KLM/hl2 7/9/2004

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking Regarding Policies, Procedures and Incentives for Distributed Generation and Distributed Energy Resources.

Rulemaking 04-03-017 (Filed March 16, 2004)

ADMINISTRATIVE LAW JUDGE'S RULING REQUESTING COMMENTS ON ENERGY DIVISION RECOMMENDATIONS TO IMPROVE THE SELF GENERATION INCENTIVE PROGRAM AND IMPLEMENT ASSEMBLY BILL 1685

This ruling seeks comments on the attached Energy Division report regarding improvements to the Self Generation Incentive Program (SGIP) authorized originally by Assembly Bill (AB) 970. In reaching its conclusions, the Energy Division report considers four evaluation reports submitted by Itron on behalf of the program administrators, and parties' comments. The comments were filed in response to an Administrative Law Judge ruling dated December 10, 2003 and issued in R.99-10-025, in which the Commission reviewed distributed generation policies before opening this rulemaking. The attached report also addresses a motion filed by California Solar Energy Industries Association on March 26, 2004.

Parties should file their comments on the Energy Division report no later than July 23, 2004.

IT IS RULED that:

1. Comments on the attached Energy Division report are due by July 23, 2004.

2. All comments required by this ruling shall be filed at the Commission's Docket Office in this proceeding, and served electronically to all appearances and the state service list. 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 is mutually agreed upon). Parties that prefer a hard copy or electronic file in original format in order to prepare filings in this proceeding may request service in that form as well. The current service list for this proceeding is available on the Commission's web page, www.cpuc.ca.gov.

Dated July 9, 2004, at San Francisco, California.

		/s/ KIM MALCOLM
		Kim Malcolm Administrative Law Judge

Energy Division Recommendations to Improve the
Self Generation Incentive Program and Implement
Assembly Bill 1685

Summary

This report prepared by the Energy Division recommends specific improvements to the Self Generation Incentive Program (SGIP) created by Assembly Bill (AB) 970. The recommendations are based on three years of program experience as described in the SGIP evaluation reports submitted under R.98-07-037, comments to the reports, and suggestions by interested parties. The staff's proposed modifications implement the provisions of Assembly Bill (AB) 1685, maintain the annual SGIP budget of $125 million through 2007, eliminate the maximum percentage payment limits, and reduce the dollar-per-watt incentive payment for certain Level 1 technologies. Additionally, staff recommends the Commission retain the San Diego Regional Energy Office (SDREO) as a non-utility program administrator through 2007, and expand the Working Group to include industry participation.

Energy Division further recommends processes to make more SGIP data publicly available, and to coordinate and complete the DG cost effectiveness analyses specified in AB Bill 58 (net metering) and AB 970. And, lastly, we recommend the Commission clarify which, if any, utility distribution companies are eligible to receive SGIP incentives.