BILL ANALYSIS                                                                                                                                                                                                    �




                                                                  AB 1624
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          Date of Hearing:   April 21, 2014

                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
                               Steven Bradford, Chair
                    AB 1624 (Gordon) - As Amended:  April 21, 2014
           
          SUBJECT  :   Self Generation Incentive Program

           SUMMARY  :   This bill extends authorization for the California  
          Public Utilities Commission (PUC) to collect funds from  
          ratepayers for specified technologies to receive incentives  
          under the Self Generation Incentive Program (SGIP) until 2020  
          and extend administration of the SGIP until 2021.  Specifically,  
           this bill  :  

          1)Provides an extension of the PUC's authority to collect funds  
            to be used for the SGIP program until 2020.

          2)Provides for an extension of the authority to administer the  
            SGIP program until 2021.

          3)Imposes new eligibility requirements for technologies: capable  
            of reducing demand from the grid, including peak electric  
            demand; commercially available; safely uses the existing  
            transmission and distribution system; reduces greenhouse gas  
            and improves air quality by reducing criteria air pollutants.

          4)Requires the PUC to use specified performance measure when  
            evaluating the impact and success of SGIP: the amount of  
            greenhouse gas avoided; reduced energy use for generation  
            technologies or reduced power use for storage technologies;  
            the aggregate non-coincident peak demand; the amount of  
            electricity actually generated by technologies; and the  
            ability of the technology to improve on-site energy  
            reliability.

          5)Within the performance measures for evaluation of SGIP,  
            specifies the PUC must establish a capacity factor for  
            generation technologies and defines how to establish a  
            capacity factor for energy storage.

          6)Specifies that in addition to the performance measures for  
            evaluating SGIP, the PUC must evaluate the SGIP's progress  
            toward reducing regulatory barriers to distributed energy  
            resources, including frequency regulation, voltage support,  









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            demand reduction, peak shaving, ramp rate control, and other  
            wholesale ancillary and grid reliability services.

           EXISTING LAW  

          a)Specifies the intent that SGIP increase deployment of  
            distributed generation and energy storage systems to  
            facilitate the integration of those resources into the  
            electrical grid, improve efficiency and reliability of the  
            distribution and transmission system, and reduce emissions of  
            greenhouse gases, peak demand, and ratepayer costs. (Public  
            Utilities Code 379.6(a))

          b)Specifies the intent of the Legislature that SGIP funds  
            provide an equitable distribution of the costs and benefits of  
            the program. (Public Utilities Code 379.6(a))

          c)Authorizes the PUC, to authorize the annual collection of not  
            more than the amount authorized for SGIP program in the 2008  
            calendar year, through December 31, 2014. (Public Utilities  
            Code 379.6 (a))

          d)Requires the PUC t to require electrical corporations to  
            administer the SGIP until January 1, 2016. (Public Utilities  
            Code 379.6(a))

          e)Requires the PUC to provide repayment of all unallocated funds  
            collected for the SGIP on January 1, 2016, to reduce ratepayer  
            costs. (Public Utilities Code 379.6(a))

          f)Restricts eligibility for SGIP incentives to those distributed  
            energy resources that the PUC, in consultation with the  
            California Air Resources Board (ARB), determines will achieve  
            reductions in emissions of greenhouse gases pursuant to the  
            California Global Warming Solutions Act of 2006. (Public  
            Utilities Code 379.6(b))

          g)Specifies emissions criteria for SGIP incentives for  
            combustion technologies and combined heat and power  
            technologies. (Public Utilities Code 379.6(c))

          h)Specifies certain conditions for projects that operate solely  
            on waste gas which, if not met, exclude them from receiving  
            SGIP incentives. (Public Utilities Code 379.6(c)(4))










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          i)Provides that the PUC may, in administering SGIP, adjust the  
            amount of rebates and evaluate other public policy interests,  
            including, but not limited to, ratepayers, energy efficiency,  
            peak load reduction, load management, and environmental  
            interests. (Public Utilities Code 379.6(e))

          j)Requires the PUC to ensure that distributed generation  
            resources are made available in the program for all  
            ratepayers. (Public Utilities Code 379.6(f))

          aa)Requires the PUC to provide an additional incentive of 20  
            percent from existing SGIP funds for the installation of  
            eligible distributed generation resources from a California  
            supplier. (Public Utilities Code 379.6(g))

