Draft Decision in Distributed Generation Proceeding

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cc:
Subject: Draft Decision in Distributed Generation Proceeding

----- Forwarded by Jeff Dasovich/NA/Enron on 03/19/2001 11:42 AM -----

"Daniel Douglass" <Douglass@ArterHadden.com<
03/19/2001 11:15 AM

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Subject: Draft Decision in Distributed Generation Proceeding

The Commission has issued a draft decision in the distributed generation
proceeding.? It?adopts the Energy Division's program proposals for load
control and distributed generation initiatives and?authorizes a total of
$137.8 million in funding for these programs, on an annual basis through
December 31, 2004.

Since the Commission cannot raise electric utility rates until?it has
determined that the rate freeze is over, it has decided to include the costs
of these programs in the utility's distribution revenue requirement, on the
electric side, and defer consideration of an electric rate increase until
the rate freeze ends.?
?
The three utilities are directed, within 15 days, to file Advice Letters
increasing their electric distribution revenue requirements, without
modifying current rates, to include the authorized program budgets.? In the
interim, all program costs?are to?be tracked in balancing accounts, and the
utilities should establish such accounts for this purpose.? The utilities
are also?directed to implement these programs, "without delay."

Under the adopted programs, SDG&E will administer a demand-responsiveness
pilot program, targeted to reach 5,000 residential customers in its service
territory. SCE will administer a similar pilot program, targeted to 5,000
small commercial customers. SDG&E and SCE will provide financial incentives
to customers who agree to set their thermostats at pre-specified levels.?
Through an internet interface, the utility will monitor and verify actual
interruption of loads at the customer site and provide interactive
information to customers about their electric usage, in order to encourage
peak demand reduction.? Within certain parameters, customers will have the
flexibility to override the thermostat settings, subject to pre-specified
penalties.

The draft decision would?also authorize a pilot program to provide
interactive consumption and cost information to small customers, such as
historical energy bill information, representative energy usage and cost
information for common appliances, and tariff options. PG&E?is directed
to?contract with an independent web designer to develop a website that
provides customer online access to this information.??The Commission's?goal
is to reach 10,000 to 15,000 customers in PG&E's service territory.? The
program will be targeted to residential customers with relatively high
monthly energy consumption, residential customers with swimming pools, homes
and small businesses in the San Francisco peninsula or in Silicon Valley,
and/or rural residences and small businesses.

The draft decision also proposes to implement a self-generation program
across all the utility service territories.? Under the program, financial
incentives will be provided to distributed generation technologies for
amounts ranging from $1 - $4 per watt and 30-50% of total project cost,
depending on the type of technology used.? There is a table on page 4 of the
draft decision which shows the amounts of the incentives.?

The utilities are required to outsource to independent consultants or
contractors all program evaluation activities, and are encouraged to
outsource as many other aspects of program implementation as possible.? All
installation of technologies (hardware and software) at customer sites will
be done by independent contractors, and not utility personnel.? The
utilities are encouraged to coordinate and work closely with local
governments, community-based organizations and business associations to
recruit and contact interested customers.
?
Dan
- 3-15-01 Draft Interim Decision.doc