Comments on Draft Decision

The draft decision of the ALJ in this matter was mailed to the parties in accordance with Pub. Util. Code § 311(g)(1) and Rule 77.7 of the Rules of Practice and Procedure. Comments were filed August 15, 2005 and reply comments were filed August 22, 2005. The final decision incorporates minor changes recommended in the comments intended to clarify the order's intent.

Findings of Fact

1. NGOM may be required for non-NEM generators for billing, assessing rates or special charges, or planning.

2. Some DG facilities do not require NGOM at this time in order for the utilities or DG to fulfill regulatory requirements or conduct operational activities.

3. NGOM may be required by the California ISO for certain large generating facilities in order to promote system reliability. Lack of metering on large DG may complicate the utilities' scheduling of power to the ISO.

4. DG interconnection applicants would benefit from the provision of information about the resolution of interconnection disputes. The provision of such information to a webmaster would not be unduly burdensome on utilities.

5. Public disclosure of some information regarding the resolution of disputes between a utility and a DG interconnection applicant might compromise the DG's privacy.

6. The parties concur that the existing process for resolving interconnection disputes between DG interconnection applicants and utilities has not been efficient.

7. Existing fees for interconnection processing do not appear to recover the costs of activities related to initial and supplemental application review; however, the record in this proceeding does not permit a final assessment of those costs.

8. Because the utilities currently do not charge for unnecessary inspection visits, there is little incentive by the DG to minimize those inspection visits.

9. Some DG facilities incorporate both NEM and non-NEM generators. The tariffs for calculating NEM credits for combined technology DG facilities are unclear.

10. For combined technology DG facilities, utility tariffs need to specify how the utility will treat exported NEM energy in order to assure the bill credits they are entitled to and that ratepayers do not provide unintended subsidies to non-NEM generators.

11. The record in this proceeding does not permit an allocation of costs or payments for DG facilities that include two or more NEM generators operating under different tariffs.

12. At this time, there is no evidence to suggest that non-NEM DG require utility ratepayers to subsidize the cost of needed distribution system modifications in order to assure cost-effective development of DG.

13. The active parties to this proceeding agree that there is a need to develop rules for DG interconnections to distribution systems that have a network configuration.

Conclusions of Law

1. It is reasonable to allow the utilities to estimate net generator output data for purposes of calculating a DG's cost responsibility surcharge, standby charges and other nonbypassable charges, as applicable, if the DG does not wish to install NGOM.

2. It is reasonable for Rule 21 to require a DG to install NGOM if its owner objects to the utility's estimates of CRS, standby and other nonbypassable charges.

3. The Commission should adopt the CEC's recommendations with regard to NGOM to the extent set forth herein.

4. Utility tariffs should state the utility's obligation to provide relevant detail regarding interconnection requirements where the DG developer disputes those requirements.

5. The Rule 21 Working Group should develop the procedure for providing the information and the types of information that should be included at the website regarding resolution of interconnection disputes.

6. For cases where a utility and a DG interconnection applicant are unable to resolve an interconnection dispute informally, Rule 21 should provide for a dispute resolution procedure that does not require the involvement of the Commission's Consumer Affairs Branch but instead requires the parties to request a mediator from the Commission or to engage a third party mediator by mutual agreement.

7. The utilities should be ordered to propose changes to fees for initial and supplemental application review and other interconnection processing activities in their respective electric ratemaking proceedings.

8. The utilities should be able to charge for extraordinary inspections as a way to encourage DG preparedness for the inspections.

9. For combined technology DG facilities utility tariffs should prohibit any provision or methodology that prevents export from an NEM generator even if the non-NEM generator is operating with certain protections to assure ratepayers do not unfairly subsidize non-NEM facilities.

10. In order to help assure utility ratepayers do not provide unintended subsidies to non-NEM generators in the form of bill credits where an NEM generator shares the facility, utility tariffs should provide that (1) any energy generated by the NEM generator that exceeds the customer's annual energy usage will not be compensated; (2) in no event will non-NEM generators receive credits and tariff benefits designed for NEM generators; and (3) any combined technology DG facility must install at its cost individual meters for the separate generators or breakers that prevent export from the non-net metering generator.

11. Non-NEM generators should continue to assume the costs of infrastructure improvements required to accommodate interconnections needed for Non-NEM facilities. If any portion of the costs attributable to the non-NEM generator cannot be readily identified, the utility should calculate that portion of the cost liability according to the share of annual expected energy of the total generated by the combined technology DG facility.

12. The Working Group should be ordered to develop proposed rules for DG interconnections to distributions systems that have a network configuration and to recommend a way to allocate costs and payments between two NEM generators operating under different tariffs at the same site.

INTERIM ORDER

IT IS ORDERED that:

1. The Report and Order of the California Energy Commission (CEC) dated February 2, 2005 and tendered for filing on February 16, 2005 is hereby included in the record of this proceeding.

2. Pacific Gas and Electric Company, Southern California Edison Company and San Diego Gas & Electric Company shall file modifications to Rule 21 of their respective tariffs no later than six months from the effective date of this order that modify Rule 21 for each utility as follows:

· DG facilities that do not receive regulated subsidies do not need to install net generation output metering (NGOM) where less intrusive and/or more cost-effective options for providing output data are available, consistent with existing Rule 21;

· DG facilities may opt to have the utilities estimate load data for purposes of calculating a DG facility's cost responsibility surcharge if the distributed generation (DG) owner does not wish to purchase NGOM, but DG facilities on a departing load-cost responsibility surcharge (DL-CRS) tariff may opt to install NGOM if the project objects to the utility's estimates of CRS liability;

· The utility shall provide to the DG project developer all relevant regulatory and/or technical detail regarding interconnections requirements where the utility and the DG project developer dispute the utility requirements;

· For cases where a utility and a DG owner are unable to resolve an interconnection dispute informally, Rule 21 shall provide for a dispute resolution procedure that requires the parties to request a mediator from the Commission or to engage a third party mediator by mutual agreement;

· With regard to DG facilities that include an NEM-eligible generator and a generator that does not qualify for net energy metering (non-NEM): (1) any energy generated by the renewable DG that exceeds the customer's annual energy usage will not be compensated as renewable DG; (2) in no event will non-net metering generators receive credits designed for NEM projects; and (3) any DG owner operating under two tariffs must install at its cost individual meters for the separate generators or breakers that prevent export from the non-net metering generator. Otherwise, for DG facilities that operate under two tariffs applicable to different technologies, utility tariffs should prohibit any provision or methodology that prevents export from an NEM generator even if the non-NEM generator is operating;

· A cost-based charge for DG project interconnection inspections for those inspections that are extraordinary and/or follow the first inspection.

3. The Rule 21 Working Group shall develop the procedure for providing the information and the types of information that should be included at the website required herein regarding resolution of interconnection disputes

4. The Rule 21 Working Group shall develop proposed rules for DG interconnections to distribution systems that have a network configuration. It shall also propose how to allocate costs and payments for DG facilities that include two NEM generators operating under different tariffs. The Working Group shall file its recommendations on these topics with this Commission and the CEC no later than March 31, 2006; the Assigned Administrative Law Judge may change this filing date for good cause.

This order is effective today.

Dated August 25, 2005, at San Francisco, California.

ATTACHMENT

RECOMMENDED CHANGES TO INTERCONNECTION RULES

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