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   

          1)Author's Statement. SGIP, one of California's first programs  
            to provide incentives for the deployment of distributed  
            generation and energy storage (collectively, distributed  
            energy resources or DER), creates an incentive for residential  
            and commercial customers to reduce the upfront costs of onsite  
            DER.  The program assists a wide swath of ratepayers - from  
            homeowners, multi-unit housing to large commercial facilities.  
            SGIP complements the Renewable Portfolio Standard (RPS) and  
            the California Solar Initiative (CSI) and will help  
            Investor-Owned Utilities comply with the CPUC's Energy Storage  
            Decision. SGIP also gives customers a choice about how to meet  
            their electricity needs with secure, clean DER.

            AB 1624 will permit the extension of a vital program for  
            incentivizing the development of distributive on-site  
            renewable energy facilities. These are needed to meet  
            increasing statewide demand for electricity, to reduce peak  
            demand pressures on the grid and help meet California public  
            policy goals of reducing greenhouse gas emissions and increase  
            the supply of clean renewable energy.  Additionally, a variety  
            of performance measures/metrics will be built into the  
            program, through AB 1624, to ensure that California's utility  
            ratepayers are being benefitted by the continuation of the  
            SGIP.

           2)Program History  . On August 31, 2000, the final day of the  









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            1999-2000 Legislative Session, AB 970 (Ducheny) was gutted and  
            amended.  The bill included a variety of provisions quickly  
            cobbled together in an effort to respond to the emerging  
            energy crisis in San Diego, where San Diego Gas and Electric  
            was the first utility to expose its customers to unfrozen  
            rates under California's ill-fated experiment with electric  
            industry restructuring.  Because the crisis was misunderstood  
            at the time to be the result of a physical supply shortage, AB  
            970's primary focus was to increase electric generation  
            supply, and most of the bill's provisions were related to  
            expediting the siting of power plants.

            A single sentence in AB 970 required the Public Utilities  
            Commission (PUC) to adopt "(d)ifferential incentives for  
            renewable or super clean distributed generation resources"  
            within 180 days of the effective date of the bill.  Aside from  
            the objective to "reduce demand for electricity and reduce  
            load during peak demand periods," no further definitions or  
            instructions were included in AB 970.  The bill required the  
            "reasonable costs" of the PUC's action to be included in the  
            distribution revenue requirement of PUC-regulated utilities.   
            This provision was not mentioned in the Senate or Assembly  
            bill analyses.

            Pursuant to this provision of AB 970, the PUC established the  
            SGIP in 2001, offering customer rebates for renewable and  
            "super clean" distributed generation resources.  SGIP has been  
            extended and/or modified by at least six bills since then.   
            Over the last 13 years, the SGIP has offered rebates for  
            installation of solar, wind, fuel cell, and certain renewable  
            and fossil fuel combustion resources meeting specified  
            emissions and efficiency standards.

            A 2005 report commissioned by the PUC to study the  
            cost-effectiveness of SGIP concluded that the program is  
            marginally cost-effective for participants (i.e., recipients  
            of funding), but is not cost-effective to non-participants  
            (i.e., ratepayers who pay for it).  Because SGIP is funded  
            from distribution rates, its costs are disproportionately  
            borne by residential ratepayers.  However, historically only  
            larger projects have been eligible for SGIP, so residential  
            ratepayers haven't been able to access the incentives.

            With the enactment of the California Solar Initiative (CSI)  
            through PUC order and SB 1 Murray (Chapter 132, Statutes of  









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            2006), photovoltaic (PV) systems were no longer eligible for  
            SGIP incentives.  PV incentives were provided instead under  
            the CSI.  .  In 2006, AB 2778 Lieber (Chapter 617, Statutes of  
            2006) extended SGIP for wind and fuel cells until 2012, but  
            excluded combustion projects.  

            In 2009, SB 412 Kehoe (Chapter 182, Statutes of 2009) extended  
            SGIP collection through 2011, modified eligibility to include  
            fossil fuel projects that reduce greenhouse gas (GHG)  
            emissions, and required the PUC to administer the program  
            until 2016 (the additional time was allotted to spend a $200+  
            million surplus accumulated from prior years). 

