COM/LYN/tcg * DRAFT Agenda ID #1638
Quasi-legislative
2/27/2003 H-10
Decision PROPOSED DECISION OF COMMISSIONER LYNCH
(Mailed 1/10/2003)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking into Distributed Generation. |
Rulemaking 99-10-025 (Filed October 21, 1999) |
O P I N I O N
(See Appendix A for List of Appearances.)
TABLE OF CONTENTS
Title Page
O P I N I O N 2
1. Summary 2
2. Background 3
3. Outstanding Procedural Matters 3
4. Potential Benefits of Distributed Generation 4
4.1. Discussion 8
5. Distribution System Operations and Planning 11
5.1. System Operations 12
5.2. System Planning 13
5.2.1 Physical vs. Contractual Assurance 13
5.2.2 Incorporating Distributed Generation into System Planning 15
6. Ownership of Distributed Generation 20
6.1 Positions of Parties 21
6.2 Criteria for Evaluating Options 24
7. Need for a Distribution-Only Tariff 29
7.1 Does a Retail Sale within a Distribution Circuit Utilize the Transmission System? 30
7.2 Should We Establish a Distribution-Only Tariff for Distributed Generators that Sell within a Single Distribution Circuit? 33
7.3 Jurisdiction over Distributed Generation Interconnections
when Sales of Excess Energy Occur 37
8. Rate Design 41
8.1 PBR Incentives/Pricing Flexibility 41
8.2 Public Purpose Program Funding 45
8.3 Localized/Deaveraged Rates 48
TABLE OF CONTENTS
(Continued)
Title Page
8.4 Implementation Costs 52
9. Net Energy Metering 54
9.1 Discussion 57
9.2 Eligibility of Integrated Renewable and Nonrenewable
Technology Configurations for Net Metering 59
10. Consumer Education 62
10.1 Discussion 66
10.2 Consumer Protection 69
11. Applicability of the California Environmental Quality Act to
this Decision 71
12. Governmental Efforts Regarding Distributed Generation 72
12.1 Local Government Outreach Regarding Interconnection
Standards 72
12.2 Identification of Permit Streamlining Opportunities 73
12.3 Air Quality Standards Established for Distributed Generation 75
12.4 Evaluation of Efficiency, Emissions, and Reliability
of DER 76
13. Comments on Proposed Decision 76
14. Assignment of Proceeding 77
Findings of Fact 77
Conclusions of Law 79
O R D E R 81
Appendix A - List of Appearances
1. Summary
This decision completes our rulemaking and establishes policies for ownership and operation of distributed generation and their integration into utility planning and operation of the distribution grid. We find that there is no need to place restrictions on ownership of distributed generation units. The technology of electricity distribution, however, necessitates that a distributed generation owner will only be eligible for compensation for deferring distribution system upgrades in limited circumstances, described herein, and only if the distributed generator offers physical assurance. Similarly, since almost every retail sale will utilize both the distribution and transmission networks (even those that appear to stay within a single circuit), we do not adopt a distribution-only tariff.
The nature of this new technology and its likely uses obviates the need to make any changes to rate design to accommodate distributed generation at this time. Nevertheless, we do allow the utilities to establish memorandum accounts to track distributed generation implementation costs that cannot be attributed to specific distributed generation projects and are not part of the utilities' existing budgets.
We do not adopt a mass marketing information campaign about distributed generation, but rather a multi-pronged education effort directed to those considering a distributed generation installation.
To allow us to consider ongoing issues, we state our intent to open a new rulemaking - related to distributed generation.
