UCAN's experts submitted testimony in A. 08-07-017 describing SDG&E's self-acclaimed Solar Energy Project as overly expensive, relying upon antiquated technology and so poorly conceived and researched that it is rendered literally meaningless.   UCAN presented the expert testimony of two experts.   David Croyle is a recently retired SDG&E financial analyst who came out of retirement to scrutinize the SDG&E proposal.   Bill Powers, of Powers Engineering, also presented testimony building upon research that he began with his highly regarded San Diego Energy Future 2020 and his submissions in the Sunrise Powerlink case.

In the expert testimony submitted in January 2009,  UCAN identifies the critical deficiencies in SDG&E’s SEP application and makes essential modifications to eliminate the deficiencies.  UCAN’s recommendations are intended to ensure the best use of program funds for the most cost-effective PV systems and the most cost effective means for financing the PV investments.  These changes should lead a more beneficial program for the ratepayers.  In these unusually challenging economic times, it is especially important to do the right things in the right way and at the right time.

UCAN experts show that there may be other potentially less expensive ways to finance the PV projects besides rate base investments.  SDG&E has not assessed those alternatives either.  In fact, SDG&E has limited its focus to a single technology financed as turnkey projects without providing evidence to support those choices over other alternatives. Furthermore, SDG&E has not developed criteria for selecting vendors nor proposed any methodology for evaluating competing bids.  UCAN believes in order to make Tier 3 Advice Letters easier for the Commission to review and approve, pre-established criteria, methodologies and performance measures must be established in this proceeding and used later to support Tier 3 Advice Letter reviews.

In addition, many costs have neither been estimated in the application nor “capped” as were overall funding levels and program development and administration costs.  Therefore UCAN recommends that review criteria be provided by SDG&E to ensure that the uncapped costs are managed to prevent adverse impacts on the ratepayers.  For example, site-specific construction costs and negotiated lease payments remain unknown costs to ratepayers with no pre-established criteria for managing those costs.  To support the application and Advice Letter process, therefore, several issues need to be addressed in this proceeding.  In this testimony we identify deficiencies and where possible recommend remedies, all that suggest more should be required from SDG&E prior to a Commission decision on the application and to facilitate Advice Letter review.

UCAN concludes that SDG&E’s application does not provide a sufficient justification for an expenditure of up to $250 million to obtain up to 52 MW (dc) of renewable power in the load basin.    Although UCAN commends SDG&E for seeking PV opportunities within the basin, the application places far too much burden upon the Tier 3 Advice Letter process.  The Scoping Memo asks all the right questions and infers that the SDG&E application should include standards for review in both the application itself and individual projects to be approved in Advice Letters.

Subsequent to the UCAN filing,  on April 20th, UCAN and SDG&E struck a compromise that halved the size of the application and put a number of safeguards outlined by UCAN into place.   A settlement proposal has been submitted to the Commission (see below) and is awaiting a final decision.