11. Applicability of the § 399.20 Feed-in Tariff Program to Small Electric Utilities

This decision implements SB 380 and SB 32 by removing electric corporations with less than 100,000 service connections from the § 399.20 FiT Program.

SB 380 amended § 399.20 by adding subsection (h) which authorizes the Commission on a discretionary basis to modify or adjust the requirements of § 399.20 for any electrical corporation with less than 100,000 service connections. SB 32 recasts this same provision by combining it with subsection (c) and leaving the language unchanged. SB 2 1X makes no changes to this provision.

In response to various ALJ rulings, parties provided comments on implementation of this provision. The California Association of Small and Multi-Jurisdictional Utilities (CASMU)⁷⁶ requests that the Commission rely on § 399.20(c) to exempt electric corporations with less than 100,000 service connections from the requirements of § 399.20. CASMU indicates that its members operate with between approximately 700 and 46,000 service connections within the state. Some of these utilities provide additional service connections in other states. CASMU further indicates that the combined obligation of all CASMU members under the existing § 399.20 FiT Program, as implemented by D.07-07-027, is small, only 0.599% or 1.497 MW and that under SB 32 with the increased program size, this total would only increase to approximately 3 MW, which CASMU argues is still very low. The § 399.20 FiT Program offered by CASMU members remains limited in other respects as these utilities currently only offer feed-in tariffs for water and wastewater facilities and not the expanded customer base authorized by D.07-07-027. FuelCell Energy supports an exemption because the costs associated with administering this program outweigh the proportionate share of participation.

Other parties, such as SunEdison, CALSEIA, and Sustainable Conservation, suggest that participation by small electric corporations remain voluntary because, although small, it continues to be an important component of reaching the state's 33% renewable goal. The largest electric corporations did not present a unanimous position on this topic. PG&E and SDG&E did not comment. SCE claims that the smaller electric corporations are legally required to participate because the exemption in subsection (c) just applies to parts of the program, not the entire program.

We find that the plain language of § 399.20(c) provides the Commission with authority to modify the program as applied to small electrical corporation in a manner that includes fully removing these utilities from the program. The language permits the Commission to "modify or adjust" the requirements of § 399.20 as applied to small electrical corporations. We find that modifying the program by removing these utilities is justified because the costs of administering this program for the smaller utilities outweigh any potential benefit from their contribution, of approximately 3 MW, to the overall program.

We disagree with parties, such as SCE, to the extent they claim that modification does not mean exempting these utilities from the program. Subsection (c) provides the Commission with latitude in interpreting this provision and, with these smaller utilities only contributing approximately 3 MW, we find it reasonable to relieve them from the administrative burdens associated with the program. Currently, no customers are served under these tariffs. These smaller utilities are not prohibited from seeking authority to provide a voluntary program, separate from the FiT Program, consistent with all applicable laws and regulations.

Accordingly, within 90 days of the effective date of this decision and pursuant to § 399.20(c), electrical corporations with less than 100,000 service connections within this state shall file Tier 1 Advice Letters withdrawing their tariffs relevant to the § 399.20 FiT Program.

⁷⁶ CASMU includes Bear Valley Electric Service (U913E), a division of Golden State Water Company, California Pacific Electric Company, LLC (U933E) dba Liberty Energy, California Pacific Electric Company, and PacifiCorp (U901E) dba Pacific Power. CASMU group no longer includes Mountain Utilities (U906E) as D.11-06-032 approved a sale and transfer of control of assets and relieved Mountain Utilities of its obligation to provide public utility electricity service.