Key Barriers to Distributed Generation

Excessive and Unnecessary Utility Stand-by Charges
Solution: The executive orders issued by the Governor on February 14th took=
a=20
step in the right direction. Utility stand-by charges have always been=20
designed by the utilities to protect their monopoly position, extract=20
monopoly prices from customers, or both. But there is no reason to limit t=
he=20
elimination of these charges to generation facilities that are less than=20
1MW. These limits will only lengthen unnecessarily the time it takes for=
=20
California to close the significant gap between supply and demand and reduc=
e=20
the risk of black outs. We would propose lifting the cap through amendment=
s=20
to SB27X, which is designed to facilitate development of distributed=20
generation.
=20
Excessive delays and costs related to interconnecting facilities with=20
investor-owned and municipal utilities
Solution: The Governor=01,s executive order regarding interconnection is =
a=20
step in the right direction=01*D-D-26-01 requires utilities to complete=20
interconnection studies within 7 days.) However, the financial conflicts t=
he=20
utilities face in interconnecting facilities are simply too powerful to=20
overcome through executive orders or other regulations. The only effective=
,=20
sustainable solution is to shift all control over interconnection away from=
=20
the utility and place that control with the California ISO. This could be=
=20
accomplished through amendments to SB 27X.

Permitting and Air Quality Issues
Developers of distributed (i.e., =01&on-site=018) generation that is 50 MWs=
or=20
greater must receive certification from the California Energy Commission an=
d=20
therefore faces all of the impediments to development that large-scale=20
generation faces. =20

Solution: California should ensure that the executive orders (D-22-01 thru=
=20
D-26-01) issued by the Governor to expedite plant siting and maximize plant=
=20
output apply equally to smaller scale, =01&distributed generation=018 facil=
ities.=20
In addition, distributed generation that is less than 50 MWs continues to=
=20
face local opposition. The State should ensure that local, parochial=20
interests cannot block otherwise beneficial distributed generation projects=
. =20
These could be accomplished through amendments to SB27X.