            A 2010 PUC investigation<1> on the performance of combined  
            heat and power (CHP) found that CHP projects experienced  
            increased time spent not operating, reductions in output when  
            operating, and decreases in electrical efficiency and thermal  
            heat recovery over time.  The investigation further found that  
            unexpected levels of maintenance and economic complexity have  
            dampened participant satisfaction.

            In response to a December 22, 2010 request from SGIP  
            administrators, the program was suspended by a PUC ruling  
            issued February 10, 2011, which froze applications received on  
            or after January 1, 2011.  The reason for the suspension was  
            that a rush of awards and applications, mostly from a single  
            vendor, had nearly exhausted both the current budget and the  
            accumulated surplus, leaving less funding than expected for  
            future awards under SB 412.  Later in 2011, the PUC adopted a  
            decision implementing SB 412 and reinstated the program.   At  
            the same time, the PUC made advanced energy storage systems  
            (AES) eligible for SGIP incentives.

            Notwithstanding the issues with the program and the SB 412  
            agreement to sunset SGIP in 2016, in 2011, AB 1150 V. Manuel  
            P�rez (Chapter 310, Statutes of 2011) allowed the PUC to fund  
            SGIP for an additional three years.  Under AB 1150, the PUC  
            may authorize the utilities to collect up to $83 million per  
            year from their customers through December 31, 2014.  However,  
            AB 1150 maintained the January 1, 2016 sunset on the program,  
            at which time the PUC must provide repayment of all  
            --------------------------
          <1> SGIP Incentive Program, Combined Heat and Power Performance  
          Investigation  http://www.cpuc.ca.gov/NR/rdonlyres/594FEE2F-B37A-4F 
          9D-B04A-B38A4DFBF689/0/SGIP_CHP_Performance_Investigation_FINAL_2 
          010_04_01.pdf  , April 2010,








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            unallocated funds to reduce ratepayer costs.

           3)2012 Program Evaluation. The most recent evaluation of SGIP,  
            "2012 SGIP Impact Evaluation and Program Outlook,"<2> was  
            prepared by Itron under contract and published by the PUC on  
            February 7, 2014.  Among the report's key findings are:

                 SGIP spent an average of $311 per metric ton of CO2  
               reductions through 2012.
                 Ratepayers paid $33 million in incentives for $7 million  
               in benefits (avoided costs) in 2012.
                 Of the completed SGIP projects (excluding PV projects), 
                  o         52% of the project capacity remains  
                    operational.
                  o         8% of the project capacity has been  
                    decommissioned.
                  o         14% of the project capacity is offline.
                  o         26% of the project capacity has no information  
                    available on the condition of the project.
                 Assuming build-out of the queue of pending SGIP projects  
               and continuation of the current program guidelines and  
               rules, GHG emission reductions and peak demand reductions  
               will grow.
                 There is insufficient independent information to  
               quantify market transformation impacts.

           1)Projects receiving incentives under the newer, performance  
            based SGIP  . The 2012 Program evaluation could not provide  
            insights into how projects were performing under revisions the  
            PUC made to the program to make it "performance based" in  
            order to address concerns expressed about less than stellar  
            performance reports in prior evaluations. In response to a  
            data request from the Natural Resources and Utilities &  
            Commerce Committees, the PUC provided supplemental information  
            on how the program is faring under its new performance based  
            criteria. The PUC reports that:

                 Greenhouse Gas Reduction Costs  . Current estimates, from  
               the available data on funded projects, indicate a reduction  
               in total cost for SGIP technologies from an average of $311  
               per metric ton of CO2 for projects installed before  
               D.11-09-015 to an average of $232 per metric ton of CO2 for  

             --------------------------
          <2> 2012 SGIP Impact Evaluation and Program Outlook,  
           http://www.cpuc.ca.gov/NR/rdonlyres/25A04DD8-56B0-40BB-8891-A3E29 
          B790551/0/SGIP2012ImpactReport_20140206.pdf  








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               projects installed after D.11-09-015.

                  Peak Demand Savings  . There is not currently adequate  
               data available to accurately calculate or predict peak  
               demand savings for projects funded and in the queue since  
               D.11-09-015. The current lack of data can be attributed to  
               two factors:

               1.     There are simply too few systems installed since  
                 D.11-09-015 that have been operating long enough to  
                 provide a sufficient data set to accurately report or  
                 predict peak demand savings.<3> 

               2.     There are currently data transfer issues between the  
                 SGIP database administrator and the program  
                 administrators (PA). The database administrator is in the  
                 process of adjusting the database so that it may receive  
                 all data for all projects. As the database administrator  
                 and the PAs were not anticipating the need to analyze  
                 this data until June 2014, the database infrastructure to  
                 receive certain data necessary for this analysis is not  
                 in place at this time.  

