2. Background
In Decision (D.) 01-03-073, the Commission established the Self-Generation Incentive Program (SGIP) to encourage the development and commercialization of new distributed generation (DG) technologies. For purposes of this decision, DG refers to generation technologies installed on the customer's side of the utility meter that provide electricity for all or a portion of that customer's onsite electric load. The program is available to customers of Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas). PG&E, SoCalGas and SCE administer their own programs, and the California Center for Sustainable Energy (CCSE) administers the program in SDG&E's service territory.
The SGIP provides funding to qualifying technologies.7 Incentives offered under the SGIP vary based on the technology and whether the DG facility uses renewable fuel. From 2007 through 2010, SGIP provided incentives as follows:
· For renewables: $1.50 per watt incentive for wind turbines and $4.50 per watt incentive for renewable fuel cells;
· For non-renewables: $2.50 per watt incentives for non-renewable fuel cells; and
· For advanced energy storage (AES) coupled with eligible self-generation technology: $2.00 per watt.
The program administrators (PAs) administer the SGIP and implement the program rules contained in the SGIP Program Handbook (Handbook).
Senate Bill (SB) 412 (Stats. 2009, ch. 182) authorizes the Commission, in consultation with the California Air Resources Board (CARB), to determine what technologies should be eligible for the SGIP based on greenhouse gas (GHG) emissions reductions. SB 412 also extends the sunset date of the SGIP from January 1, 2012 to January 1, 2016. An Administrative Law Judge (ALJ) Ruling issued on November 13, 2009, posed several questions regarding implementation of SB 412, and requested comments from parties. The ALJ Ruling also scheduled a workshop for January 7, 2010 to address the questions posed in the ruling.
Following the January 7 workshop, Energy Division Staff analyzed potential participating SGIP technologies. Based on the Energy Division's analysis, and after consultation with California Energy Commission (CEC) Staff, Energy Division developed a Staff proposal with recommendations on how to modify the SGIP to comply with SB 412 (SGIP Staff Proposal, Part I).8 In the months following the issuance of the Staff proposal, Staff worked with the CARB to ensure that CARB concurs with Staff analysis.
A second ALJ ruling issued on September 10, 2010, requested comments from interested stakeholders on the workshop report and the SGIP Staff Proposal, Part I. To help parties understand the Staff proposal, Energy Division Staff conducted another workshop on November 14, 2010. Subsequently, parties filed comments and reply comments on the proposed modifications to the SGIP.
The SGIP Staff Proposal noted that the cost-effectiveness recommendations in the proposal were preliminary, and Energy Division Staff planned to update them after the results of the cost-effectiveness evaluation of SGIP became available later in the year. The cost-effectiveness study was finalized on February 9, 2011 (The Cost-Effectiveness Report). Accordingly, Staff updated the recommendations in the SGIP Staff Proposal, Part I and issued a revised SGIP Staff Proposal (Staff Proposal, Part II), which was attached to the ALJ Ruling, dated April 21, 2011. The April 21, 2011 ALJ Ruling requested comments on the revised SGIP Staff Proposal, Part II. Comments and reply comments were received on May 2, 2011 and May 9, 2011. Comments and reply comments on the Cost-Effectiveness Report were also received on May 11, 2011 and May 17, 2011. All comments were reviewed and incorporated into this decision, but due to the large volume of recommendations and in the interest of brevity, we make broad references to the comments as is relevant to our determination of the issues, but do not discuss the comments individually.
7 At its inception, the SGIP funded solar PV, wind turbines, fuel cells, microturbines, small gas turbines, internal-combustion (IC) engines and combined heat and power (CHP) plants. Pursuant to Pub. Util. Code § 379.6, the SGIP is currently limited to wind and fuel cell technologies.
8 SGIP Staff Proposal, Part I was attached to the ALJ ruling, dated September 10, 2010.
