CPUC Faces EPIC Struggle

By Published On: May 11, 2012

After voting down Pacific Gas & Electric’s request to invest ratepayer money in a manufacturing facility to advance solar technologies, regulators are separately proposing ground rules for a new $162 million/year program to replace the California Energy Commission Public Interest Energy Research program. The new program at the California Public Utilities Commission is known as the Electric Program Investment Charge (EPIC). California ratepayers already have been paying for the new research and development effort despite the lack of program details until now. They began paying money this year after the old public goods charge that funded the Energy Commission program expired at the end of 2011. The Legislature let the Energy Commission program lapse after utilities and others criticized it over lack of tangible results. The CPUC’s proposed EPIC decision--likely to come before regulators for approval as soon as later this month--aims to give the clean energy funding program form. It spells out specific program details and goals beyond those in Gov. Jerry Brown’s general directive to keep some sort of state energy research program going after lawmakers adjourned last fall without renewing the Energy Commission program. Ideally, according to Sarah Thomas, Division of Ratepayer Advocates attorney, EPIC should spur open competition for research and development projects among companies. That should eliminate the need for so-called “one off” decisions, she said, like the one that faced the CPUC on PG&E’s solar manufacturing facility investment. At its May 10 meeting, the commission voted down the utility’s plan to invest $9.9 million of ratepayer money in SVTC Solar. Environmentalists generally back EPIC, citing the need for government subsidies for emerging clean technologies. Many consumer and energy user groups are wary of EPIC, saying the charge just raises the price of electricity. They claim it will contribute little that won’t be accomplished anyway under separate government programs and standards, like the 33 percent renewables portfolio standard. Consumer Federation of California attorney Nicole Blake, for instance, wants a tighter budget for EPIC. She argues that some of the growing pile of money being collected for the program could be returned to ratepayers, pending an evaluation of research and development needs. Under the proposed EPIC program, the Energy Commission would administer 80 percent of the funds. The state’s three investor-owned electric utilities would decide how to commit the other 20 percent of the money, subject to plans reviewed and approved by the CPUC once every three years. Collections from ratepayers to fund EPIC periodically would be adjusted for inflation. The proposed decision by CPUC administrative law judge Julie Fitch would require the Energy Commission and utilities to use “ratepayer benefits as a mandatory guiding principle” in awarding research and development contracts. Administrative expenses under EPIC would be capped at 10 percent and the program would be reviewed by an independent evaluator for effectiveness in 2016. Research and development conducted under the program is to focus on “clean energy technologies and approaches, including both the supply side and the demand side of electricity use.” That focus is narrower than the Energy Commission’s Public Interest Energy Research (PIER) program, which was aimed at “advancing science and technology in the fields of energy efficiency, renewable energy, advanced electricity technologies, energy-related environmental protection, and transmission and distribution, and transportation technologies.” Under PIER, the Energy Commission funded a broad range of research, including scientific inquiries into the nature of environmental pollution from energy use, such as the effects of global warming. The Energy Commission also focused heavily on projects aimed at advancing clean fuels for vehicles. EPIC is set to focus solely on applied electricity technology research and development.

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