2. Procedural Background

As part of this rulemaking, which considers a number of policy and program issues related to DG resources in California, we stated our intention to adopt cost-benefit models. The scoping memo for Rulemaking (R.) 04-03-017 discusses our intent to use cost-benefit analyses to compare resource options as part of utility resource planning, to determine how to choose among candidate DG technologies and projects for incentives and other funding, to assess project alternatives as part of utility power procurement, and to assist in measuring and evaluating the effectiveness of DG incentive programs. There may be other uses for a rigorous cost-benefit test in the future.

We embarked on development of a cost-benefit methodology collaboratively with the California Energy Commission (CEC) by conducting a workshop on May 5, 2004. The workshop focused on identifying specific types of costs, benefits, and potential methodologies to quantify them. Parties filed comments in response to the workshop. The Commission conducted hearings in this proceeding on cost-benefit methodologies from May 11-13, 2005 before ALJ Kim Malcolm. The matter was submitted on July 12, 2005 with the receipt of reply briefs. A proposed decision was issued in September 2005 and comments on the proposed decision were filed that same month. The proposed decision was subsequently withdrawn from the Commission's agenda.

On March 2, 2006, the Commission opened a new rulemaking on DG and CSI, R.06-03-004. The prior DG rulemaking, R.04-03-017 was closed and its record was transferred to the new docket. The portion of R.06-03-004 regarding cost-benefit methodology issues was assigned to ALJ Dorothy Duda. On March 13, 2008, R.06-03-004 was closed and the record transferred to R.08-03-008, also assigned to ALJ Duda.

On February 3, 2009, ALJ Duda issued a ruling soliciting comments on preliminary revisions to the 2005 proposed decision and taking official notice of several reports and documents issued since the previous submittal date in July 2005. Parties provided comments in response to this ruling on February 25, 2009 and reply comments on March 9, 2009.

Active parties in this proceeding represented regulated energy utilities, namely Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas & Electric Company and Southern California Gas Company (SDG&E/SCG), the Commission's Division of Ratepayer Advocates (DRA), and DG developers, customers and their associations, including the California Clean DG Coalition (CCDC), the California Solar Energy Industries Association (CalSEIA), First Solar, FuelCell Energy Inc. (FCE), the Interstate Renewable Energy Council (IREC), the California Energy Storage Alliance (CESA), Cogeneration Association of California and the Energy Producers and Users Association (CAC/EPUC), PV Now and Americans for Solar Power (ASPv) (now known jointly as the Solar Alliance), and the City of San Diego. We refer to these non-utility parties collectively in some places as "DG Proponents." The California Center for Sustainable Energy (CCSE), which administers DG programs in the SDG&E territory, was also active in the proceeding in 2009.