California Approves Feed-In Tariffs,
Rewards Energy Efficiency
Feb 6, 2008 - EERE Network News
he California Public Utility Commission (CPUC) has
approved long-term prices for the state's utilities
to buy renewable energy from their customers. For
seven of the state's utilities, the so-called "feed-in
tariff," approved on January 31, applies to renewable
energy systems located at public water and wastewater
facilities, but for Pacific Gas and Electric Company
(PG&E) and Southern California Edison (SCE), a separate
feed-in tariff applies to any customer-located renewable
energy system up to 1.5 megawatts in capacity. The
tariff requires signing a long-term contract for 5,
10, or 15 years, but the price is adjusted based on
the time of day of the power generation. For instance,
for a system producing power throughout the day, a
15-year contract signed with SCE in 2008 would earn
about 15 cents per kilowatt-hour on a summer weekday,
while a system generating power from 8 a.m. to 6 p.m.
(such as a solar power system), would earn about 22
cents per kilowatt-hour under the same circumstances.
Overall, the tariffs range from 8 to 31 cents per
kilowatt-hour. Facilities earning the tariff cannot
be participating in other state incentive programs.
Feed-in tariffs have been used in other countries,
such as Germany, to encourage a rapid growth in customer-located
renewable energy systems, but the CPUC has set limits
on the current tariffs. For systems at public water
and wastewater facilities, the statewide capacity
limit is set at 250 megawatts and is distributed among
the seven utilities according to their size. For other
customer-located facilities, the capacity limit is
about 104.6 megawatts for PG&E and for SCE, about
123.8 megawatts. PG&E, SCE, and some of the other
utilities offer their tariffs through two options:
the customer can sell the utility only their excess
power, or they can arrange to sell all the power from
their facility to the utility. The new tariffs are
effective immediately.
The CPUC also made a change to a program that provides
financial rewards to utilities based on the performance
of their energy efficiency programs. The program had
allowed interim rewards to the utilities, but included
a provision that could force a utility to repay the
rewards if a review found that the program had fallen
short. That provision was discouraging utilities from
taking advantage of the program. To address the problem,
the CPUC removed the payback provision but also lowered
the size of the interim rewards.
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