STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor
PUBLIC UTILITIES COMMISSION
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3298
June 19, 2006 Agenda ID #5754
Ratesetting
TO: PARTIES OF RECORD IN RULEMAKING 06-03-004
This is the draft decision of Administrative Law Judge (ALJ) Dorothy Duda. It will not appear on the Commission's agenda for at least 30 days after the date it is mailed. The Commission may act then, or it may postpone action until later.
When the Commission acts on the draft decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.
Parties to the proceeding may file comments on the draft decision as provided in Article 19 of the Commission's "Rules of Practice and Procedure," accessible on the Commission's website at http://www.cpuc.ca.gov. Pursuant to Rule 77.3 opening comments shall not exceed 15 pages.
Comments must be filed with the Commission's Docket Office. Comments should be served on parties to this proceeding in accordance with Rules 2.3 and 2.3.1. Electronic copies of comments should be sent to ALJ Duda at dot@cpuc.ca.gov. All parties must serve hard copies on the ALJ and the Assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail or other expeditious methods of service. The current service list for this proceeding is available on the Commission's website, www.cpuc.ca.gov.
/s/ ANGELA K. MINKIN
Angela K. Minkin, Chief
Administrative Law Judge
ANG:sid
Attachment
ALJ/DOT/sid DRAFT Agenda ID #5754
Ratesetting
Decision DRAFT DECISION OF ALJ DUDA (Mailed 6/19/2006)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking Regarding Policies, Procedures and Rules for the California Solar Initiative, the Self-Generation Incentive Program and Other Distributed Generation Issues. |
Rulemaking 06-03-004 (Filed March 2, 2006) |
OPINION MODIFYING DECISION 06-01-024 TO
INCREASE SYSTEM SIZE ELIGIBILILTY
This decision modifies Decision (D.) 06-01-024 regarding the maximum size of solar projects eligible to receive incentives through the Commission's Self Generation Incentive Program (SGIP) and the California Solar Initiative (CSI). The Commission makes this modification in advance of other Phase I issues in this rulemaking because it has learned the size limit adopted in D.06-01-024 is negatively impacting the solar photovoltaic (PV) market by unnecessarily constraining how SGIP project applicants size their systems.
Background
For several years, the Commission's SGIP has provided incentive payments to customers who install distributed generation (DG) systems, including solar facilities.1 Originally, the Commission provided incentive payments to solar facilities, as long as the systems were sized no larger than 200% of peak demand.
In D.06-01-024, the Commission reduced the size of solar facilities eligible to receive incentives through the SGIP and CSI. The Commission had witnessed an over-subscription for solar incentives in some utility service areas relative to available funds and was concerned with preserving program funding for more participants. In addition, the Commission wanted to avoid paying incentives to over-sized systems. Thus, it reasoned it was not prudent to pay incentives for capacity exceeding the on-site peak load. Capacity above peak load requirements might result in surplus power that would go unused and would not be eligible to receive net energy metering credits. Therefore, in D.06-01-024, the Commission reduced eligible system size for solar facilities to 100% of historic peak load, beginning with SGIP applications submitted after the date of the order, January 12, 2006. (D.06-01-024, p. 15.)
Following the change in system size eligibility requirements, Energy Division staff learned in February and March 2006 that the new limit of 100% of peak load had the unintended consequence of penalizing some 2006 SGIP solar project applicants by reducing net energy metering credits on an annual basis. Utility net metering programs allow renewable DG systems producing excess electricity at any point during the day to deliver this electricity to the local utility. In essence, the customer's utility meter spins backward gaining a credit for the customer at the retail power rate. This credit is applied to the customer's energy bill creating an additional incentive for customers to invest in renewable DG.
1 The Commission pays incentives to eligible DG systems through the SGIP in 2006. Eligible DG systems include solar photovoltaic, wind turbines, fuel cells, and renewable and non-renewable micro-turbines, internal combustion engines, and gas turbines. Starting in 2007, the Commission will pay incentives to solar projects through the CSI, while payments to DG projects other than solar will continue through the SGIP.
