13. Assignment of Proceeding
President Michael R. Peevey is the assigned Commissioner and Dorothy J. Duda is the assigned ALJ for this portion of the proceeding.
1. Section 2852 of the Public Utilities Code requires that not less than 10% of overall CSI funds be used for installation of solar energy systems on low-income residential housing.
2. In D.06-12-033, the Commission adopted a CSI budget of $2.1668 billion, and dedicated $216.68 million to a low-income solar incentive program.
3. The multifamily affordable housing sector has similarities to the commercial and nonprofit sectors served by the general market CSI program.
4. Marketing, outreach, and administrative work under the MASH program will differ from those efforts in the LISF program, because the MASH program is targeted at property owners and managers of multifamily affordable housing rather than single family low-income homeowners.
5. Section 2851(a)(3) requires reasonable and cost-effective energy efficiency improvements as a condition of receiving solar incentives, with appropriate exemptions for low-income residential housing.
6. In D.05-05-026, the Commission clarified that existing master meter buildings, constructed prior to July 1, 1982, may convert to submetering tariffs.
7. There are economic and technical challenges to installing one solar energy system in a multifamily affordable housing complex where each tenant's unit has a separate meter.
8. Section 2827(b)(2) defines eligible customer-generators for purposes of net energy metering.
9. Under a VNM tariff, the utility would meter solar system production separately from tenant and common area electricity consumption.
10. VNM can overcome the challenge of allocating benefits from a single solar energy system to tenants in multifamily housing whose units are individually metered.
11. VNM allows bill credits for the output of a single solar installation to be shared with tenants in multifamily housing, without physical master metering or site-specific infrastructure upgrades.
12. The Commission has established tariffs and standard contracts through which solar facilities can use a PPA to sell power pursuant to § 399.20, but such facilities are not eligible for CSI or distributed generation incentives.
13. The CEC's NSHP affordable housing solar incentive rate is $3.30 per watt.
1. The Commission should adopt the $108.34 million MASH program, as set forth in Appendix A of this order, to comply with the mandates of § 2852.
2. It is reasonable to adopt MASH program incentive levels of $3.30 per watt for systems that offset common area usage and $4.00 per watt for systems that offset tenant usage, based on Energy Division's analysis of the economics of federal LIHTC financing and the CEC's NSHP incentive rates.
3. The MASH program should involve either up front incentives at the rates set in this decision (Track 1), or the opportunity to compete for higher incentives through a grant program (Track 2).
4. Applicants to the MASH program should have an occupancy permit for at least two years prior to applying for MASH incentives to avoid improper gaming of the MASH and NSHP programs.
5. Applications under Track 2 of the MASH program should be reviewed through a competitive application process, with applications reviewed by the Program Administrators every six months, to encourage innovative models for solar energy systems on affordable housing properties.
6. The MASH Program Administrators should coordinate to develop a standardized statewide Track 2 application and review process, with standardized reviewing criteria which includes but is not limited to incentive level sought, amount of direct tenant benefit to be shared (i.e., tenant bill credits, tenant bill reduction, or energy efficiency investments to benefit tenants), the method and timing to provide direct tenant benefits, outreach and training, and reasonableness of the proposed use of program funds
7. It is reasonable to reserve $20 million of program funds for Track 2 incentives until further information on program participation is available.
8. The Program Administrators should limit awards for Track 1A or 1B incentives to not more than 80% of the Track 1 budget.
9. An administrative budget of 12% of program funds is reasonable, with 2% dedicated to program evaluation (which includes inspection and verification of installation), and the remaining 10% allocated between administration, marketing and outreach at the Program Administrators' discretion.
10. The MASH program should operate through December 31, 2015, and any unspent money on January 1, 2016, shall be used for cost-effective energy efficiency measures in low-income residential housing, as set forth in § 2852.
11. The MASH program should be funded by PG&E, SCE, and SDG&E based on the percentages set forth in Table 3 of this order.
12. Although the MASH and LISF programs each have a budget of $108.34 million, we should monitor participation in both programs, and consider adjusting the allocation of the $216.68 million in total low-income solar program funds if warranted based on participation.
13. The Program Administrators of the general market CSI program should administer the MASH program because of target market similarities.
14. MASH program implementation will be expedited if the existing CSI Program Administrators can incorporate multifamily affordable housing incentives into their existing administrative structure.
15. The MASH Program Administrators should conduct marketing, outreach, education, and green job creation in cooperation or under contract with entities experienced in multifamily affordable housing.
16. We should not adopt more stringent energy efficiency requirements for the affordable housing sector than we require for low-income homeowners in our LISF program, or for the general market CSI program.
17. Applicants for MASH incentives should meet the same energy efficiency requirements that are required for the general market CSI program.
18. Owners and managers of multifamily affordable housing who receive MASH incentives should provide LIEE information to their tenants and allow eligible and willing tenants to participate in LIEE to the extent feasible.