               The PUC reports that the data transfer issue will be  
               resolved, and additional data will be available for the  
               2013 Annual Impact Assessment report and the SGIP  
               Cost-Effectiveness Analysis report, both expected later  
               this year.

           1)SGIP Market Concentration.  In testimony provided at the joint  
            hearing held by this committee with the Assembly Committee on  
            Natural Resources in March 2014, The Utility Reform Network  
            (TURN) stated that SGIP funds the most expensive technologies  
            (fuel cells and batteries, which achieve lower greenhouse gas  
            reductions and do not assist with current electricity system  
            needs for flexibility and ramping. They pointed out that there  
            is little evidence of decreasing costs for the technologies  
            receiving SGIP incentives and question the value to electric  
            ratepayers providing subsidies to Bloom Energy, GE, and Tesla.  
          ---------------------------
          <3> Itron notes that actual savings from projects installed  
          before D.11-09-015 are not suitable for estimation purposes  
          given that the performance-based incentive (PBI) requirements  
          implemented by D.11-0-015 are expected to result in increased  
          savings.









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            According to TURN, between 2007 and the 3rd Quarter of 2013, 5  
            companies received the vast majority of the SGIP incentives:




















































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               ------------------------------------------------------------- 
              |Manufacturer        |   Incentives   |  Pending   |  Total   |
              |                    | (2007-3Q2013)  | Incentive  |          |
              |                    |                |  Requests  |          |
              |--------------------+----------------+------------+----------|
              |Bloom Energy        |    $170,068,200|$116,676,100|$286,744,3|
              |Corporation         |                |            |       00 |
              |--------------------+----------------+------------+----------|
              |Fuel Cell Energy    |     $43,875,000|           *|$43,875,00|
              |                    |                |            |         0|
              |--------------------+----------------+------------+----------|
              |UTC Power /         |     $16,502,000|           *|$16,502,00|
              |ClearEdge           |                |            |         0|
              |--------------------+----------------+------------+----------|
              |GE Energy           |     $10,801,000| $34,723,660|$45,524,66|
              |                    |                |            |        0 |
              |--------------------+----------------+------------+----------|
              |Tesla               |             N/A| $26,184,124|$26,184,12|
              |                    |                |            |         4|
              |--------------------+----------------+------------+----------|
              |Stem Inc.           |               *|  $9,362,448|$9,362,448|
              |                    |                |            |          |
              |--------------------+----------------+------------+----------|
              |Caterpillar         |               *|  $6,293,000|$6,293,000|
              |                    |                |            |          |
              |--------------------+----------------+------------+----------|
              |Mitsubishi Power    |      $5,250,000|           *|$5,250,000|
              |Systems             |                |            |          |
              |--------------------+----------------+------------+----------|
              |All Others          |     $18,912,476| $62,667,184|$81,579,66|
              |                    |                |            |        0 |
              |--------------------+----------------+------------+----------|
              |Total               |    $265,408,676|$255,906,516|$521,315,1|
              |                    |                |            |92        |
               ------------------------------------------------------------- 
              
                 These companies may have received incentives that are in  
               the "All Other" category but were not ranked as high for  
               the period.

           1)Can SGIP provide Market Transformation? Although "market  
            transformation" is not mentioned in the SGIP statute, much  









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            less defined, the PUC states that it is one of the four  
            principal goals of the current SGIP program.  The most  
            specific description of SGIP market transformation appears in  
            the PUC initial SGIP staff proposal,<4> which states the  
            following:

               "SGIP should complement the structure of and be coordinated  
               with existing ratepayer supported programs, especially the  
               California Solar Initiative, which is aimed at transforming  
               the market for renewable distributed generation by driving  
               down prices and increasing performance of (distributed  
               energy resources)."

            and:

               "Market Transformation Objectives - Technologies that may  
               not be cost-effective today, but have the potential to be  
               cost-effective in the near future, can be supported along  
               the path toward cost-effectiveness through incentives. By  
               facilitating greater deployment of these technologies, SGIP  
               may help these technologies achieve economies-of-scale,  
               which can drive down costs. However, SGIP is likely to only  
               be a small part of the global market for these  
               technologies, and [PUC] staff does not expect that the  
               California market can play a significant (or measurable)  
               role in market transformation."

