incentives on a two-year pilot basis, with extension only upon Commission review.
The amended petition includes two additional declarations containing financial information and analysis on the need for incentives to encourage development of larger fuel cell projects, the efficiencies and economies of scale of fuel cell projects larger than 1 MW, GHG emissions benefits, and financial impacts of tiered incentives. In its amended petition, FCE provides information on two potential projects larger than 1 MW it is working to develop, and it claims incentives are required up to 3 MW to make the payback period for these projects acceptable to potential customers. FCE contends larger projects are better able to deliver cost-effective solutions for wastewater treatment operators because the cost of the fuel treatment system and other external costs of the fuel cell, including mechanical and electric systems and installation, become less significant as project size increases. (FCE Amended Petition, 2/8/08, Declaration of Jeff Cox.) The amended petition also includes data from the SGIP Sixth Year Impact Evaluation, dated August 2007, to support FCE's contention that renewable fuel cells attain the highest net GHG reductions of any participating SGIP technology. (Id., p. 13.)
The following parties filed comments on the amended petition: Californians for Renewable Energy (CARE), CCSE, Debenham Energy LLC (Debenham), SCE, TechNet,4 and UTC. SCE and CCSE support FCE's amended petition, although SCE suggests the Commission dedicate a percentage of SGIP funds to projects below 1 MW.
CARE, TechNet and UTC oppose the amended petition. UTC comments that the benefits claimed by FCE in its amended petition are inaccurate. UTC disputes FCE's claim that increased funding to large projects will result in market transformation for fuel cell technology. In addition, UTC maintains the mechanisms suggested in the amended petition to preserve funds do not mitigate UTC's concern about budget depletion and lack of funding for small DG projects. CARE echoes this concern that raising the incentive cap to 3 MW will deplete SGIP funds more quickly and benefit a few large companies rather than encourage development of the industry as a whole. TechNet contends that retaining the 1 MW cap on incentives will allow more Californians to benefit from the program, fostering greater competition, innovation, and cost reduction. TechNet urges the Commission to promote fuel cell competition in a technology neutral fashion rather than allowing a vast portion of the SGIP budget to benefit only a few large projects.
In a ruling dated February 14, 2008, the Administrative Law Judge (ALJ) asked for comment on whether the Commission should consider increasing the cap on incentives for eligible wind DG projects as well as renewable fuel cells, as requested in the amended petition. SCE opposes increasing the incentive cap for wind projects without additional information. Debenham, a renewable energy consulting firm, supports the idea, arguing that wind projects need a higher incentive cap for technology-specific reasons. Specifically, Debenham contends the intermittent nature of wind technology is constrained by the 1 MW incentive cap designed to favor to photovoltaics, and this has put a damper on wind participation in SGIP. Further, Debenham supports an incentive cap increase so that fuel cells and wind can share equally in SGIP benefits. CCSE echoes the comments of Debenham that wind projects have experienced difficulty in the below 1 MW sizing range and raising the incentive cap could stimulate projects greater than 1 MW.
4 TechNet is a bipartisan political network of chief executive officers and senior executives that promote the growth of technology and innovation in the economy.
