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Small-scale renewable project developers claim that a joint utility proposed standard contract is overwhelming. Utilities counter that their dense contract aims to protect their distribution system. The joint contract for projects sized up to 3 MW aims to protect utility ratepayers from contract risks and misinterpretations, utility representatives said at a Feb. 22 California Public Utilities Commission workshop. Renewable generators complained that the 89-page agreement--which excludes pricing and interconnection terms considered the crux of the deal--is onerous and overly complex. “Do you want to meet the governor’s goal of 12,000 MW of [renewable] distributed generation or not,” Jody London, a consultant for the Local Government Sustainable Energy Coalition, asked representatives of Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric. . Under state law, investor-owned utilities are to offer small solar and wind generators the same contract to reach up to 500 MW in the three service territories. The feed-in tariff law requires Edison to sign up 250 MW, PG&E 210 MW, and San Diego Gas & Electric 40 MW. Edison already has 74 MW of signed agreements under the exiting feed-in tariff for projects up to 1.5 MW. PG&E has 106 MW of signed deals, said Carlos Abreu, PG&E renewable transaction principal. Public utilities are required to sign an additional 200 MW of projects with capacities up to 3 MW, but are not regulated by the CPUC. The California Solar Energy Alliance is striving to exclude from the contract solar projects that are 1 MW and smaller. Mignon Marks, CalSEA executive director, said requiring projects under 1 MW to sign the pending utility agreement “would basically cut us off.” Utilities counter that they want to ensure their distribution systems are not thrown off by excess solar power from rooftop systems and that they get any payments due to them for balancing the flow of power into the grid. Two key issues that remained off the workshop table were pricing and interconnection. They are being dealt with on separate tracks at the CPUC. Questions on these topics, which are considered policy matters, were strongly discouraged. Regulators are trying to finalize a settlement on interconnection agreements to allow renewable projects to hook into the grid. The utility agreement discussed this week thus is “agnostic” on interconnection, said CPUC administrative judge Regina DeAngelis. Also at issue is not only whether, but to what extent the contract undergoing revisions will interfere or clear the way for up to 500 MW of new deals. Generators want clarity and reliability on the interconnection end, including knowing who--the utility or the California Independent System Operator--determines the interconnection. They also want to be paid for all the power they produce under the terms of the utility agreement. The line between distribution and transmission is vague. Under the proposed deal, generators will only be compensated for power that does not exceed 110 percent of the project capacity within an hour, or 120 percent over the year. William Walsh, Edison manager of renewable contract development, said the utilities are trying to discourage generators from over-installing, noting that it was a bone of contention for contracts the utility signed with qualifying facilities in the 1980s. The power purchase agreement at issue attempts to nail down an agreement on 23 different contract provisions, including damages, green attributes (and who owns them), force majeure, and warranties. Other issues to be determined at a later date include: -How much capacity the renewable developer is responsible for producing at the project’s launch; -How to handle solar energy refunds given to the generator by other state programs, including the CPUC’s Self Generation Incentive Program; and -What the price will be for project capacity that helps satisfy a utility’s resource adequacy requirement. The resource adequacy rule requires utilities to have a 15-17 percent supply cushion. According to Jaclyn Marks, with the CPUC’s renewable procurement division, the commission expects to have reached an agreement on the contract provisions by the end of this quarter.

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