4. Comments on Proposed Decision

The proposed decision of the ALJ in this matter was mailed to the parties in accordance with Section 311 of the Public Utilities Code and Rule 14.3 of the Commission's Rules of Practice and Procedure. Comments were filed on November 12, 2008, by VRB, Chevron Energy and the SGIP PAs, and reply comments were filed on November 17, 2008 by VRB.

The comments generally support the proposed decision. Some modifications as suggested by the comments have been incorporated into the decision.

Specifically, we have clarified the discussion in Section 3.2.1 to provide that if technologies other than wind or fuel cells are added to the SGIP, then an AES system coupled with those eligible technologies will be eligible to receive the incentives discussed in this decision. We also clarify that any SGIP project that is currently an eligible technology will be eligible to receive AES incentives if coupled with an eligible AES system.

We also modify Section 3.2.3 to remove the 3 MW incentive cap and the 5 MW size limit imposed by the proposed decision. We also make minor changes to improve the discussion and correct typographical errors.

Several comments merit further discussion. Specifically, Chevron Energy states that "it is pleased that the Commission has recognized the importance of AES technology as a new SGIP technology"14 and requests a review by both the Commission staff and the SGIP PAs after 12 months of program operation to help determine whether the incentive level for AES is sufficient to achieve the desired goals. We are concerned from this comment that there may be confusion about AES system eligibility under SGIP, and therefore clarify that we are not adding an AES system as a new technology under SGIP. As noted above, AES systems cannot be added to the SGIP as a stand-alone technology. Rather, we are allowing eligible SGIP technologies, currently wind and fuel cell systems, that are coupled with AES systems to receive incentives for AES. We also decline Chevron's suggestion for a 12-month review of the AES incentives. We prefer such reviews to take place as part of the Commission's ongoing SGIP program evaluation process.

The SGIP PAs request that we remove the advice letter requirement for implementing the SGIP program revisions. Instead, the PAs suggest convening a workshop in December to give them an opportunity to vet the changes required by the decision among themselves and with the industry and to implement the SGIP program changes with the release of 2009 SGIP Program Handbook, scheduled to be published approximately on February 1, 2009.

We do not require a workshop for implementation of the revisions to the SGIP ordered in this decision. However, because of the technical nature of the revisions, we allow more time for the PAs to prepare their implementation advice letters. The SGIP PAs shall submit the advice letters within 60 days of the effective date of this decision. We also allow the PAs to incorporate the changes to the SGIP program in the 2009 SGIP Handbook, which is currently scheduled for February 1, 2009, if the advice letter is approved by the Energy Division.

¹⁴ See Chevron Energy's comments to the proposed decision.