"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, as modified by D.02-09-051, financial incentives are provided to three different categories (or levels) of distribution technologies:
Level 1: The lesser of 50% of project costs or $4.50/watt for photovoltaics, wind turbines and fuel cells operating on renewable fuels;
Level 2: The lesser of 40% of project costs or $2.50/watt for fuel cells operating on non-renewable fuel and utilizing sufficient waste heat recovery, and
Level 3: The lesser of 30% of project costs or $1.00/watt for micro-turbines, internal combustion engines and small gas turbines operating on non-renewable fuel that both utilize sufficient waste heat recovery and meet reliability criteria. For these same technologies operating on renewable fuel: The lesser of 40% of project costs or $1.50/watt.
The Commission authorized combined annual budgets of $125 million for the self-generation programs administered by Pacific Gas and Electric Company (PG&E), Southern California Gas Company (SoCal), Southern California Edison Company (SCE), and San Diego Regional Energy Office (SDREO) over a four-year period.2 The program was officially launched on June 29, 2001.
On April 24, 2002, Mafi-Trench filed a Petition requesting that the Commission permit turbo-expanders to qualify for the Level 1 incentive payments under the program. In its Petition, Mafi-Trench argues that turbo-expanders represent a "super clean" resource because there are no emissions resulting from the pressure drop that enables the technology to produce electrical power. Therefore, in Mafi-Trench's view, this technology should be eligible for the higher incentives offered under Level 1.
SCE responded to Mafi-Trench's Petition on May 24, 2002. SCE opposes the Petition on the basis that there is nothing on the record to substantiate Mafi-Trench's assertions that turbo-expanders offer "super clean" electrical generation or that the Level 1 incentive is the appropriate incentive level for this technology. SCE requests that the Commission reject the Petition until a sufficient record is developed to establish the qualification of turbo-expanders for Level 1 incentives. In the alternative, SCE suggests that the Commission allow this technology to qualify for Level 2 or 3 incentives until the appropriate record is established. In its reply comments, Mafi-Trench urges the Commission to accept the turbo-expander technology as qualifying for Level 2 incentives at this time, while it works with the Commission staff and parties "in developing the record to permit the technology to qualify for Level 1 incentives in the near future."3
2 PG&E, SoCal and SCE are the program administrators for the self-generation program within their service territories. Per D.01-06-035, San Diego Gas & Electric Company (SDG&E) subcontracts to SDREO to administer the self-generation program within its service territory. We refer to PG&E, SoCal, SCE and SDREO collectively as "the program administrators " throughout this decision and in Attachment 1. We refer to PG&E, SoCal, SCE and SDG&E collectively as "the utilities." 3 Reply of Mafi-Trench to Response of SCE to Petition, June 4, 2002, p. 2.