The California Public Utilities Commission ("CPUC") has given the green light to a five-year solar photovoltaic program to develop up to 500 MW of solar PV facilities in Pacific Gas and Electric Co.’s ("PG&E") service area.

The program is designed to allow PG&E and third parties to develop PV facilities:

• Under the utility-owned part of the program, PG&E may install up to 250 MW of PV facilities over 5 years, at a rate of 50 MW per year.  Each facility will have between 1 and 20 MW of capcity and will be located in PG&E’s service area. The CPUC has allocated up to $1.454 billion for capital costs which will be adjusted if PG&E develops less than 250 MW over the five-year duration of the PV program.  PG&E will solict competitive bids for the construction  of the facilities, which it will own and operate.

• Under the third-party-owned part of the program, PG&E can solicit energy from up to  250 MW of PV facilities which  located in PG&E’s service area and which are owned by third parties – same size and annual installation restrictions apply.  Pricing for this portion will be based on competitive bids, with the successful bidders entering into a 20-year power purchase agreement with PG&E.

In an effort to secure good rates, CPUC is requiring PG&E  to use an independent evaluator to review the bids on both parts of the program.

PG&E built a 2 MW pilot project  in Vacaville, CA to demonstrate the viability of this program. The CPUC decision allows PG&E to recover the costs of construction the pilot project.