ALJ/RMD/jt2 Date of Issuance 5/31/2012
Decision 12-05-035 May 24, 2012
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Continue Implementation and Administration of California Renewables Portfolio Standard Program. |
Rulemaking 11-05-005 (Filed May 5, 2011) |
DECISION REVISING FEED-IN TARIFF PROGRAM, IMPLEMENTING AMENDMENTS TO PUBLIC UTILITIES CODE SECTION 399.20 ENACTED BY SENATE BILL 380, SENATE BILL 32, AND SENATE BILL 2 1X
AND
DENYING PETITIONS FOR MODIFICATION OF
DECISION 07-07-027 BY SUSTAINABLE CONSERVATION AND
SOLUTIONS FOR UTILITIES, INC.
Table of Contents
Title Page
DECISION REVISING FEED-IN TARIFF PROGRAM, IMPLEMENTING AMENDMENTS TO PUBLIC UTILITIES CODE SECTION 399.20 ENACTED BY SENATE BILL 380, SENATE BILL 32, AND SENATE BILL 2 1X AND DENYING PETITIONS FOR MODIFICATION OF DECISION 07-07-027 BY SUSTAINABLE CONSERVATION AND SOLUTIONS FOR UTILITIES, INC. 1
1. Summary 2
2. Background 3
2.1. Legislative History - § 399.20 4
2.2. Feed-In Tariff Program - Decision 07-07-027 6
2.3. Rulemaking 11-05-005 9
3. Parameters in Implementing the § 399.20 Feed-In Tariff Program, as Amended 10
3.1. Federal Law - Avoided Cost 10
3.2. State Law - the Commission's Fundamental Responsibility
and § 399.20 13
3.2.1. Rules of Statutory Construction 13
3.2.2. Senate Bill 2 1X and Feed-In Tariff Pricing Considerations 15
3.3. Policy Guidelines 18
4. Price Recommendations by Parties and Staff 19
4.1. Market Price Referent Without Adders 20
4.2. Market Price Referent with Solar Photovoltaic Adder 21
4.3. Market Price Referent with Forest Biomass Adder 21
4.4. Market Price Referent with Environmental and Locational Adders 22
4.5. Technology-Specific Pricing 24
4.6. Net Surplus Compensation Rate 27
4.7. CAISO Gen Hub plus REC Pricing with Adjustment Mechanism 27
4.8. RAM Pricing with Locational Adder and Adjustment Mechanism 29
5. Analysis of Party and Staff Price Recommendations 30
5.1. Market Price Referent without Adders 30
5.2. Market Price Referent with Various Adders 32
5.3. Technology-Specific Pricing 33
5.4. Net Surplus Compensation Rate 35
5.5. CAISO Gen Hub plus REC with Adjustment Mechanism 36
5.6. RAM Pricing with Locational Adder and Adjustment Mechanism 37
6. Adopted FiT Pricing Methodology - Renewable Market Adjusting Tariff or Re-MAT 38
6.1. Compliance with Federal Law 38
6.2. Compliance with State Law 40
6.3. Three Product Types and Re-MAT Starting Price 42
6.4. Re-MAT Price Adjustment Mechanism For Each Product Type 44
6.4.1. Increased Price - Illustrated 46
6.4.2. Decreased Price - Illustrated 48
6.5. Assignment of Capacity to Three Products Incremental Release of Capacity and Three-MW Minimum to Start 49
6.6. Program Forums and Future Modifications to the Adjustment Mechanism 50
6.7. Environmental Compliance Costs 50
6.8. Resource Adequacy 54
6.9. Define "Strategically Located" 56
6.10. Ratepayer Indifference 59
6.11. First-Come-First-Served 61
7. Increase the Size of Eligible Facility to 3 MW 62
8. Prohibition Against "Daisy-Chaining" to Evade Project Size Limitations 66
9. Eliminate Overlap of the Commission's RAM Program and § 399.20 Program 67
10. Project Viability Criteria for § 399.20 Feed-In Tariff Program 69
11. Applicability of the § 399.20 Feed-in Tariff Program to Small
Electric Utilities 71
12. Statewide Capacity Program Cap Increased to 750 MW and Allocation of Proportionate Share to Commission Regulated Utilities 74
12.1. Program Cap of 750 MW 75
12.2. Capacity Allocation Methodology in Decision 07-07-027 Adopted 77
12.3. Allocated Amount - Investor Owned Utilities 78
12.4. Set Aside of Allocated Capacity for Specific Technologies 80
12.5. Future Adjustments in Allocation of 750 MW Cap 82
