Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and Robert Barnett is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. Farm ACW is a 1,000-acre avocado farm with approximately 180,000 avocado trees.

2. Farm ACW's largest generator (1,500 kW), to serve the entire farm, was installed in 1992 or 1993, and was moved to the farm's generator building in 1995. The generator is nonmobile.

3. The generator services the farm irrigation system which delivers not only water to the 180,000 producing trees, but also fertilizer, which is mixed with the water pumped from the farm's wells and is conveyed over the farm's 1,000 acres.

4. One of the most important nutrients avocadoes require is potassium, and the best compound to provide that nutrient is the relatively insoluble potassium sulfate. In order to dissolve the potassium sulfate, the water temperature in the mixing pond is increased using the waste heat from the generation process.

5. On or about January 22, 2001, Farm ACW disconnected both its lower voltage level switch and its main switch from SDG&E's system. After the disconnect, electricity could not flow from SDG&E's system to the farm.

6. Farm ACW expert analyzed the Farm ACW's cogeneration process. She concluded that 6.8% of the energy produced by Farm ACW's generator was in the form of useful thermal energy, surpassing the 5% requirement of the statute. She concluded that the fuel efficiency of the cogeneration system was 43.2%, surpassing the statutory requirement of 42.5%. She gave her expert opinion that Farm ACW's generation facility satisfied both standards for cogeneration established by Section 218.5. The Farm ACW witness is qualified to give that opinion.

7. Dr. Arterberry's expert witness reasonably relied on Dr. Arteberry's testimony in order to form her opinions.

8. July 23, 2001 is the date on which SDG&E determined that Farm ACW was operating generation on-site to meet its load and the date on which SDG&E calculated revised bills including standby fees and departing load back to January 23, 2001.

9. August 3, 2001 is the date on which SDG&E service to Farm ACW was de-energized by SDG&E.

10. Complainant's cogeneration operation comes within the exception to SDG&E's Rule 23. Farm ACW's consumption is served by: (1) nonmobile on-site cogeneration capacity that was operational on or before December 20, 1995. (Rule 23, Cal P.U.C. Sheet No. 10619-E, No. 2(b).) Consumption served by complainant's nonmobile cogeneration facility is not subject to the billed CTC calculation, per Section 372(a)(4) of the Pub. Util. Code. (Rule 23, Cal. P.U.C. Sheet No. 10620-E, No. 2(d).) Because complainant is exempt by Rule 23, Schedule E-Depart exempts him from ND and PPP charges (Cal. PUC. Sheet No. 18385-E, Special Condition 3.)

11. Complainant is not liable for PPP, ND costs, and CTC for the period January 22, 2001 to July 3, 2005.

12. Standby service is applicable to complainant because SDG&E would have provided standby or breakdown service to complainant for the period from January 2001 until August 2001 had complainant simply made the unilateral decision to throw a switch and reconnect to SDG&E's grid.

13. Any customer that unilaterally disconnects from a utility electric system but retains control over whether it draws power from the grid must be assessed standby charges for the privilege of so deciding.

14. Complainant, dba Farm ACW, is not liable for any departing load charges but is liable for standby charges of $16,235.

Conclusions of Law

1. Complainant is not liable for PPP, ND, and CTC costs for the period January 22, 2001 to July 3, 2005.

2. Complainant is liable to defendant for $16,235 for standby charges.

ORDER

IT IS ORDERED that:

1. The money on deposit with the Commission shall be disbursed as follows: $16,235 to defendant SDG&E and the balance to complainant.

2. Case 05-07-001 is closed.

This order is effective today.

Dated April 12, 2007, at San Francisco, California.

MICHAEL R. PEEVEY

President