No Impact Yet on Net Energy Metering Customers as FERC QFs

The California Public Utilities Commission (CPUC) is adopting the projected 2010 power generation and purchasing cost for San Diego Gas and Electric Company (SDG&E) at $827.956 million under SDG&E's Energy Resource Recovery Account. SDG&E's approved Transition Cost Balancing Account was pegged at $46.908 million.

SDG&E recovers from consumers the cost of power generation and purchasing from outside suppliers through the annually projected resource recovery account. The cost balancing account is used in part to recover payments to Federal Energy Regulatory Commission Qualified Facilities (QFs) that are over a standard rate for electricity purchased by the Sempra Energy-owned public utility.

QF status is an important gateway for SDG&E Net Energy Metering customers who expect to be paid for excess customer-generated solar energy that is taken by SDG&E through the power grid. SDG&E submitted an application on March 15 to establish a compensation process for those NEM customers putting power into the grid over a 12-month period. The NEM application is not expected to be approved until December 2010, and NEM-eligible customers must receive FERC QF status before SDG&E will pay for excess electricity generated by those customers.

Currently, any SDG&E customers who put more power into the grid than they use get nothing for that power, setting up a liability for SDG&E due to seizure of that electricity without due process, under color of authority through the exclusive City of San Diego electricity franchise. AB 920 regarding customer power generation compensation, passed last year, is currently in effect, but CPUC has no procedures yet in place to compensate customers for power lost to the grid under SDG&E operations.

CPUC's Division of Ratepayer Advocates initially protested the SDG&E projected power costs because of the apparent lack of clear explanations for the projection but dropped its opposition on receiving later clarification from SDG&E. SDG&E is required to file a Tier-1 advice letter later this month for implementing the cost recovery requirement.

The order adopting SDG&E cost projections was approved by Michael Peevy, Dian Gruenrich, John Bohn, Timothy Alan Simpson, and Nancy Ryan of CPUC.


DECISION ADOPTING SAN DIEGO GAS & ELECTRIC COMPANY’S 2010 ENERGY RESOURCE RECOVERY ACCOUNT REVENUE REQUIREMENT FORECAST AND REVIEWING ITS POWER PROCUREMENT BALANCING ACCOUNT (http://docs.cpuc.ca.gov/WORD_PDF/FINAL_DECISION/116120.pdf)

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