10. Consumer Education

Some parties in R.98-12-015 indicated that a program should be undertaken to inform end-use customers about distributed generation. In R.99-10-025, we asked parties to discuss possible approaches to educate consumers about distributed generation and how such a program might be funded. In testimony, parties presented positions on whether consumer education is necessary, which consumers should be educated, the scope of information consumers will need, and who should oversee an education program. Some parties indicated the Commission should also consider developing consumer protection standards, and provide recommendations on specific program elements.

Few see a need for consumer education about distributed generation at this time. To the extent parties believe consumer education is necessary, they generally indicate the Commission should take the lead role in ensuring that consumers are provided with neutral, unbiased information about distributed generation. UCAN is the strongest proponent for proactive consumer education. According to UCAN, meaningful consumer education provides customers with an understanding of industry changes and tools so they can fully evaluate distributed generation. UCAN encourages us to recognize the importance of education as a means of accelerating distributed generation deployment. UCAN recommends we be proactive to ensure the availability of unbiased information, emphasizes that customers should be educated in simple terms, and the importance of educational information reaching customers at the time they make a purchase.

FEA believes that educational material about distributed generation options should be made available to consumers from an unbiased source. LIF believes that consumers should be informed about emerging distributed generation technologies and their potential benefit to system reliability. LIF wants consumers to know how to obtain information about distributed generation and how to protect themselves from unethical marketers. Both LIF and UCAN agree the program must be multi-lingual and multi-cultural.

SCE believes the Commission should be responsible for providing information to consumers but also notes that the California Energy Commission (CEC) currently conducts consumer education programs regarding renewable technologies, and might assume a similar role with distributed generation. SCE is not clear about which customer should be educated about distributed generation but it identified four general categories of information it believes consumers will seek:

· Technical/Economic - information about technical characteristics (such as fuel consumption, performance, consumption availability), initial cost, operating cost, available financing

· Safety Issues of distributed generation - hazards to persons and property

· Interconnection requirements - what are the required equipment and procedures to interconnect a distributed generation unit with the utility grid

· Consumer Protection - what if any consumer protections will be provided above and beyond existing law and status for electrical devices

PG&E opposes the idea of a utility-funded or sponsored program, although PG&E appears to agree that information regarding economic, safety, and reliability should be available to consumers. In rebuttal testimony, SCE retreated from its original view, to support PG&E's position that there is little need for a Commission-sponsored education program at this time.

SDG&E and DGS contend that given today's technologies, distributed generation applications will most likely be grid-side or installed at larger customer sites. Large customers are sophisticated users with sufficient informational resources to make informed choices about distributed generation. SDG&E states it would like to facilitate distributed generation deployment, but expresses uncertainty over who needs education and what they would be educated about. According to SDG&E, small customers do not need education on distributed generation, because the size and complexity of distributed generation, other than photovoltaics, make it impractical for small users to consider. SDG&E points out that photovoltaics have been available for years, and there is nothing new requiring an extensive education program. If distributed generation becomes more economic for residential and small commercial customers, then SDG&E and DGS agree that consumer education and consumer protection efforts may be required. SCE indicates that distributed generation would not be relevant to all its customers, and would be particularly cost prohibitive for low-income customers and those who move frequently.

PG&E states distributed generation developers should be responsible for public outreach and advertising associated with marketing their products. SCE asserts that as the distributed generation market develops, customers will have questions and will need information to assist them in making decisions about whether to install distributed generation, types of distributed generation to consider, installation and operation requirements, and distributed generation costs. Four likely sources of information are the Commission, the CEC, energy service providers and/or energy service companies, and the utilities.

SCE envisions the utilities' consumer education role focusing primarily on health and safety information, citing its statutory obligation under Section 119085 of the California Health and Safety Code to inform customers of electrical backfeed hazards of connected generators. A secondary role is to provide information on interconnection standards and procedures. SCE states that the utilities will inevitably be involved in consumer education, as consumers traditionally look to the utility to provide information about electric products in general, and their impacts to the customer's bill or facilities.

UCAN is doubtful of any efforts that rely upon incumbent utilities to provide objective and useful information about competitive services. UCAN recommends that the Commission require independent consumer education, either by a non-aligned entity or by the Commission. LIF and UCAN believe the Commission should not rely on distributed generation marketers to educate customers because marketing performed by service providers is not education. Customer education allows customers to make informed decisions through understanding their options. Distributed generation providers can offer customers insight only for the option the provider is selling.

UCAN recommends the Commission encourage the use of a stakeholder group to develop and review the educational messages and themes. Both LIF and UCAN support the use of community based organizations (CBOs) and non-traditional modes of education: community colleges, social service agencies, and other entities who have relationships with targeted customers. UCAN recommends use of the internet as a low-cost means of disseminating up to date information to the public and to CBOs. SCE agrees that the internet is low cost, but based on its work with CBOs participating through the Electric Education Trust grant program, believes that technology does not reach most CBOs or customers identified as vulnerable. DGS suggests that when appropriate, distributed generation education take a form similar to energy conservation programs.

10.1 Discussion

At this point in time, it appears that most distributed generation installations will be pursued by larger customers because size and economics will not support most residential applications.²² There is no question that residential and small commercial customers (as a whole) are less sophisticated in their energy decisions than large energy consumers. Therefore, to the extent that we decide to pursue a distributed generation education program, we should target such a program to residential and small commercial customers. However, because many smaller customers are unlikely to be approached to install distributed generation, a broad-based mass marketing campaign does not appear appropriate.