               If the California market can play a significant or  
               measureable role in market transformation through the SGIP  
               program then it should not be a goal of the program.

           2)Time for new focus for SGIP?  AB 1624 provides a new focus on  
            technologies that receive SGIP incentives and also provides  
            stricter performance and evaluation criteria. By doing so, AB  
            1824 provides some level of assurance that if it is enacted,  
            the next time a reauthorization is requested, the Legislature  
            will be able to gauge the extent to which the program has made  
            improvements to address the statutory goals.

           3)Time for a new funding source for SGIP?   The PUC is currently  
            authorized to collect no more than $83 million annually to  
            support SGIP and to provide for repayment of unallocated funds  

          ---------------------------
          <4> SGIP Staff Proposal,  
           http://docs.cpuc.ca.gov/PublishedDocs/EFILE/RULINGS/124214.PDF  ,  
          page 20, September 2010








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            when the program terminates in 2016. California ratepayers  
            have contributed approximately $925 million in funds to  
            provide SGIP incentives through 2013. Adding to that, the  
            costs are disproportionately borne by residential ratepayers  
            even though residential customers have not participants in  
            this program. With SGIP's focus on greenhouse gas emission  
            reductions and very little evidence that there can be a  
            ratepayer benefit, it may be worth considering using a  
            different source to fund SGIP.
                                                                
            In 2012, the Legislature approved SB 1018 Committee on Budget  
            and Fiscal Review (Chapter 39, Statutes of 2012) which  
            included a provision that allows the PUC to allocate up to 15  
            percent of the revenues received as a result of the direct  
            allocation of greenhouse gas allowances to electrical  
            corporations to be used for clean energy and energy efficiency  
            programs that are not otherwise funded by another funding  
            source. (Public Utilities Code 748.5(c))

            The PUC decided not to make this allocation in its Decision  
            12-12-033 and instead increase the amount of fund available to  
            be returned to customers of the electrical corporations.  
            According to the PUC, in total, the five utilities (PG&E, SCE,  
            SDG&E, PacifiCorp and Liberty) will return $1.2 billion in  
            allowance revenue to customers in 2014, while they introduce  
            approximately $840 million in Cap and Trade costs over this  
            same time. In its decision, the PUC encouraged parties to  
            continue to present proposals for energy efficiency and clean  
            energy projects to be funded with allowance revenue.

             The author may wish to consider an amendment that will replace  
            the ratepayer funds used to support SGIP with the funds that  
            were authorized pursuant to section 748.5(c) of the Public  
            Utilities Code.

             While this new source of funding is helpful to extending the  
            program, it should also be clear that SGIP must not be treated  
            as a never-ending program. Declining incentives have helped  
            industry to make progress toward commercialization without  
            subsidy (for example, the California Solar Initiative's  
            10-year program with a 7% annual decline in incentives. SGIP  
            was established in 2000 and began as a program in 2001. AB  
            1624 calls for a 6-year extension, however, it provides  
            incentives to a wider variety of technologies.
             









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            In addition, the author may wish to reduce the total amount  
            authorized in the annual allocation by 10 percent per year and  
            direct the PUC to re-prioritize SGIP funding, beginning in  
            2018 to reduce eligibility, reduce the incentive amount, or  
            both so that SGIP is more likely to fund those technologies  
            that will improve their ability to reduce greenhouse gas  
            emission costs and produce electricity at a time and in a  
            manner that reduces peak demand for electricity. For example,  
            total amount of SGIP incentives available in 2015 would be $83  
            million, in 2016 it will be reduced to $74.7 million, in 2017  
            it will be reduced to $66.4 million, and so on.

          4)Energy storage.  Energy storage is not a generation technology.  
            Thus its benefits are limited to when it can offset peak  
            electricity demand, reduce greenhouse gas emissions, and  
            contribute to reducing peak demand or grid reliability when  
            needed and available. Currently energy storage receives SGIP  
            incentives without a specified level of support. The PUC  
            allows SGIP incentives for "advanced energy storage," however,  
            the PUC has not established a definition of what types of  
            technologies are advanced, consistent with the SGIP goals  
            specified in statute.  

