Findings of Fact

1. The demand for incentives in 2004, combined with limited funding for projects over 30 kW created a situation where cost-effective DG projects did not receive funding. This limitation on funding for viable projects would be mitigated by reducing the incentive payment levels.

2. Eliminating the maximum percentage payment caps would reduce the administrative costs of the program and simplify it.

3. Several incentive programs are available for distributed generation projects and may provide a single project with incentives that exceed costs.

4. Reducing incentives for some types of projects and eliminating the maximum percentage cap would increase the incentives available for viable projects. The existing $4.50 per watt incentive payment for renewable fuel cells does not need to be changed to address a shortage of funding for such projects.

5. No useful purpose is served by requiring projects on SGIP waiting lists to reapply for funds in subsequent funding cycles.

6. Increasing the maximum eligible capacity size to 5 megawatts, but retaining incentive payments up to 1 megawatt, would promote more cost-effective projects to the benefit of ratepayers and utility operations while maintaining enough funds to provide incentives to a number of viable projects.

7. Developing a data release format that resembles that used by the CEC for its Emerging Renewable Incentives Program and requiring developers to make project information available at their websites would improve the usefulness of information related to DG.

8. An incentive structure that predictably declines over time would promote a smooth transition to a market unsupported by SGIP rebates.

9. Developing a cost-benefit methodology for DG projects will assist in the evaluation of the program and related projects.

10. Existing administration protocols between SDREO and SDG&E are complex and have caused delays in program administration and incentive payments.

11. Providing SDREO more autonomy to administer the SGIP program would promote administrative efficiency and lower program costs.

12. Project proponents may demonstrate air emissions compliance with AB 1685 with a certificate from CARB or by presenting relevant documentation regarding facility operational characteristics.

13. Decision 01-03-073 prohibited utility distribution companies from receiving SGIP incentives.

14. The current caps on funding for government agencies and corporate parent companies hinder the goal of increasing DG capacity and may artificially inflate project costs.