2. Background
The Commission adopted certain load control and distributed generation initiatives on March 29, 2001, pursuant to AB 970. We authorized a total budget of $137.8 million annually through 2004: $12.8 million for load control, and $125 million for self generation. Under the self generation program adopted in D.01-03-073 and modified in D.02-09-051, certain entities qualify for financial incentives to install three different categories (or levels) of clean and renewable distributed generation used to serve some portion of a customer's onsite load:
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,
Level 3:
· 3-R: The lesser of 40% of projects costs or $1.50/watt for microturbines, internal combustion engines, and small gas turbines utilizing renewable fuel.
· 3-N: The lesser of 30% of project costs or $1.00/watt for the above combustion technologies operating on non-renewable fuel, utilizing sufficient waste heat recovery and meeting certain reliability criteria.
The Commission recognized that certain events, such as legislation, market activity, or outcomes of the SGIP program evaluation process, could require modifications to the SGIP during the course of the program. In subsequent orders, the Commission took actions to refine the program, such as adopting a reliability requirement, developing renewable fuel criteria, and increasing the maximum eligible size from 1 MW to 1.5 MW.
On October 12, 2003, the Governor signed AB 1685. The legislation adopts emissions and efficiency requirements that fossil-fueled DG projects must meet in order to be eligible for SGIP rebates, and extends the SGIP through December 31, 2007. The new emissions standards go into effect in two phases: January 1, 2005, and January 1, 2007.
On September 27, 2004, the Governor signed AB 1684. This law makes projects that operate on waste gas eligible for incentives, subject to certain requirements in the law.
On December 10, 2003, an Administrative Law Judge (ALJ) ruling issued in Rulemaking (R.) 98-07-037 requested comments to the evaluation reports prepared by Itron, as well as on other SGIP-related issues.
On July 9, 2004, the ALJ issued a ruling seeking comments on an Energy Division report that recommended program modifications.
The following organizations responded to one or both ALJ rulings: Pacific Gas & Electric Company (PG&E), Southern California Edison Company (SCE), Southern California Gas Company and San Diego Gas & Electric (Sempra), California Solar Energy Industry Association (CALSEIA), The Center for Energy Efficiency and Renewable Technologies (CCERT), Distributed Energy Strategies (DES), Joint Parties Interested in Distributed Generation1 (JPIDG), Powerlight Inc. (Powerlight), RWE Scott Solar Inc., MegaWatt Inc., Sacramento Municipal Utility District (SMUD), The City and County of San Francisco (San Francisco), the City of Oakland/Rahus Institute, Prevalent Power, Uni-Solar, Occidental Power, Borrego Solar Systems Inc.,2 and the California Fairs Alliance of Western Fairs Association (Western /Fairs). This decision resolves the issues addressed in Energy Division's report.
1 JPIDG membership includes Capstone Turbine Corporationems Inc., Chevron Energy Solutions, Cummins Cal-Pacific, Cummins, Inc., next.edge, Inc., Northern Power Systems, Inc., Real Energy Inc., Simax Energy, and Solar Turbines, Inc. 2 Borrego represents Eco Energies, Inc., Sun Light and Power, Quality Solar, and CC Energy.
