[California Energy Commission Letterhead]


STATE OF CALIFORNIA ENERGY RESOURCES
CONSERVATION AND DEVELOPMENT COMMISSION 

In the Matter of:                               ) 	Docket No. 99-DIST-GEN-(2)
                                                )
Exploring Revisions to Current Interconnection  )
Rules Between Investor-owned and                )
Publicly-owned Utility Distribution Companies   )
And Distributed Generators                      )
                                                )
Evaluating CEQA Procedures for Siting           )
Distributed Generation Facilities               )	January 16, 2002

NOTICE OF SITING COMMITTEE WORKSHOP
TO DEVELOP A STRATEGIC PLAN
FOR DISTRIBUTED GENERATION

Workshop Agenda now available on Notices page

Tuesday, February 5, 2002
Beginning at 9:30 a.m.

California Energy Commission
1516 Ninth Street
Hearing Room A
Sacramento, California
(wheelchair accessible)

Audio from this workshop will be broadcast over the Internet.
Please see our RealAudio page for details of how to listen.


In late 1998, the California Energy Commission (Energy Commission) and the California Public Utilities Commission (CPUC) began a collaborative effort to address issues related to the distributed generation industry. As part of that effort, standardized interconnection rules have been adopted, incentive programs for self-generation have been initiated, net metering programs have been expanded, policies surrounding standby rates have been established, and opportunities to assist local governments in streamlining permitting requirements have been identified.

In a related matter, the California Air Resources Board (CARB) recently adopted emissions standards and certification requirements applicable to distributed generation equipment, effective January 1, 2003. It should be noted that other State agencies and organizations are also conducting or planning distribution generation programs, including the California Power Authority and the California Independent System Operator.

Many of these efforts are consistent with a fundamental policy message articulated in Senate Bill 1298, signed into law by Governor Davis in mid-2000:

"Distributed generation can contribute to helping California meet the energy requirements of its citizens and businesses...It is in the public interest to encourage the deployment of distributed generation that has a positive impact on air quality." (Chapter 741, Statutes of 2000)

If the State of California is to "encourage the deployment of distributed generation," a coordinated path for this activity should be developed. Energy Commission development of a Strategic Plan for distributed generation would serve as a guidance document for this coordination as well as chart a clear path for the Energy Commission's own distributed generation activities. The foundation for this proposed Strategic Plan will be a set of federal and State policies related to distributed generation. Some policies have already been established, but others may require further examination in light of the experience gained from the recent energy crisis. In addition, some policy gaps are still apparent. Examples of existing policy gaps include but are not limited to the following:

To begin the strategic planning process, the Energy Commission's Energy Facility Siting Committee (Commissioner Robert Laurie, Presiding Member, and Commissioner Robert Pernell, Associate Member) will hold an initial workshop to receive input regarding the desired content of an Energy Commission Strategic Plan for distributed generation. The results of this effort will be used to develop a draft Strategic Plan, containing the Energy Commission's proposed vision, mission, goals and initiatives for distributed generation. The draft plan will eventually be presented to the full Commission for approval and offered to State and local agencies as guidance for their own distributed generation activities.

The workshop agenda is not attached to this notice, but it will be posted no later than February 1st on the Energy Commission Web Site at www.energy.ca.gov/distgen. At this point, we expect the workshop to address the major issues the Energy Commission will need to consider as it develops its Strategic Plan, including a review of distributed generation activities currently being undertaken by other state agencies. As such, the Siting Committee welcomes the participation of representatives of State and local government, utilities, non-profit organizations, consumer groups and the distributed generation industry to provide information on their distributed generation activities or investment plans.

To identify specific issues that should be addressed during this workshop and help finalize the agenda, the Siting Committee requests that parties submit comments responding to the attached list of questions by 5:00 p.m. on January 28, 2002. Electronic comments sent to stomashe@energy.state.ca.us will be accepted in lieu of written comments by the filing deadline. An original and six sets of written comments should be addressed to the following:

California Energy Commission
Docket Unit
1516 Ninth Street, MS-4
Sacramento, CA 95814
Docket Number: 99-DIST-GEN-(2)

Following the workshop, the Siting Committee will consider recommendations for Energy Commission action. If you have questions regarding this notice, please contact Scott Tomashefsky by telephone at (916) 654-4896 or electronically at stomashe@energy.state.ca.us.

If you want information about or assistance in participating in this or other Energy Commission proceedings, please call Roberta Mendonca, the Commission's Public Adviser, at (916) 654-4489, toll-free in California at (800) 822-6228, or at pao@energy.state.ca.us. If you require special accommodation at the workshop, please call Betty LaFranchi at (916) 654-5204 at least five days before the workshop. News media inquiries should be directed to Assistant Director Claudia Chandler at (916) 654-4989 or at energia@energy.ca.gov.

Dated: January 16, 2002 STATE OF CALIFORNIA
ENERGY RESOURCES CONSERVATION AND DEVELOPMENT COMMISSION
_______________________________
ROBERT A. LAURIE, Commissioner
Presiding Member
Siting Committee		 _______________________________
ROBERT PERNELL, Commissioner
Associate Member Energy Facility
Energy Facility Siting Committee

QUESTIONS FOR THE SITING COMMITTEE WORKSHOP ON DEVELOPING A STRATEGIC PLAN FOR DISTRIBUTED GENERATION

  1. Scope of the Energy Commission Strategic Planning Effort
    1. What should be the purpose of this Strategic Plan? Possible purpose statements include the following:
      • To promote distributed generation. If so, to whom?
      • To coordinate distributed generation activities among State agencies and organizations.
      • To promote ways for distributed generation to be deployed that have a positive impact on air quality
      • To promote the development and application of clean, efficiency, reliable and affordable distributed generation technologies.
      • To define the preferred role of distributed generation in California.
      • To declare where distributed generation should be sited as an alternative to new transmission lines or where utilities or developers are precluded from building transmission lines or central station generation.
    2. What technologies should be included within the scope of the Strategic Plan?