19. The utilities should file VNM tariff proposals which allow the building owner to determine the percentage of solar energy credits allocated between common and tenant areas, and allocate solar energy credits to tenant areas based on the relative size of a tenant's unit. The VNM tariff should specify that the portion of the system offsetting common area load would receive Track 1A incentives, and the portion offsetting tenant load would receive Track 1B incentives.
20. The building owner/manager should be responsible for, and bear all costs associated with, installing a generator output meter capable of recording solar energy system output in 15-minute increments, if required, to insure appropriate customer credits.
21. VNM does not conflict with § 2827(b)(2) because eligible customer-generators will use a solar generating facility to offset their electricity usage.
22. It is reasonable to allow the utilities to recover their reasonable costs for implementation of VNM from the administrative budget for the general market CSI program.
23. Multifamily affordable housing property owners may install solar facilities through power purchase agreements with third parties, as long as those agreements comply with all existing statutes governing the production and sale of electricity.
24. The Commission should consider expanding VNM to all multitenant properties, not just affordable housing.
25. The Program Administrators should apply the same program requirements to MASH applicants as apply to general market CSI applicants, unless otherwise specified in this order.
26. It is reasonable to adopt the milestones and program evaluation plan as set forth in Appendix A of this order.
27. MASH program evaluation should include close monitoring of average system costs and incentives paid under Track 2.
28. Energy Division should ensure that the Program Administrators each submit to an annual audit of program expenditures.
IT IS ORDERED that:
1. The Multifamily Affordable Solar Housing (MASH) program set forth in Appendix A is adopted as part of the California Solar Initiative (CSI).
2. Within 30 days of this order, San Diego Gas and Electric Company (SDG&E) shall revise its contract with the California Center for Sustainable Energy (CCSE) to specify that CCSE will act as Program Administrator for the MASH program.
3. Within 60 days of this order, Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and CCSE (collectively, the Program Administrators) shall jointly file an advice letter with proposed amendments to the CSI Handbook to incorporate the MASH program and to implement Track 1 incentives.
4. Within 90 days of this order, the Program Administrators shall jointly file an advice letter with a standardized statewide Track 2 application and review process as well as the handbook changes necessary to implement Track 2.
5. Within 120 days of this order, PG&E, SCE, and SDG&E shall each file an advice letter with a proposed Virtual Net Metering (VNM) tariff, applicable to multifamily affordable housing properties that install a solar energy system through the MASH program, and each utility's proposed tariff shall comply with the requirements set forth in Appendix B of this order.
6. The Administrative Law Judge (ALJ) assigned to this proceeding shall issue a ruling to explore expansion of the VNM tariff to all multitenant properties that install solar energy systems.
7. As part of the semi-annual administrative expense reports under the general market CSI program, each Program Administrator shall submit to Energy Division a semi-annual administrative expense report detailing MASH administrative expenditures, including VNM implementation expenses, as set forth in Appendix A. SDG&E shall submit to Energy Division a semi-annual administrative expense report on VNM implementation expenses. Energy Division shall monitor these expense reports and may request the Assigned Commissioner or ALJ to initiate further proceedings to examine, and potentially disallow, any disputed expenditures.
8. As part of CSI marketing plan filings currently submitted to Energy Division, each Program Administrator shall include MASH marketing and outreach budgets and plans as set forth in Appendix A.
9. Each Program Administrator shall submit a semi-annual progress report on the MASH Program to the Director of Energy Division, as set forth in Appendix A.
10. Two years after the start of the MASH program, and every two years thereafter while the program is operating, the staff of the Commission's Energy Division will draft a Request for Proposals (RFP) for an independent program evaluator and direct either PG&E, SCE, or SDG&E to issue the RFP. Energy Division shall review the bids, select a MASH program evaluator, and select one utility to contract with the winning bidder.
11. The utility selected by Energy Division to contract with the program evaluator shall enter into a co-funding agreement with the other two utilities specifying how each utility will fund its share of the cost of the program evaluation from its MASH program funds.
12. Energy Division shall arrange an annual audit of program expenditures by each Program Administrator, at the Program Administrator's expense.
13. PG&E, SCE, and CCSE shall coordinate with the Low Income Single Family program manager, as directed by Energy Division.
14. The ALJ in this or any successor proceeding may issue a ruling to reduce MASH program incentives by up to 10% per year or to allocate an additional $10 million to Track 2 incentives, following written justification from Energy Division issued by ruling with an opportunity for comment by all parties.
15. Energy Division may recommend to the assigned Commissioner or ALJ in this, or any successor proceeding, adjustments to any element of the MASH program set forth in this order. At the discretion of the assigned Commissioner or ALJ, and if any recommendations require modification of a Commission order, the changes will be considered by the full Commission, after notice and an opportunity for comment by parties.
16. Rulemaking 08-03-008 remains open.
This order is effective today.
Dated October 16, 2008, at San Francisco, California.
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
TIMOTHY ALAN SIMON
Commissioners
