2. Background

The purpose of this rulemaking is to develop policies and rules to facilitate deployment of distributed generation in California. As part of this process, we are reviewing our regulatory framework to ensure that unnecessary barriers to deployment of distributed generation are removed. In Decision (D.) 00-12-037 we adopted improved interconnection tariff rules for Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric Company (SDG&E), and Southern California Edison Company (SCE).

This decision is the result of our review of the April 17, 2000 System Planning and Operation Workshop Report and comments on that report, prepared testimony, cross examination during 9 days of hearings on Phase 1 issues and 7 days of hearings on Phase 2 issues, and post-hearing briefs on Phase 1 and 2 issues. In this decision we address all outstanding issues from Phases 1 and 2, including valuation of distributed generation benefits, distribution system operation and planning, ownership and control of distributed generation, the need for distribution-only tariffs, net metering, rate design as it relates to distributed generation, and educational and consumer protection efforts.

Commissioner Bilas presided at two days of hearings in Phase 1 and three days of hearings in Phase 2. Upon the departure of Commissioner Bilas from the Commission, Commissioner Lynch assumed direction of this rulemaking.