ALJ/MEG/avs Mailed 8/22/2003

Decision 03-08-013 August 21, 2003

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the Commission's Proposed Policies and Programs Governing Energy Efficiency, Low-Income Assistance, Renewable Energy and Research Development and Demonstration.

Rulemaking 98-07-037 (Filed July 23, 1998)

INTERIM OPINION ADOPTING PROCESS FOR ADDING

TECHNOLOGIES AND MAKING OTHER CHANGES TO
SELF-GENERATION INCENTIVE PROGRAM

1. Introduction and Summary

By Decision (D.) 01-03-073, dated March 27, 2001, we adopted program incentives for demand-responsiveness and self-generation, pursuant to Public Utilities Code Section 399.15(b).¹ "Self generation" refers to distributed generation technologies (micro-turbines, small gas turbines, wind turbines, photovoltaics, fuel cells and internal combustion engines) installed on the customer's side of the utility meter that provide electricity for either a portion or all of that customer's electric load. Under the program adopted in D.01-03-073 financial incentives are provided to three different categories (or levels) of distribution technologies.

Since initiating the self-generation program, we have received several petitions for modification that request an evaluation of additional technologies to include in the program and related program changes. By D.03-01-006, we determined that it would be more effective to establish a process by which the Commission could give careful consideration to proposed new technologies that does not rely on procedures related to petitions for modification. The Commission's Energy Division, in consultation with other Self Generation Working Group (Working Group) members, was directed to develop the details of such a process for our consideration.²

By today's decision, we adopt Energy Division's proposal with minor modifications. The evaluation process for our consideration of additional eligible technologies under the self-generation program will proceed as follows:

1. When an applicant contacts the program to add a technology to the program, the program administrator contacted will provide the applicant with the set of guidelines set forth in Attachment 2. The guidelines should be incorporated into future revisions of the program handbook. The program administrator will notify the applicant in writing concerning any deficiencies in the proposal, based on the guidelines. The applicant will modify its proposal, as necessary, to supply the Working Group with the additional information requested under the guidelines. The guidelines will also be posted on the Commission and program administrator websites.

2. The program administrator will distribute copies of the applicant's proposal to the Working Group members. If the technology is introduced to all four program administrators simultaneously by an applicant, manufacturer, or distributor, the Working Group may designate one program administrator to sponsor the applicant's proposal.

3. At the applicant's request, the applicant may introduce the proposal to add a new technology to the members of the Working Group. Otherwise, the sponsoring program administrator will introduce the proposal for discussion at the Working Group's next regularly scheduled meeting following the applicant's submittal of all information required by the guidelines, so long as the information arrives at least 10 business days before the next Working Group meeting. The Working Group may seek additional information from the applicant or other resources, as needed.

4. The Working Group will develop recommendations on whether the new technology should be eligible to participate in the program, and at what incentive level. In presenting its recommendations, the Working Group should clearly discuss what alternatives and issues were considered, and the rationale for reaching the consensus recommendation including responses to the applicants' arguments if the Working Group does not adopt the proposal in whole or in part. If the Working Group does not reach unanimous agreement, the Group should prepare a report listing the majority and minority recommendations and describing the pros and cons of each. The Energy Division will specifically indicate whether it supports the majority or minority opinion, and why.

5. Prior to submitting Working Group recommendations to the Assigned Commissioner, the Working Group shall provide the applicant with a copy of the proposed recommendations. The applicant will have 5 (five) days to respond in writing to the recommendations before they are finalized by the Working Group and forwarded to the Assigned Commissioner. The submittal to the Assigned Commissioner should include a copy of the applicant's comments and discuss the Working Group's response to those comments.

6. The Energy Division will submit the Working Group recommendations to the Assigned Commissioner within 90 days after the new technology is presented at a Working Group meeting. This allows the Working Group two full meetings to evaluate the proposal, collect additional information, develop recommendations and consider the applicant's comments on those recommendations before finalizing its submittal to the Assigned Commissioner.

7. As proposed by the Commission in D.03-01-006, the Energy Division/Working Group recommendations will be issued for comment via an Assigned Commissioner's Ruling (ACR). Comments will be due within 15 days of the ACR. Reply comments will be due within five working days after initial comments are filed. Energy Division's recommendations and parties' comments will be addressed subsequently by Commission decision.

As discussed in this decision, the evaluation process outlined above will also apply to other proposed program modifications, such as changes to incentive levels or proposals to include ancillary technologies (e.g., absorption chillers and other waste heat devices). The Working Group itself may also propose changes to the program by developing recommendations and submitting them to the Commission for distribution and comment.