  2. Vision, Mission, and Goals of an Energy Commission Strategic Plan
    1. What should be the Energy Commission's vision or "desired future state" for distributed generation? Possible vision statements may include but are be limited to the following:
      • DG will become a viable substitute for central station power plants and high-voltage transmission lines.
      • Some level of on-site generation will be installed in all buildings, or alternatively, in all new buildings.
      • Microgrids will play an important role in meeting the needs of electricity consumers.
      • Using a combination of distributed generation, energy efficiency measures, and net metering, buildings will produce as much electricity as they use (so called "zero-net" electricity buildings).
      • Energy users will be able to meet their energy needs by choosing among a range of distributed generation alternatives and grid power.
      • Distributed generation will become an integral component of a highly reliable, efficient, secure, economic and clean energy supply system.
    2. Are the missions, goals, and objectives outlined by the U.S. Department of Energy (DOE) in its Distributed Energy Resources (DER) Strategic Plan consistent with the State's efforts to deploy distributed generation ? (See Appendix A for more information.)
    3. Comment on the suitability for California of the DOE's goal to achieve 20 percent of new electricity capacity additions from distributed generation.

  3. Barriers to Deployment of Distributed Generation
    1. Please comment on the major regulatory, institutional, market, or business development barriers currently impacting distributed generation deployment.
    2. Characterize the issue or barrier into a concise problem statement. What activities are underway or should be initiated to mitigate the barrier? Who has the primary authority to address the identified barrier?
    3. What is preventing distributed generation from being installed at sites which support State energy policy objectives, including to improve the reliability and security of the California's energy supplies and to improve electric-generation fuel efficiency and diversity?

  4. Policies to Develop for the Strategic Plan
    1. What policy issues should the Energy Commission consider in developing its Strategic Plan?
    2. Are there important policy decisions or gaps that should be considered or reconsidered in light of the range of energy crisis activities conducted during the past two years?
    3. Should the microgrid concept be endorsed as a matter of public policy? What steps must be taken to increase the development of microgrids in California? What impact will this endorsement have on utility operations (grid management, etc.).
    4. Would changing the definition of a public utility help distributed generation deployment in the state? If so, what process would be needed to modify the term?
    5. Should the Building Energy Efficiency Standards (Title 24) be modified to encourage distributed generation installations in new construction and major remodels?

  5. State Agency and Organization Involvement in Distributed Generation
    1. Which State agencies and organizations are actively involved or considering undertaking some level of distributed generation activity?
    2. What is the primary focus of those activities?
    3. What future activities are being planned with respect to distributed generation?
    4. Is there a need to coordinate distributed generation activities across state agencies? If so, describe how this coordination effort should be accomplished.

  6. Specific Distributed Generation Activities by the Energy Commission
    1. What new initiatives could be conducted by the Energy Commission to better integrate distributed generation with the following activities:
      • Research, Development and Demonstration Programs
      • Renewables Program
      • Title 24 Building Energy Efficiency Standards
      • Energy Efficiency and Demand-Responsiveness Programs
      • Power Plant Licensing Process
      • Web Sites
      • Outreach to target audiences

  7. Procedural Issues
    1. What is the best approach to develop a strategic plan in this proceeding?
    2. Should working groups be formed? If so, how many and how should the work be divided among several working groups?
    3. If a working group process cannot provide consensus in the time available, what formal procedures should the Siting Committee employ to provide an opportunity for consideration? Appendix A. Department of Energy Vision, Mission, and Goals

    In September 2000, the U.S. Department of Energy released its Strategic Plan for Distributed Energy Resources, outlining the principal objectives of the federal government through the year 2020. The report recommends the following:

    Vision -- The United States will have the cleanest, most efficient and reliable energy system in the world by maximizing the use of affordable distributed energy resources.

    Mission -- To lead a national effort which does the following: 1) develops the "next" generation of clean, efficient, reliable, and affordable distributed energy technologies; 2) documents the energy, economic, and environmental benefits of the expanded use of distributed energy resources and disseminate the findings widely; and 3) implements deployment strategies, including national and international standards, that address infrastructure, energy delivery, institutional, and regulatory needs.

    Goals -- Long term (Year 2020): Make the nation's energy generation and delivery system the cleanest, most efficient, reliable, and affordable in the world by maximizing the use of cost-efficient distributed energy resources.

    Mid-term (Year 2010): Reduce distributed generation equipment costs and emissions and increase the efficiency and reliability of a suite of distributed energy technologies to achieve 20 percent of new electric capacity additions in the U.S.

    Near-term (Year 2005): Develop "next generation" distributed generation technologies and address the institutional and regulatory barriers that interfere with siting, permitting, and interconnecting distributed energy resources coming on line prior to 2005.

    These objectives are consistent with many of the activities presently being undertaken in California. For example, much of the research, development and demonstration projects currently being funded under the Energy Commission's Public Interest Energy Research (PIER) program are designed to increase the efficiency of generating facilities concurrently with reducing emissions on a per megawatt output basis. The Energy Commission and CPUC efforts towards the standardization of interconnection rules in California, as well as coordinated outreach to publicly owned utilities outside CPUC jurisdiction has sought to remove a major regulatory barrier to entry: the lack of standardized interconnection rules. The long-term goals outlined by DOE are also consistent with the Energy Commission's established policy to meet the state's growing demand for energy with a portfolio of traditional central station power generation and alternative generation technologies.

    As such, the Committee is considering adopting, with minor modification, the basic provisions outlined by DOE.



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