             In order to ensure that SGIP funds are used for advanced  
            energy storage, the author may wish to consider directing the  
            PUC to create an advanced energy storage component within the  
            SGIP with a separate budget within the annual allocation and  
            direct the PUC to define "advanced energy storage" in an open  
            or new proceeding.

            In addition, AB 1624 proposes a definition of capacity factor  
            for energy storage systems eligible for incentives that is  
            more consistent with the benefits of energy storage.  The  
            author may wish to modify the definition to reference advanced  
            energy storage systems and modify the language so that the  
            ratio of the number of hours an advanced energy storage system  
            is available for capacity applications is based on the number  
            of hours between Monday and Friday, excluding holidays, during  
            each electrical corporation's peak electricity demand periods.  
            This will ensure that the capacity factor for advanced energy  
            storage is based on the benefits of when storage is available  
            to offset peak electricity demand.  

           5)Reducing barriers to the adoption of distributed energy  
            resources.  AB 1624 adds criteria for the PUC to use when  









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            evaluating SGIP related to measuring the programs progress  
            toward reducing barriers to the adoption of distributed energy  
            resources, including, but not limited to, interconnection  
            costs and the length of time to complete interconnection.  
            While these are important issues, they are being addressed in  
            other venues, such as the PUC's Rule 21 Working Group. The  
            2012 SGIP Evaluation report did not mention interconnection as  
            a barrier in this program.

             The author may wish to strike this new responsibility so that  
            the scope of the SGIP program is not expanded.
           
           6)Support and Opposition.
           
            Supporters request extension and emphasize the program's  
            benefits for reducing greenhouse gas emissions.

            Sempra supports AB 1624 and suggests amendments to direct the  
            incentives directly to the end use customer, eliminate  
            incentives for battery energy storage because other incentives  
            are already available, and that SGIP funding be reduced by 20%  
            each year over a 5-year period to help accelerate the market  
            for these technologies.

            The contract administrator for SGIP, the California Center for  
            Sustainable Energy (CCSE), also supports extending SGIP.

            TURN opposes extension of SGIP because it would extend a very  
            high subsidy for private commercial customers and a handful of  
            manufacturers, and is an ineffective and costly means to  
            reduce carbon emissions. TURN does not oppose allowing an  
            extension to expend funds already collected.



           7)Related Legislation.
           
            AB 1499 (Skinner, 2014) would extend SGIP for 3 years.

          8)Suggested amendments.

            379.6.  (a) (1) It is the intent of the Legislature that the  
            self-generation incentive program increase deployment of  
            distributed generation and energy storage systems to  
            facilitate the integration of those resources into the  









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            electrical grid, improve efficiency and reliability of the  
            distribution and transmission system, and reduce emissions of  
            greenhouse gases, peak demand, and ratepayer costs. It is the  
            further intent of the Legislature that the commission, in  
            future proceedings, provide for an equitable distribution of  
            the costs and benefits of the program.
            (2) The commission, in consultation with the Energy  
            Commission, may authorize the annual collection of not more  
            than the amount authorized for the self-generation incentive  
            program in the 2008 calendar year, through December 31, 2020.  
            The commission shall require the administration of the program  
            for distributed energy resources originally established  
            pursuant to Chapter 329 of the Statutes of 2000   through and  
            including December 31,  2021   2014  .  Beginning January 1, 2015,  
            the commission shall allocate up to $83 million from the funds  
            allocated for clean energy programs pursuant to section 748.5  
            (c) of the Public Resources Code. Beginning on January 1, 2016  
            and each year thereafter until December 21, 2021, the  
            commission shall reduce the amount allocated by $8.3 million  .  
            On January 1, 2022, the commission shall provide repayment of  
            all unallocated funds collected pursuant to this section to  
            reduce ratepayer costs.

