II. Summary of Decision

The utility tariffs that are the subject of this portion of our inquiry are those referred to as Rule 21. PG&E's Rule 21 provides that its purpose is to govern "the Interconnection, operating and Metering requirements for Generating Facilities to be connected to PG&E's Distribution System over which the California Public Utilities Commission (Commission) has jurisdiction. Subject to the requirements of this Rule, PG&E will allow the Interconnection of Generating Facilities with its Distribution System." Rule 21 for SDG&E and SCE state similar objectives.

We herein adopt the CEC's recommendations on several technical matters relating to interconnection rules, especially in light of the extensive public process the CEC conducted in the development of the report, as described in the report. We do not adopt any cost allocations or revenue requirement changes here, although we direct the utilities to address certain cost and allocation issues in appropriate ratemaking proceedings.² We also incorporate the CEC's recommendations regarding the resolution of disputes between utilities and DG interconnection applicants regarding interconnection matters.

We adopt the following changes to the utilities' interconnection rules and our policies:

· We retain existing rules and tariffs which address the circumstances under which DGs receiving publicly-funded incentives or tariff exemptions must install Net Generation Output Metering (NGOM) equipment, clarifying that this equipment is unwarranted when less intrusive methods or cost-effective means of providing data are available, consistent with Section F.3 of Rule 21;

· We clarify that billing-grade or utility-owned meters are not necessary where the meter conforms to technical specifications outlined in utility tariffs, Rule 22;

· The utilities and DG interconnection applicants are required to submit to mediation of disputes regarding interconnections.

· The utilities must provide detailed justification to parties disputing the imposition of technical or operational requirements;

· The CEC or a designated utility will maintain a public data base describing utility interconnection disputes and their resolution in cases where the customer provides the information or agrees that the utility may provide it. We also direct the Rule 21 Working Group to develop the procedure for providing the information and the types of information that should be included at the website;

· The utilities shall track interconnection costs by tariff (over /under 10 kW and technology of Net Energy Metered (NEM), non-NEM), review level, inspection and distribution system modification cost categories to inform future decisions allocating costs associated with interconnection processing;

· Subject to certain conditions, a utility may not restrict export from a NEM DG while a non-NEM DG on the same meter/account is supplying the customer's load from a facility that applies more than one technology using more than one tariff;

· Interconnection application review fees and the costs associated with distribution system modifications for non-NEM projects will continue to be the responsibility of the DG owner;

· The Rule 21 Working Group will develop network interconnection rules that can be incorporated into Rule 21 and report on the progress of this effort to the Integrated Energy Policy Report (IEPR) Committee by March 2006, and will file the report in this docket.

As the CEC recommends, we do not adopt any changes to the interconnection application review fee structure at this time. We do, however, state our intent to change the fees so that they recover some portion of costs following review in each utility's next general rate case.