UCAN believes an education program should target customers not likely to be attractive to the market, or who are subject to higher levels of victimization. Because distributed generation requires significant up front investment by the customer, we think targeting educational materials to customers who are not likely to be attractive to the market is not a good use of resources. No matter how well educated they are, if the economics do not support a customer's investment in distributed generation, they will not make that investment. In our opinion, residential and small commercial customers will be best served if they are educated regarding what distributed generation options are available, what, if any, incentives or rebates are available if distributed generation is installed, how to determine the payback of a distributed generation investment, and the safety issues associated with interconnection. We intend to accomplish these objectives using a multi-pronged effort.

First, every year, we will require the utilities to include an insert in customer bills discussing distributed generation options, available incentives and rebates, and other sources of information on distributed generation. The utilities should place information on the bill face in English and Spanish, directing customers to the bill insert. The information for the bill insert will be prepared jointly by this Commission and the CEC, after consulting the parties, and supplied to the utilities for printing and distribution. Whenever possible, the information provided should be coordinated with the efforts authorized by D.01-03-073, through the Commission's self-generation incentive program. The utilities should employ a court-certified interpreter to translate the bill insert into multiple languages appropriate to their service territory after consultation with the Commission's Public Advisor. The bill insert is designed to make basic information about distributed generation available to all consumers and to let them know where to go to obtain more information.

In comments on the proposed decision, LIF suggested that in lieu of bill inserts we pursue an informational campaign using radio and television to target different language communities. As we described above, we do not believe this type of mass market approach will be useful at this point, but as the market for distributed generation grows we may consider these approaches.

Second, whenever a residential or small commercial customer, or their agent, request an interconnection application, the utility should be required to transmit directly to the customer detailed information about how to access: (1) a payback tool; (2) emissions information on various distributed generation technologies; and (3) information regarding permitting requirements for distributed generation. Each of these items will be developed and prepared by the CEC and this Commission. Consistent with their commitment set forth in the October 25, 2000 Supplemental Recommendation, we envision that the CEC will take the lead and serve as a central clearinghouse for information regarding distributed generation, emissions and permitting requirements, rebates, incentives and economics of distributed generation investments.

The payback tool we envision should allow a customer to input simple information (e.g. zip code, customer type, historic electricity usage, and the specific type of distributed generation unit being considered) into a web-based model. The model should produce a results sheet that allows the customer to see the costs and savings associated with the potential distributed generation investment. The results sheet should identify any rebates or incentives available for that specific distributed generation unit and how to apply for such rebates or incentives. In addition, the results sheet should identify the permitting and interconnection requirements for the distributed generation unit. These items should also be transmitted to residential and small commercial new construction accounts at the time a service connection is requested.

Third, in D.00-11-001 and D.00-12-037 we adopted streamlined interconnection standards applicable to all interconnected distributed generators. These interconnection standards lay out the technical requirements for interconnecting to the grid. We agree that customers that decide to pursue a distributed generation installation need to fully comprehend the safety and reliability implications of interconnection to the grid. By completing the interconnection process, we are confident that they will be fully apprised of these implications by utilities.

UCAN was the only party to submit recommendations on how a consumer education program might be funded. UCAN suggests four possible funding approaches. PG&E, SDG&E, and Sierra Pacific Power Company (Sierra) take the position there should be no utility funded customer education program. PG&E and SCE indicate there should be no publicly funded or sponsored effort. We believe that the responsibilities assigned to utilities are relatively low cost and should generally absorbable within their existing budgets. The responsibilities the CEC and we will handle should also be absorbable within our existing budgets. We note that the CEC's website already contains much of this information and in many cases, fulfilling these responsibilities will simply be a matter of tailoring this information for this particular purpose. Because we do not adopt a costly education campaign, we do not take up the funding options raised by UCAN, but we will revisit them in the event that costs associated with the program we have adopted exceed an absorbable level.

10.2 Consumer Protection

LIF and PG&E recommend the Commission consider consumer protection standards similar to those established for energy service providers in D.98-03-072 and D.99-05-034. LIF recommends that the Commission put these standards in place prior to extensive distributed generation proliferation. PG&E indicates that customers should be made aware of the economic, safety, and reliability aspects of distributed generation prior to committing to distributed generation installation. PG&E provides examples of specific consumer protection components the Commission might consider, such as a requirement for distributed generation developers to disclose price information in a standardized format similar to energy service providers, and a registration requirement for distributed generation vendors. Customers should be made aware of the economic, safety and reliability aspects of distributed generation before committing to having distributed generation installed. Economic aspects relate to the costs of deploying distributed generation, and include disclosure of all developer/vendor, operator and utility charges. Safety and reliability aspects include interconnection standards, and the operational responsibilities and features of customer-side distributed generation.

Consumer protection of residential customers, especially those with limited English skills, was necessary when direct access was launched, in order to ensure that customers were protected in the event that marketers engaged in deceptive marketing resulting in prohibitively high electricity rates. Switching direct access providers carried with it no or low up-front costs to customers. Unlike choosing an electric service provider, the decision to install distributed generation carries with it a significant up front cost to purchase the unit and pay for interconnection. In addition, any customer that wants to install distributed generation must complete a detailed interconnection application that is reviewed by the utility prior to interconnection taking place. The interconnection rules specify the safety and reliability responsibilities of the customer who installs distributed generation. For these reasons, we find that, coupled with our education plan, sufficient protection exists for residential and small commercial customers that renders additional consumer protection requirements unnecessary at this time. We will revisit this issue on our own motion or if deployment of residential and small commercial customer distributed generation reaches 0.1% of peak demand for those classes.