            (f) In administering the self-generation incentive program,  
            the commission shall do  both of  the following:
            (1) Determine a capacity factor for each distributed  
            generation system in the program.
                (2) Define eligibility of advanced energy storage based on  
               characteristics that have electricity and greenhouse  
               emission benefits and dedicate allocate a portion of the  
               SGIP annual budget specifically to advanced energy storage  
               technologies based on their potential benefits for reducing  
               greenhouse gas emissions and reducing peak electricity  
               demand.
               (3)  Define a capacity factor for  advanced  energy storage  
               systems in the program as the ratio of the total hours the  
               advanced  energy storage system is used for charging and  
               discharging throughout the year,  over the 10 year useful  
               life of the advanced energy storage system  , including the  
               hours when the energy storage system is available for  
               capacity applications even if not actively charging or  
               discharging, to the total number of  peak  hours  in a the  
               year.  ,  Monday through Friday, excluding holidays.  

               (k) (1) The commission shall evaluate the overall success  









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               and impact of the self-generation incentive program based  
               on the following performance measures:
               (A) The amount of reductions of emission of greenhouse  
               gases.
               (B) The amount of reductions of emissions of criteria air  
               pollutants measured in terms of avoided emissions and  
               reductions of criteria air pollutants represented by  
               emission credits secured for project approval.
               (C) The amount of energy reductions measured in energy  
               value.
               (D) The amount of reductions of aggregate noncoincident  
               customer peak demand.
               (E) The ratio of the electricity generated by distributed  
               energy resource projects receiving incentives from the  
               program to the electricity capable of being produced by the  
               distributed energy resources projects, commonly known as a  
               capacity factor.
               (F) The value to the electrical transmission and  
               distribution system measured in avoided costs of  
               transmission and distribution upgrades and replacement.
               (G) The ability to improve onsite electricity reliability  
                as compared to onsite electricity reliability before the  
               SGIP technology was placed in service.  
               (2) In addition to evaluating the program based on the  
               performance measures specified in paragraph (1), the  
               commission shall also evaluate  both of  the following:
                (A) The program's progress toward reducing barriers to the  
               adoption of distributed energy resources, including, but  
               not limited to, interconnection costs and the length of  
               time to complete interconnection.
                (B) The program's effectiveness in providing frequency  
               regulations, voltage support, demand reduction, peak  
               shaving, ramp rate control, and other wholesale ancillary  
               and grid reliability services.

               New section (l): after section (k):

                To ensure that the self-generation incentive program is  
               more likely to fund those technologies that will improve in  
               their ability to reduce greenhouse gas emission reduction  
               costs and produce electricity at a time and in a manner  
               that reduces the peak demand for electricity, beginning in  
               March 2017 and each year thereafter, as long as the SGIP  
               program is providing incentives, the commission shall  
               review the level of incentives and the cost of the  









                                                                 AB 1624
                                                                  Page P
               technologies that are receiving incentives and (1) allow  
               incentive eligibility for new technologies or (2) remove  
               incentive eligibility or reduce incentives for technologies  
               that have received incentives but have not reduced  
               greenhouse gas emission reduction costs or provided a  
               ratepayer benefit.
           
           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Advanced Energy Economy
          Agricultural Energy Consumers Association (AECA)
          American Vanadium Corp.
          Association of California Water Agencies (ACWA)
          AT&T
          Bergey Wind Power
          Bioenergy Association of California
          Bloom Energy
          Bosch Energy Storage
          California Association of Sanitation Agencies (CASA)
          California Energy Storage Alliance (CESA)
          California Manufacturers & Technology Association (CMTA)
          California Solar Energy Industry Association (CalSEIA)
          California State University
          Capstone Turbine Corporation
          ClearEdge Power
          CODA Energy
          Direct Access Customer Coalition
          EDF Renewable Development, Inc.
          EnerVault
          Environmental Defense Fund
          EtaGen
          EV Grid
          Facebook
          Fuel Cell Energy (FCE)
          Green Charge Networks
          Imergy Power Systems
          Inland Empire Utilities Agency (IEUA)
          LightSail Energy
          Outback Power Technologies
          Parker Hannifin's Global Energy Grid Tie
          Powertree Services, Inc.
          Primus Power
          Providence Health & Services









                                                                  AB 1624
                                                                  Page Q
          Rosendin Electric
          San Diego Gas and Electric (SDG&E) (if amended)
          Seeo, Inc.
          Solar Energy Industries Association (SEIA)
          SolarCity
          Southern California Gas Company (SoCalGas) (if amended)
          Stem, Inc.
          TechNet
          Yahoo!

           Opposition 
           
          The Utility Reform Network (TURN)
           
          Analysis Prepared by  :    Susan Kateley / U. & C. / (916)  
          319-2083