CPUC Approves Standard Contract for New California Feed-In Tariff

The California Public Utilities Commission has adopted Decision 13-05-034, approving PG&E, SCE, and SDG&E’s joint standard contract for California’s expanded feed-in tariff (FiT) program. D.13-05-034 also revises several provisions of the FiT tariff and addresses two petitions to modify D.12-05-035, the Commission’s previous decision implementing the expanded FiT. The most recent legislation affecting the FiT, SB 1122 (2012), directing the utilities to procure 250 MW from bioenergy projects, is not addressed in D.13-05-034, but will be implemented in a later decision.

Barring any delays in finalizing the contract and tariff revisions ordered in D.13-05-034, the utilities will begin accepting Program Participation Requests for the new FiT on October 1, 2013 and the first bi-monthly FiT program period will commence November 1, 2013.

For details on changes to the FiT approved in D.13-05-034, and requests for modification rejected by the Commission, read on.

In response to petitions for modification of D.12-05-035, the Commission made a limited number of changes to the FiT in D.13-05-034:

  •  The number of MWs offered in each bi-monthly program period was adjusted so that adequate capacity was offered in each product category. PG&E and SCE will offer 5 MW in each product category – baseload, peaking as-available, and non-peaking as-available – each bi-monthly period. SDG&E must offer 3 MW of each product type each program period.
  • The FiT price will continue to adjust bi-monthly, but D.13-05-034 places a cap of $12 on the total price period adjustment. The threshold for triggering a price adjustment in a subsequent bi-monthly period was modified to reflect market demand, rather than simple subscription rates. Now, rather than requiring 100% subscription of available capacity in a bimonthly period to trigger a price decrease, a decrease will occur if the total capacity of projects for which applicants have expressed willingness to execute a contract at the offered price is 100% (or more) of available capacity. A price increase will be triggered when the total capacity of projects for which applicants have indicated a willingness to execute a contract is less than 20% of offered capacity in a bi-monthly period. Previously, subscription of 50% of available capacity or less during a program period would trigger a price increase.
  • D.12-05-035 provided that contracted MWs are added back into the program’s available capacity after a change in circumstances, such as the termination of a project prior to its delivery of electricity. D.13-05-034 clarifies that MWs will be placed back into the available capacity of the product type of the terminated project. This capacity will be offered beginning in the first bi-monthly period where available capacity slips below the minimum amount that each utility must offer.
  • The seller concentration limit of 10MW – meaning a seller could have no more than 10MW of FiT projects – was removed. 

Other requests for modification of the FiT were denied, including requests to increase the program’s total MW capacity and adopt a price floor, below which the FiT price could not be adjusted. 

Changes to the Standard Contract

While most stakeholder and utility requests for modification of the joint standard contract were rejected, the Commission directed the utilities to change the following items in the standard contract:

 

  • The contract will expressly state that projects have the option, at their discretion, to convert to full capacity deliverability status. 
  • Utility consent will be required only for material modifications to a facility, such as a change in project capacity or the type of technology used for generation. 
  • Instead of requiring the generator to show proof of insurance at the time of contract execution, evidence of insurance must be presented 60 days after a contract is signed, or before construction begins.  
  • All projects must provide development security of $20/kW, lowering the required collateral for projects of more than 1 MW from $50/kW to $20/kW.
  • Sellers are given the option to be responsible for forecasts, or pay the utility a fee for forecasting service.

The Commission declined requests for a longer timeframe for projects to reach commercial operation, to cap damages available to the utility for failure to meet the commercial operation date (COD), to allow projects to change their contract quantity more than once over the term of the contract, for a 25-year contract option, to eliminate collateral requirements after COD, a higher cost cap on permissible network upgrades, and to allow for seller’s assignment of a contract without the utility’s prior consent.

Changes to the Tariff

The Commission found that most stakeholder concerns related to the FiT tariff were resolved by the utilities’ latest revised tariff language, and further revisions were unnecessary. However, the Commission did clarify that restrictions on participation in both the FiT and a net-energy metering program, the California Solar Initiative, or the Small Generator Incentive Program are applicable to each generator, rather than the owners of generators. 

No further changes were made in response to requests related to:

 

  • requisite developer experience on projects of a similar size
  • the cure period for deficient Program Participation Requests
  • the utilities' process to confirm that a project meets the requirements of a FiT eligible electric generation facility
  • removal of the requirement to execute a non-disclosure agreement as part of establishing eligibility
  • whether an interconnection restudy would result in a project losing its place in the queue to participate in the FiT program
  • the procedure for acceptance of price and execution of the standard contract by an applicant
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