STATE OF CALIFORNIA GRAY DAVIS, Governor
PUBLIC UTILITIES COMMISSION
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3298
January 10, 2003 Agenda ID #1638
TO: PARTIES OF RECORD IN RULEMAKING 99-10-025
This is the proposed decision of Commissioner Lynch, previously designated as the presiding officer in this proceeding. It will not appear on the Commission's agenda for at least 30 days after the date it is mailed.
The Commission may act at the regular meeting, or it may postpone action until later. If action is postponed, the Commission will announce whether and when there will be a further prohibition on communications.
When the Commission acts on the proposed decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.
Parties to the proceeding may file comments on the proposed decision as provided in Article 19 of the Commission's "Rules of Practice and Procedure." These rules are accessible on the Commission's website at http://www.cpuc.ca.gov. Pursuant to Rule 77.3 opening comments shall not exceed 15 pages. Finally, comments must be served separately on the ALJ and the assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail, or other expeditious method of service.
/s/ CAROL A. BROWN Carol A. Brown, Interim ChiefAdministrative Law Judge
CAB:tcg
COM/LYN/tcg DRAFT Agenda ID #1638
Quasi-legislative
Decision PROPOSED DECISION OF COMMISSIONER LYNCH
(Mailed 1/10/2003)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking into Distributed Generation. |
Rulemaking 99-10-025 (Filed October 21, 1999) |
(See Appendix A for List of Appearances.)
TABLE OF CONTENTS
Title Page
FINAL OPINION 1
1. Summary 2
2. Background 2
3. Outstanding Procedural Matters 3
4. Potential Benefits of Distributed Generation 3
4.1. Discussion 7
5. Distribution System Operations and Planning 10
5.1. System Operations 11
5.2. System Planning 12
5.2.1 Physical vs. Contractual Assurance 13
5.2.2 Incorporating Distributed Generation into System Planning 14
6. Ownership of Distributed Generation 19
6.1 Positions of Parties 20
6.2 Criteria for Evaluating Options 22
7. Need for a Distribution-Only Tariff 28
7.1 Does a Retail Sale within a Distribution Circuit
Utilize the Transmission System? 28
7.2 Should We Establish a Distribution-Only Tariff for Distributed Generators that Sell within a Single Distribution Circuit? 31
7.3 Jurisdiction over Distributed Generation Interconnections
when Sales of Excess Energy Occur 36
8. Rate Design 39
8.1 PBR Incentives/Pricing Flexibility 40
8.2 Public Purpose Program Funding 43
8.3 Localized/Deaveraged Rates 46
TABLE OF CONTENTS
(Continued)
Title Page
8.4 Implementation Costs 50
9. Net Energy Metering 52
9.1 Discussion 55
9.2 Eligibility of Integrated Renewable and Nonrenewable
Technology Configurations for Net Metering 58
10. Consumer Education 60
10.1 Discussion 64
10.2 Consumer Protection 67
11. Applicability of the California Environmental Quality Act to
this Decision 68
12. Governmental Efforts Regarding Distributed Generation 70
12.1 Local Government Outreach Regarding Interconnection
Standards 70
12.2 Identification of Permit Streamlining Opportunities 71
12.3 Air Quality Standards Established for Distributed Generation 73
13. Comments on Proposed Decision 74
14. Assignment of Proceeding 74
Findings of Fact 74
Conclusions of Law 76
FINAL ORDER 78
Appendix A - List of Appearances
1. Summary
This decision completes our rulemaking and establishes policies for ownership and operation of distributed generation and their integration into utility planning and operation of the distribution grid. We find that there is no need to place restrictions on ownership of distributed generation units. The technology of electricity distribution, however, necessitates that a distributed generation owner will only be eligible for compensation for deferring distribution system upgrades in limited circumstances, described herein, and only if the distributed generator offers physical assurance. Similarly, since almost every retail sale will utilize both the distribution and transmission networks (even those that appear to stay within a single circuit), we do not adopt a distribution-only tariff.
The nature of this new technology and its likely uses obviates the need to make any changes to rate design to accommodate distributed generation at this time. Nevertheless, we do allow the utilities to establish memorandum accounts to track distributed generation implementation costs that cannot be attributed to specific distributed generation projects and are not part of the utilities' existing budgets.
We do not adopt a mass marketing information campaign about distributed generation, but rather a multi-pronged education effort directed to those considering a distributed generation installation.
