Assignment of Proceeding

Loretta Lynch is the Assigned Commissioner, and Meg Gottstein is the assigned ALJ in this proceeding.

Findings of Fact

1. As discussed in this decision, the incentives adopted in D.01-03-073 were structured to subsidize a certain percentage of project capital costs. However, Mafi-Trench has provided no information concerning the average costs of the turbo-expander technology it proposes to include under the self-generation program.

2. Considering turbo-expanders in isolation as a stand-alone generation technology would ignore the fact that this technology cannot produce electrical power without the existence of fossil-fueled compressors.

3. Because turbo-expander generation relies on fossil fuel inputs, it is neither super clean nor renewable.

4. The record lacks any data on the relative emissions of fuel cells (the only Level 1 technology with operational emissions) and turbo-expander generation when taking the fuel input requirements of compression stations into consideration.

5. There is no basis in the record to equate turbo-expander generation in terms of air emissions with Level 1, Level 2 or Level 3 renewable technologies. This technology could be considered eligible for Level 3 non-renewable incentives depends on the efficiency characteristics of turbo-expander generation and project costs. As discussed in this decision, we require additional information on these issues.

6. As discussed in this decision, Mafi-Trench's request raises other unanswered questions and concerns that should be addressed before a final determination on the eligibility of this technology for self-generation incentives can be made.

Conclusions of Law

1. Mafi-Trench's Petition should be denied at this time, without prejudice, pending the receipt and review of additional information concerning turbo-expander generation described in this decision.

2. Energy Division should develop recommendations for our consideration concerning the appropriateness of including turbo-expanders within the self-generation program. Energy Division may request additional data from Mafi-Trench and other sources, as appropriate, and consult with members of the Self-Generation Working Group in developing its recommendations.

3. As described in this decision, Energy Division should develop a proposal for the Commission's evaluation of additional technologies to be included in the self-generation program. Based on Energy Division's proposal and parties' comments, the Assigned Commissioner should establish such a process via Assigned Commissioner's ruling.

4. This order should be effective today.

INTERIM ORDER

IT IS ORDERED that:

1. The Petition for Modification of Decision 01-03-073 (Petition) filed by Mafi-Trench Corporation U.S.A (Mafi-Trench) on April 24 2002 (Petition) is denied without prejudice, pending the receipt and consideration of Mafi-Trench's responses to the questions listed in Ordering Paragraph 2. Should Mafi-Trench elect to forego the opportunity to respond to these questions, the Petition is denied with prejudice.

2. Mafi-Trench may respond to the concerns discussed in this decision by filing and serving responses to the following questions within 45 days from the effective date of this decision:


· What are the installed system costs (on a dollar per kilowatt basis), both average costs and with project examples included?


· What is the market potential for the application of this technology to recovery waste heat for the production of electrical power, both in terms of customer classes and total potential in California?


· How would this application aid in peak load reduction and what is an average expected generation profile?


· What efficiency does electrical power production from turbo-expanders achieve considering total inputs, including those required to produce the pressure differential in the first place? What is the total energy use for compression stations in California?


· How would this application meet the waste heat recovery and reliability requirements for Level 3 incentives, assuming it was considered eligible for incentives under that category?


· How could this application be monitored to ensure that the turbo-expanders are used for electrical production and not a different industrial process once they are installed?

3. Interested parties shall provide comments on Mafi-Trench's responses within 15 days from the effective date of this decision, and Mafi-Trench may reply within 10 days thereafter. After reviewing this information, Energy Division shall develop recommendations for our consideration concerning the appropriateness of including turbo-expanders within the self-generation program. Energy Division may request additional data from Mafi-Trench and other sources, as appropriate, and consult with members of the Self-Generation Working Group in developing its recommendations. Energy Division shall forward its recommendations to the Assigned Commissioner and Administrative Law Judge no later than 90 days from the date of this decision.

4. As discussed in this decision, Energy Division shall propose a process for Commission consideration of additional technologies to include in the self-generation program, including a schedule for submittals and review time. Energy Division's proposal shall be filed within 30 days from the effective date of this decision, and served on all parties to this proceeding. Comments on Energy Division's recommendations are due 15 days thereafter. Based on Energy Division's proposal and parties' comments, the Assigned Commissioner shall establish a process for the evaluation of proposals to add technologies to the program via Assigned Commissioner's ruling.

5. All filings required by this decision shall be filed at the Commission's Docket Office and served electronically on all appearances and the state service list in this proceeding. Service by U.S. mail is optional, except that one hard copy shall be mailed to the Assigned Administrative Law Judge. In addition, if there is no electronic mail address available, the electronic mail is returned to the

sender, or the recipient informs the sender of an inability to open the document, the sender shall immediately arrange for alternate service (regular U.S. mail shall be the default, unless another means-such as overnight delivery-is mutually agreed upon). The current service list for this proceeding is available on the Commission's web page, www.cpuc.ca.gov.

6. The Assigned Commissioner may, for good cause, modify the due dates required by this decision.

This order is effective today.

Dated January 16, 2003, at San Francisco, California.

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