CALIFORNIA LEGISLATURE

STATE CAPITOL
'5 ACRAMENTO CAI 
95814

August 4, 2015

Michael Picker, President
Public Utilities Commission
505 Van Ness Avenue

San Francisco, CA 94102

RE: Proposed Decision Revising The Greenhouse Gas Emission Factor to Determine
Eligibility to Participate in the Self?Generation Incentive Program

President Picker:

As you know, we are working with Governor Brown and our colleagues in the Legislature to
establish long-term targets and measures to reduce greenhouse gas emissions, including speci?c
measures to increase renewable energy and reduce emissions from the electricity and natural gas
sectors. As a primary regulator of the electricity and natural gas sectors, the Public Utilities
Commission plays an integral role in this effort, and the Commission's commitment to use its
authority to achieve greenhouse gas emission reductions is essential to address climate change.

Last year, the Legislature reauthorized the Self-Generation Incentive Program (SGIP) until 2021,
which represents a commitment of an additional $415 million in ratepayer funds to support the
installation of new distributed energy resources which are expected to be in operation through
2030 and beyond.

Prior to including the reauthorization of SGIP in SB 861, the Legislature held multiple hearings
and reviewed the performance of the program. Among other things, we found that the program
was delivering minimal greenhouse gas emission benefits at extremely high costs, representing a
poor value for ratepayers and not meeting the intent of prior SGIP reauthorization legislation.
One of the reasons for the program's lackluster performance has been a greenhouse gas emission
factor based on irrelevant and outdated emissions data and assumptions.

For these reasons, SB 861 included a series of SGIP "reforms," including requiring the
Commission to update the greenhouse gas emission factor ?based on the most recent data
available to the State Air Resources Board for greenhouse gas emissions from electricity sales in
the self-generation incentive program administrators? service areas as well as current estimates of
greenhouse gas emissions over the useful life of the distributed energy resource, including
consideration of the effects of the California Renewables Portfolio Standard.?

Michael Picker
August 4, 2015

In light of all this, we are deeply disappointed with your proposed decision, which meets neither
the letter nor the spirit of the statute. Rather than updating SGIP with an toward achieving
direct GHG emission reductions from the $415 million investment, as well as supporting
innovations that will produce additional reductions and other public bene?ts, the decision
requires a paltry ?ve percent reduction in GHG emissions compared to the existing standard
which is outdated and ineffective. In fact, the decision appears to be skewed to maintain
eligibility for existing technologies operating on 100 percent conventional natural gas. We don't
think this is consistent with the state's long term climate and energy goals.

We also note that existing natural gas technologies could meet a more stringent standard and
produce signi?cant greenhouse gas emission reductions, even with no improvements in
ef?ciency, if they were required to use renewable directed biogas from in?state sources.

Not only does the result not meet the Legislature?s intent, your process has apparently
disregarded the plain requirements of the statute. Based on a review of the record, as well as
reports of Commission and ARB staff, the Commission has not meaningfully consulted with
ARB, has not requested the most recent data available to ARB, even though ARB has con?rmed
its availability, and has not adjusted the standard according to emissions in each SGIP
administrator's service area.

If your decision is adopted, SGIP will continue the increasingly absurd practice of subsidizing
natural gas consumption, supporting existing technologies that have already taken hundreds of
millions of dollars from SGIP and other public subsidies without producing substantial ef?ciency
improvements, cost reductions, or general bene?ts to ratepayers, squanderng the $415 million
ratepayer investment authorized by SB 861 and undermining our collective efforts to clean the
grid and transition away from fossil fuels.

Let's do better for our ratepayers and our climate. We urge you reconsider your proposed
decision and lead the Commission to adopt a stronger standard.

Sincerel .

      

Das Williams Anthony Rendon
Chair, Natural Resources Committee Chair, Utilities and Commerce Committee

Richard Bloom
Chair, Budget Subcommittee on Resources
And Transportation

Cc: Commissioners
Sadler, Director, Office ofGovernmentai Affairs