14. Retail Customer Requirement Eliminated

This decision implements SB 32 by eliminating the requirement that participating generators be retail customers to participate in the § 399.20 FiT Program.

As originally enacted by AB 1969, § 399.20(b) required electric generation facilities to be, among other things, owned and operated by public water or wastewater agencies and a "retail customer" of an electrical corporation. SB 32 replaced the phrase "retail customer" with "located within the service territory of, and developed to sell electricity to ..."⁸² SB 32 also changed § 399.20 by eliminating the requirement that the facilities be owned and operated by public water or wastewater agencies. We address this change elsewhere in this decision. Now we focus on the replacement of the phrase "retail customer." SB 2 1X retains the modifications made by SB 32.

As a result of the SB 32 amendments, we now find that, according to the clear language of § 399.20, the program is not limited to retail customers of the electrical corporation and, instead, available to those that are owners or operators of the electric generation facility. The majority of parties support implementation of SB 32 under this interpretation. Silverado Power points out that eliminating the retail customer requirements will expand the options under the § 399.20 FiT Program to include, for example, locations in so-called brown fields with no existing load or customer. Similarly, FuelCell Energy points out that, in the absence of the retail customer requirement, an otherwise eligible biogas generator could be sited at an abandoned landfill or dairy digester that is not an existing retail customer of the purchasing utility. DRA also points to expanded opportunities for the program. We agree that expanded possibilities exist and do not attempt to identify them all here.

Some parties request additional clarifications of the statute based on the elimination of the "retail customer" requirement. SunEdison and Joint Solar Parties request further clarification on whether third-parties can participate in the § 399.20 FiT Program. We clarify that generating systems owned and operated by third-parties (and not the retail customer of record) are eligible to participate in the § 399.20 FiT Program.

We disagree, however, with SunEdison's and Joint Solar's interpretation of statutory language to mean that SB 32 prohibits the sale of excess generation. SunEdison and Joint Solar Parties claim that the phrase in § 399.20(b) "developed to sell electricity to, an electrical corporation" together with the recent elimination of the "retail customer" requirement, means that the Legislature only intended "full" sales (not excess sales) under the § 399.20 FiT Program. However, that statute is silent on these types of sales. If the Legislature intended to limit excess sales it could have done so. Therefore, because the plain statutory language does not prohibit excess sales, we reject the interpretation proposed by SunEdison and Joint Solar.

As a result, PG&E, SCE, and SDG&E are required to offer generators two options: either full sales or excess sales. The nameplate capacity, however, of all generators participating in this program is limited to 3 MW, regardless of the sales option.

Accordingly, PG&E, SCE, and SDG&E shall remove, as necessary, references to retail customers in the FiT Program standard form contract and/or tariff that is being developed in this proceeding in accordance with the schedule set forth in the January 10, 2012 ALJ ruling. The Commission will review this provision submitted by the utilities and, in a separate decision accept, reject, or modify the provision. Related FiT tariff modifications will also be addressed in this separate decision.

⁸² § 399.20(f).