Comments on Draft Decision

The draft decision of the ALJ in this matter was mailed to the parties in accordance with Pub. Util. Code § 311(g)(1) and Rule 77.7 of the Rules of Practice and Procedure. Comments were filed ______________.

Findings of Fact

1. D.03-06-071 held that RECs belonged to the generation owner, but were transferred to the utility along with the electricity under a standard RPS contract.

2. D.02-10-062 held that only new renewable DG installations were to be eligible for the RPS program.

3. DG facilities have received ratepayer subsidies that typically cover part of their equipment and capital costs.

4. The electrical output of individual renewable DG facilities is not consistently measured.

Conclusions of Law

5. For purposes of the renewable portfolio standards program, eligible renewable DG facilities should be treated equivalently to other types of eligible renewable generation to the extent that is feasible.

6. For purposes of the renewable portfolio standards program, our treatment of eligible renewable DG facilities should be consistent with our prior decisions relating to the RPS program.

7. The existence of ratepayer subsidies for renewable DG complicates the propriety of renewable DG participation in the RPS program.

8. The lack of consistent, accurate metering of the electrical output of renewable DG facilities is a barrier to the participation of renewable DG in the RPS program.

9. The Commission currently has a Rulemaking open relating to DG, R.04-03-017.

O R D E R

IT IS ORDERED that:

10. Consistent with our prior Decisions (D.) 02-10-062 and D.03-06-071 and the recommendation of Green Power Institute, our general policy under the renewable portfolio standards (RPS) program is that eligible renewable distributed generation (DG) facilities should be treated equivalently to other types of eligible renewable generation to the extent that is feasible.

11. The owner of a renewable DG facility owns the renewable energy credits associated with the generation of electricity from that facility, consistent with D.03-06-071.

12. Renewable energy credits associated with generation from eligible renewable DG facilities may be used to satisfy the utilities' requirements under the RPS program, consistent with D.03-06-071.

13. Renewable energy credits associated with generation from renewable DG facilities remain bundled with the associated electricity, consistent with D.03-06-071.

14. Renewable energy credits from eligible renewable DG facilities installed after October 24, 2002 qualify to be counted for purposes of the RPS program.

15. To the extent that renewable energy credits from eligible renewable DG facilities are counted for purposes of the RPS the associated electrical generation will also be added to the applicable utility's total retail sales.

16. Renewable energy credits from eligible renewable DG facilities cannot be counted for purposes of the RPS program until issues relating to subsidies and measurement are resolved, as described above.

17. The issues relating to subsidies and measurement will be addressed in the Commission's DG Rulemaking 04-03-017.

This order is effective today.

Dated ___________________, in San Francisco, California.