13. Separate Tariffs for Public Water or Wastewater and other Program Participants Eliminated 82
14. Retail Customer Requirement Eliminated 84
15. Inspection and Maintenance Report - Annual Requirement Adopted 86
16. 10-day Reporting Requirement of Request for Service Under Tariff 88
17. Publicly-Owned Electric Utilities - Separate Program 92
18. Utility Discretion to Deny Tariff Request Under § 399.20 94
19. Contract Termination Provisions 95
20. Expedited Interconnection Procedures 97
21. Refunds of Other Incentives - California Solar Initiative and Small Generator Incentive Program 100
22. FERC Certification of Generator for Qualifying Facility (QF) Status 102
23. Transition Issues 102
24. Motion for Further Consideration of an "Administratively Determined, Avoided Cost Based Pricing Mechanism" - Denied 104
25. Petition for Modification of Decision 07-07-027 by Solutions for Utilities, Inc. - Denied 105
26. Petition for Modification of Decision 07-07-027 by Sustainable Conservation - Denied 107
27. Comments on Proposed Decision 108
28. Assignment of Proceeding 108
Findings of Fact 108
Conclusions of Law 115
ORDER 123
Attachment A - 10-day reporting requirement to tariffs under the § 399.20 FiT Program R.11-05-005
DECISION REVISING FEED-IN TARIFF PROGRAM, IMPLEMENTING AMENDMENTS TO PUBLIC UTILITIES CODE SECTION 399.20 ENACTED BY SENATE BILL 380, SENATE BILL 32, AND SENATE BILL 2 1X
AND DENYING PETITIONS FOR MODIFICATION OF
DECISION 07-07-027 BY SUSTAINABLE CONSERVATION AND
SOLUTIONS FOR UTILITIES, INC.
1. Summary
Today's decision implements the amendments to Pub. Util. Code § 399.201 enacted by Senate Bill (SB) 380 (Kehoe, Stats. 2008, ch. 544, § 1), SB 32 (Negrete McLeod, Stats. 2009, ch. 328, § 3.5), and the more recent amendments enacted by SB 2 of the 2011-2012 First Extraordinary Session (Simitian, Stats. 2011, ch. 1) (SB 2 1X).
Notably, in implementing the statutory amendments to § 399.20, this decision adopts, among other things, a new pricing mechanism for the Commission's § 399.20 Feed-in Tariff (FiT) Program. This new pricing mechanism will be referred to as the "Renewable Market Adjusting Tariff" or "Re-MAT." Re-MAT includes two principle components. First, a starting price based on the weighted average contract price of Pacific Gas and Electric Company, Southern California Electric Company, and San Diego Gas & Electric Company's highest priced executed contract resulting from the Commission's Renewable Auction Mechanism auction held in November 2011. This starting price will apply to three FiT product types: baseload, peaking as-available, and non-peaking as-available.2 Second, we adopt a two-month price adjustment mechanism that may increase or decrease the price for each product type every two months based on the market response. Finally, each accepted project will be paid a time-of-delivery adjustment based on the generator's actual energy delivery profile and the individual utility's time-of-delivery factors.
Today's decision also adopts several new or revised FiT Program components, including, among other things, increasing the maximum size of eligible facilities to 3 megawatts, adjusting capacity allocations among the utilities, adopting project viability criteria, and excluding small electric utilities from the program.
Lastly, this decision denies two petitions for modification of Decision 07-07-027, the decision initially establishing the tariffs and standard contracts for utilities under § 399.20, filed by Sustainable Conservation and by Solutions for Utilities, Inc.
This proceeding remains open.
1 All statutory references are to the Public Utilities Code unless otherwise indicated.
2 The term "as-available" is used interchangeably with the term "intermittent."
